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Viant Technology Announces Fourth Quarter and Full Year 2022 Financial Results

IRVINE, Calif., March 02, 2023--(BUSINESS WIRE)--Viant Technology Inc. (Nasdaq: DSP), a leading people-based advertising technology company, today reported financial results for its fourth quarter and full year ended December 31, 2022.

"We closed out 2022 with results within our guidance or better, as customers are shifting more of their budgets to our omnichannel, people-based advertising platform," said Tim Vanderhook, Co-Founder and CEO, Viant. "While the macroeconomic environment over the last year has continued to put pressure on advertising budgets, we have focused on investing in our technology and platform to help our customers drive higher returns from the ad dollars they spend. Notably we believe our investments in AI and our CTV infrastructure make us well positioned to capitalize on the industry tailwinds for programmatic advertising across digital channels in the years ahead."

Fourth quarter 2022 Financial Highlights, year-over-year:

GAAP

  • Revenue was $54.5 million, a decrease of 34%

  • Gross profit was $22.5 million, a decrease of 41%

  • Net loss was $8.0 million, compared to net income of $7.5 million in the fourth quarter of 2021

  • Net loss attributable to Viant Technology Inc. was $2.2 million, or $(0.15) per diluted share of Class A common stock, compared to net income attributable to Viant Technology Inc. of $1.6 million, or $0.11 per diluted share of Class A common stock, in the fourth quarter of 2021

  • Cash and cash equivalents as of December 31, 2022 was $206.6 million, with no outstanding debt

Non-GAAP(1)

  • Contribution ex-TAC was $33.4 million, a decrease of 31%

  • Adjusted EBITDA was $2.6 million, compared to $17.4 million in the fourth quarter of 2021

  • Non-GAAP net income was $0.4 million, compared to non-GAAP net income of $13.4 million in the fourth quarter of 2021

  • Non-GAAP net income attributable to Viant Technology Inc. was $0.0 million, or $0.00 per diluted share of Class A common stock, compared to non-GAAP net income attributable to Viant Technology Inc. of $2.4 million, or $0.17 per diluted share of Class A common stock, in the fourth quarter of 2021

Full year 2022 Financial Highlights, year-over-year:

GAAP

  • Revenue was $197.2 million, a decrease of 12%

  • Gross profit was $80.4 million, a decrease of 15%

  • Net loss was $48.1 million, compared to a net loss of $37.6 million in 2021

  • Net loss attributable to Viant Technology Inc. was $11.9 million, or $(0.84) per diluted share of Class A common stock, compared to net loss attributable to Viant Technology Inc. of $7.7 million, or $(0.63) per diluted share of Class A common stock, in 2021

Non-GAAP(1)

  • Contribution ex-TAC was $124.7 million, a decrease of 12%

  • Adjusted EBITDA was $(6.1) million, compared to $37.1 million in 2021

  • Non-GAAP net loss was $15.8 million, compared to non-GAAP net income of $23.9 million in 2021

  • Non-GAAP net loss attributable to Viant Technology Inc. was $2.4 million, or $(0.17) per diluted share of Class A common stock, compared to non-GAAP net income attributable to Viant Technology Inc. of $4.0 million, or $0.30 per diluted share of Class A common stock, in 2021

Business Highlights:

  • Advertiser spend across the Adelphic platform(2) grew 15% in 2022 compared to 2021. For the fourth quarter, advertiser spend increased 9% compared to the third quarter and decreased 13% year-over-year.

  • Active customers(3) grew to 326 as of December 31, 2022, representing a year-over-year increase of 17, or 6%.

  • Viant was named to G2’s 2023 Best Software Awards on the Marketing & Advertising list and named a Leader in G2’s Enterprise Grid® Report for Cross-Channel Advertising.

  • Viant reinforced its commitment to sustainability joining Ad Net Zero as a Founding Member and launching Adtricity, a carbon impact reduction program to assist our customers in meeting their sustainability goals.

"We were pleased with our team’s ability to execute in the fourth quarter, despite ongoing challenges across the advertising industry. Our results for revenue and advertiser spend growth were consistent with our expectations, while our disciplined cost management initiatives helped drive adjusted EBITDA profitability in the quarter, ahead of expectations," said Larry Madden, CFO, Viant. "As we look ahead, we plan to continue our thoughtful cost management while balancing investments for growth."

Guidance:

For the first quarter 2023, the Company expects:

  • Revenue in the range of $39.0 million to $42.0 million

  • Contribution ex-TAC in the range of $25.5 million to $27.5 million

  • Non-GAAP operating expenses of approximately $30.0 million

  • Adjusted EBITDA in the range of $(4.5) million to $(2.5) million

Contribution ex-TAC, adjusted EBITDA, adjusted EBITDA as a percentage of contribution ex-TAC, non-GAAP net income (loss), non-GAAP earnings (loss) per share of Class A common stock—basic and diluted and non-GAAP operating expenses are non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations of these non-GAAP financial measures to Viant’s financial results as determined in accordance with GAAP are included at the end of this press release under "Reconciliation of Non-GAAP Financial Measures." For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see "Non-GAAP Financial Measures" in this press release. We are not able to estimate gross profit or net income (loss) on a forward-looking basis or reconcile the guidance provided for contribution ex-TAC, non-GAAP operating expenses, and adjusted EBITDA to the closest corresponding GAAP financial measures on a forward-looking basis without unreasonable efforts due to the variability and complexity with respect to the charges excluded from these non-GAAP financial measures; in particular, the measures and effects of our stock-based compensation related to new equity grants that are directly impacted by unpredictable fluctuations in our share price, as well as the impact of future traffic acquisition costs and other platform operations expenses that we are unable to forecast in light of the current macroeconomic environment. We expect the variability of the above charges could have a significant and potentially unpredictable impact on our future GAAP financial results.

Conference Call and Webcast Details:

Viant will host a conference call and webcast to discuss its financial results on Thursday, March 2, 2023 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live webcast of the call can be accessed from Viant’s Investor Relations website. An archived version of the webcast will be available from the same website after the call.

About Viant

Viant® (NASDAQ: DSP) is a leading advertising technology company that enables marketers to plan, execute and measure omnichannel ad campaigns through a cloud-based platform. Viant’s self-service Demand Side Platform, Adelphic®, powers programmatic advertising across Connected TV, Linear TV, mobile, desktop, audio, gaming and digital out-of-home channels. In 2022, Viant was recognized as a Leader in the DSP category, earned Great Place to Work® certification and Co-Founders Tim and Chris Vanderhook were named EY Entrepreneurs of the Year. To learn more, please visit viantinc.com.

Presentation

Viant Technology LLC has been determined to be the predecessor for accounting purposes and, accordingly, the consolidated financial statements for periods prior to the IPO and the related organizational transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from January 1, 2021 through February 11, 2021 presented in this press release represent the historical operations of Viant Technology LLC. The amounts as of December 31, 2022 and for the period from February 12, 2021 reflect the consolidated operations of Viant Technology Inc.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as "guidance," "believe," "expect," "estimate," "project," "plan," "will," or words or phrases with similar meaning. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements contained in this press release relate to, among other things, Viant’s projected financial performance and operating results, including our guidance for revenue, contribution ex-TAC, non-GAAP operating expenses, and adjusted EBITDA, as well as statements regarding our positioning to capitalize on industry tailwinds and our plan to continue our thoughtful cost management while balancing investments for growth. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, the market for programmatic advertising developing slower or differently than Viant’s expectations, the demands and expectations of customers and the ability to attract and retain customers and other economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. We do not intend and undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. Investors are referred to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.

(1) For a discussion on how we define, use and calculate these non-GAAP financial measures and a reconciliation thereof to the most directly comparable GAAP financial measures, see "Non-GAAP Financial Measures" and the supplementary schedules under "Reconciliation of Non-GAAP Financial Measures" in this press release.

(2) We define advertiser spend across our platform as the total amount billed to our customers for activity on our platform, inclusive of advertising media, third-party data, other add-on features and our platform fee we charge clients. See "Operational Metrics" for a discussion of how we use this metric and why it is useful to investors.

(3) We define an active customer as a customer that had total aggregate contribution ex-TAC of at least $5,000 through our platform during the previous twelve months. See "Operational Metrics" for a discussion of how we use this metric and why it is useful to investors.

VIANT TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share data)

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Revenue

$

54,509

$

82,715

$

197,168

$

224,127

Operating expenses:(1)

Platform operations

32,051

44,578

116,725

129,604

Sales and marketing

15,966

15,173

63,957

65,042

Technology and development

5,704

4,851

21,294

25,372

General and administrative

9,994

10,428

44,452

46,904

Total operating expenses

63,715

75,030

246,428

266,922

Income (loss) from operations

(9,206

)

7,685

(49,260

)

(42,795

)

Interest expense (income), net

(1,199

)

162

(1,481

)

864

Other expense, net

1

7

310

60

Gain on extinguishment of debt

(6,110

)

Total other expense (income), net

(1,198

)

169

(1,171

)

(5,186

)

Net income (loss)

(8,008

)

7,516

(48,089

)

(37,609

)

Less: Net income (loss) attributable to noncontrolling interests

(5,815

)

5,962

(36,176

)

(29,867

)

Net income (loss) attributable to Viant Technology Inc.

$

(2,193

)

$

1,554

$

(11,913

)

$

(7,742

)

Earnings (loss) per share of Class A common stock:

Basic

$

(0.15

)

$

0.11

$

(0.84

)

$

(0.63

)

Diluted

$

(0.15

)

$

0.11

$

(0.84

)

$

(0.63

)

Weighted-average shares of Class A common stock outstanding:

Basic

14,504

13,543

14,185

12,364

Diluted

14,504

13,550

14,185

12,364

(1) Stock-based compensation and depreciation and amortization included in operating expenses are as follows:

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Stock-based compensation:

Platform operations

$

1,139

$

1,253

$

4,761

$

13,096

Sales and marketing

2,081

2,053

9,010

25,639

Technology and development

1,299

1,390

5,323

12,373

General and administrative

2,527

1,935

9,807

17,714

Total stock-based compensation

$

7,046

$

6,631

$

28,901

$

68,822

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Depreciation and amortization:

Platform operations

$

2,742

$

2,439

$

10,486

$

8,388

Sales and marketing

Technology and development

396

414

1,646

1,599

General and administrative

247

265

999

1,154

Total depreciation and amortization

$

3,385

$

3,118

$

13,131

$

11,141

VIANT TECHNOLOGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; in thousands, except share data)

As of December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

206,573

$

238,480

Accounts receivable, net of allowances

101,658

110,739

Prepaid expenses and other current assets

6,631

2,967

Total current assets

314,862

352,186

Property, equipment, and software, net

23,106

22,331

Operating lease assets

26,441

Intangible assets, net

667

1,786

Goodwill

12,422

12,422

Other assets

385

406

Total assets

$

377,883

$

389,131

Liabilities and stockholders' equity

Liabilities

Current liabilities:

Accounts payable

$

37,063

$

32,877

Accrued liabilities

35,063

34,086

Accrued compensation

9,162

12,247

Current portion of deferred revenue

123

1,317

Current portion of operating lease liabilities

3,711

Other current liabilities

1,995

2,531

Total current liabilities

87,117

83,058

Long-term debt

17,500

Long-term portion of deferred revenue

5,234

Long-term portion of operating lease liabilities

24,998

Other long-term liabilities

765

Total liabilities

112,115

106,557

Commitments and contingencies (Note 14)

Stockholders’ equity

Preferred stock, $0.001 par value

Authorized shares — 10,000,000

Issued and outstanding — none

Class A common stock, $0.001 par value

15

14

Authorized shares — 450,000,000

Issued — 14,783,886 and 13,920,868

Outstanding — 14,643,798 and 13,704,638

Class B common stock, $0.001 par value

47

47

Authorized shares — 150,000,000

Issued and outstanding — 47,082,260 and 47,107,130

Additional paid-in capital

95,922

82,888

Accumulated deficit

(36,261

)

(20,139

)

Treasury stock, at cost; 140,088 and 216,230 shares held

(475

)

(2,648

)

Total stockholders' equity attributable to Viant Technology Inc.

59,248

60,162

Noncontrolling interests

206,520

222,412

Total equity

265,768

282,574

Total liabilities and stockholders' equity

$

377,883

$

389,131

VIANT TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in thousands)

Year Ended December 31,

2022

2021

Cash flows provided by (used in) operating activities:

Net income (loss)

$

(48,089

)

$

(37,609

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

13,131

11,141

Stock/unit-based compensation

28,901

68,822

Provision for (recovery of) doubtful accounts

1,260

(107

)

Loss on disposal of assets

588

188

Gain on extinguishment of debt

(6,110

)

Amortization of operating lease assets

2,861

Changes in operating assets and liabilities:

Accounts receivable

7,821

(20,865

)

Prepaid expenses and other assets

(3,642

)

(750

)

Accounts payable

4,215

3,404

Accrued liabilities

860

9,728

Accrued compensation

(3,118

)

2,319

Deferred revenue

(6,428

)

(1,786

)

Operating lease liabilities

(1,561

)

Other liabilities

(329

)

290

Net cash provided by (used in) operating activities

(3,530

)

28,665

Cash flows used in investing activities:

Purchases of property and equipment

(758

)

(441

)

Capitalized software development costs

(8,068

)

(6,931

)

Net cash used in investing activities

(8,826

)

(7,372

)

Cash flows provided by (used in) financing activities:

Proceeds from Paycheck Protection Program Loan

Proceeds from issuance of common stock, net of underwriting discounts

232,500

Payment of member tax distributions

(15

)

(7,289

)

Payment of member dividends

Payment of offering costs

(2,608

)

Taxes paid related to net share settlement of equity awards

(2,036

)

(15,045

)

Repayment of revolving credit facility

(17,500

)

Net cash provided by (used in) financing activities

(19,551

)

207,558

Net increase (decrease) in cash and cash equivalents

(31,907

)

228,851

Cash and cash equivalents at beginning of period

238,480

9,629

Cash and cash equivalents at end of period

$

206,573

$

238,480

Non-GAAP Financial Measures

To provide investors and others with additional information regarding Viant’s results, we have included in this press release the following financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"): contribution ex-TAC, adjusted EBITDA, adjusted EBITDA as a percentage of contribution ex-TAC, non-GAAP net income (loss), non-GAAP earnings (loss) per share of Class A common stock—basic and diluted and non-GAAP operating expenses. The Company’s management believes that this information can assist investors in evaluating the Company’s operational trends, financial performance, and cash generating capacity. Management believes these non-GAAP financial measures allow investors to evaluate the Company’s financial performance using some of the same measures as management.

Contribution ex-TAC is a non-GAAP financial measure. Gross profit is the most comparable GAAP financial measure, which is calculated as revenue less platform operations expense. In calculating contribution ex-TAC, we add back other platform operations expense to gross profit. Contribution ex-TAC is a key profitability measure used by our management and board of directors to understand and evaluate our operating performance and trends, develop short- and long-term operational plans and make strategic decisions regarding the allocation of capital. "Traffic acquisition costs" or "TAC" refers to amounts incurred and payable to suppliers for the cost of advertising media, third-party data and other add-on features related to our fixed CPM pricing option and certain arrangements related to our percentage of spend pricing option. In particular, we believe that contribution ex-TAC can provide a measure of period-to-period comparisons for all pricing options within our business. Accordingly, we believe that this measure provides information to investors and the market in understanding and evaluating our operating results in the same manner as our management and board of directors.

Adjusted EBITDA is a non-GAAP financial measure defined by us as net income (loss) before interest expense (income), net, income tax benefit (expense), depreciation, amortization, stock-based compensation and certain other items that are not related to our core operations, such as restructuring charges, transaction expenses and the extinguishment of debt. Net income (loss) is the most comparable GAAP financial measure. Adjusted EBITDA as a percentage of contribution ex-TAC is a non-GAAP financial measure we calculate by dividing adjusted EBITDA by contribution ex-TAC for the period or periods presented.

Adjusted EBITDA and adjusted EBITDA as a percentage of contribution ex-TAC are used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that the exclusion of the amounts eliminated in calculating adjusted EBITDA can provide a measure for period-to-period comparisons of our business. Adjusted EBITDA as a percentage of contribution ex-TAC, a non-GAAP financial measure, is used by our management and board of directors to evaluate adjusted EBITDA relative to our profitability after costs that are directly variable to revenues, which comprise TAC. Accordingly, we believe that adjusted EBITDA and adjusted EBITDA as a percentage of contribution ex-TAC provide information to investors and the market in understanding and evaluating our operating results in the same manner as our management and board of directors.

Non-GAAP net income (loss) is a non-GAAP financial measure defined by us as net income (loss) adjusted to eliminate the impact of stock-based compensation and certain other items that are not related to our core operations, such as restructuring charges, transaction expenses and the extinguishment of debt. Net income (loss) is the most comparable GAAP financial measure. Non-GAAP net income (loss) is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of stock-based compensation, gain on debt extinguishment, and certain other items that are not related to our core operations provides measures for period-to-period comparisons of our business and additional insight into our core controllable costs. Accordingly, we believe that non-GAAP net income (loss) provides information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Non-GAAP earnings (loss) per share of Class A common stock—basic and diluted is a non-GAAP financial measure defined by us as earnings (loss) per share of Class A common stock—basic and diluted, adjusted to eliminate the impact of stock-based compensation and certain other items that are not related to our core operations, such as restructuring charges, transaction expenses, and the extinguishment of debt. Earnings (loss) per share of Class A common stock—basic and diluted is the most comparable GAAP financial measure. Non-GAAP earnings (loss) per share of Class A common stock—basic and diluted is used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of stock-based compensation, gain on extinguishment of debt and certain other items that are not related to our core operations provides measures for period-to-period comparisons of our business and provides additional insight into our core controllable costs. Accordingly, we believe that non-GAAP earnings (loss) per share of Class A common stock—basic and diluted provides information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Non-GAAP operating expenses is a non-GAAP financial measure. Total operating expenses is the most comparable GAAP financial measure. Non-GAAP operating expenses is defined by us as total operating expenses plus other expense (income), net less TAC, stock-based compensation, depreciation, amortization, and certain other items that are not related to our core operations, such as restructuring charges and transaction expenses. Non-GAAP operating expenses is a key component in calculating adjusted EBITDA, which is one of the measures we use to provide our quarterly and annual business outlook to the investment community. Additionally, non-GAAP operating expenses is used by our management and board of directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. We believe that the elimination of depreciation, amortization, stock-based compensation, TAC and certain other items not related to our core operations provides another measure for period-to-period comparisons of our business, provides additional insight into our discretionary costs and is a useful metric for investors because it allows them to evaluate our operational performance in the same manner as our management and board of directors.

These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, the Company’s financial information calculated in accordance with GAAP and should not be considered measures of the Company’s liquidity. Further, these non-GAAP financial measures as defined by the Company may not be comparable to similar non-GAAP financial measures presented by other companies, including peer companies, and therefore comparability may be limited. The presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that the Company’s future results, cash flows or leverage will be unaffected by other unusual or non-recurring items. Management encourages investors and others to review Viant’s financial information in its entirety and not rely on a single financial measure.

Reconciliation of Non-GAAP Financial Measures

The following tables show the reconciliations of the Company’s non-GAAP financial measures contained in this press release to the most directly comparable GAAP financial measures.

The following table presents the calculation of gross profit and the reconciliation of gross profit to contribution ex-TAC for the periods presented (unaudited; in thousands):

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Revenue

$

54,509

$

82,715

$

197,168

$

224,127

Less: Platform operations

(32,051

)

(44,578

)

(116,725

)

(129,604

)

Gross profit

22,458

38,137

80,443

94,523

Add back: Other platform operations

10,920

10,346

44,285

46,977

Contribution ex-TAC

$

33,378

$

48,483

$

124,728

$

141,500

The following table presents a reconciliation of total operating expenses to non-GAAP operating expenses for the periods presented (unaudited; in thousands):

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Operating expenses:

Platform operations

$

32,051

$

44,578

$

116,725

$

129,604

Sales and marketing

15,966

15,173

63,957

65,042

Technology and development

5,704

4,851

21,294

25,372

General and administrative

9,994

10,428

44,452

46,904

Total operating expenses

63,715

75,030

246,428

266,922

Add:

Other expense, net

1