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Comscore Reports First Quarter 2022 Results

SCOR

Revenue of $94.0 Million, up 4% from Q1 2021

Net Loss of $9.3 Million versus $36.4 Million in Q1 2021

Adjusted EBITDA of $6.8 Million, up 22% from Q1 2021

Comscore, Inc. (Nasdaq: SCOR), a trusted partner for planning, transacting, and evaluating media across platforms, today reported financial results for the quarter ended March 31, 2022.

Q1 2022 Financial Highlights

  • Revenue for the first quarter was $94.0 million compared to $90.3 million in Q12021
  • TV measurement grew double digits year over year on new business wins and renewals with long-standing partners
  • Activation up 20% year over year as our privacy-forward solutions are beginning to scale
  • Net loss of $9.3 million compared to a net loss of $36.4 million in Q12021
  • Adjusted EBITDA of $6.8 million compared to $5.6 million in Q12021

Recent Business Developments

Cross Platform Solutions

  • MRC audit for Local and National Television measurement is underway
  • New National TV business wins with Warner Bros. Discovery and Paramount Global
  • Warner Bros. Discovery considers Comscore as an alternative currency provider with multiple national agencies
  • NBCU certifies Comscore for Local currency measurement, NBCU's only certified Local provider
  • Comcast Cable's ad sales division Effectv announces Comscore as a currency for its local markets
  • Sinclair becomes first TV group to subscribe to a multiyear contract with Comscore's Consumer Intelligence (CCI) for local markets
  • Expanded relationship with WideOrbit to include Comscore as a new currency for its local markets, with automated TV buying and selling across 1700 stations in all 210 markets

Digital Ad Solutions

  • Renewed partnership with IRI to add custom CPG segments to Comscore's growing Activation suite of privacy-forward product offerings
  • Tremor International partners with Comscore's cookie-free Predictive Audiences to pre-bid audience targeting across desktop, mobile and connected TV (CTV)
  • New business with Redfin and WebMD
  • CCR engagement with NBCU and Warner Bros. Discovery

"This was another solid quarter of year-over-year growth for Comscore. I am proud of the progress we are making across all our lines of business. As the measurement landscape evolves, Comscore remains focused on delivering superior products that drive the best outcomes for our clients. Throughout the quarter we continued to sign new clients and renewed long-standing currency relationships with industry-leading companies. There continues to be a tremendous opportunity for Comscore as it positions itself as the leading cross-platform currency, which we expect will continue to drive revenue growth throughout 2022," said Bill Livek, CEO and Executive Vice Chairman of Comscore.

First Quarter Summary Results

Revenue in the first quarter was $94.0 million, up 4% from $90.3 million in Q12021, with growth from increases in TV, Movies, Custom Solutions, and Activation partially offset by lower revenue from services related to our international digital measurement offering. Expenses from cost of revenues, sales and marketing, research and development and general and administrative were $97.7 million, up 2.5% from $95.4 million in Q12021.

Net loss for the quarter was $9.3 million, compared to net loss of $36.4 million in Q12021. Included in net loss for Q1 2021 was a $15.3 million non-cash charge related to the recapitalization transaction that closed in March 2021. After accounting for dividends on our convertible preferred stock, loss per share attributable to common shares was $(0.14), compared to a loss per share of $(0.49) in Q12021.

Adjusted EBITDA for the quarter was $6.8 million, compared to $5.6 million in Q12021, resulting in adjusted EBITDA margins of 7% and 6%, respectively. Adjusted EBITDA and adjusted EBITDA margin exclude stock-based compensation, change in fair value of contingent consideration, financing derivatives and warrants liability, debt extinguishment costs, amortization of cloud-computing implementation costs, and other items as presented in the accompanying tables.

Balance Sheet and Liquidity

As of March 31, 2022, cash, cash equivalents and restricted cash totaled $30.1 million. Total debt principal, including $16.0 million in outstanding borrowings under our senior secured revolving credit agreement, was $20.5 million.

2022 Outlook

Based on current trends and expectations, we continue to believe that revenue will increase mid to high single digits over 2021 and expect the adjusted EBITDA margin to be consistent with 2021.

Conference Call Information for Today, Tuesday, May 10, 2022 at 5:00 p.m. ET

Management will provide commentary on the company's results in a conference call on Tuesday, May 10, 2022 at 5:00 p.m. ET. To access this call, dial +1 844-229-7593 (U.S. and Canada) or +1 314-888-4258 (international) and reference Conference ID # 9990618. Participants are advised to dial in at least 10 minutes prior to the call to register. Additionally, a live webcast of the conference call will be available on the Investor Relations section of the company's website at ir.comscore.com/events-presentations.

Following the conference call, a replay will be available by dialing +1 855-859-2056 (U.S. and Canada) or +1 404-537-3406 (international) with Conference ID #9990618. The replay will also be available via webcast at ir.comscore.com/events-presentations.

About Comscore

Comscore is a trusted partner for planning, transacting and evaluating media across platforms. With a data footprint that combines digital, linear TV, over-the-top and theatrical viewership intelligence with advanced audience insights, Comscore allows media buyers and sellers to quantify their multiscreen behavior and make business decisions with confidence. A proven leader in measuring digital and TV audiences and advertising at scale, Comscore is the industry's emerging, third-party source for reliable and comprehensive cross-platform measurement.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal and state securities laws, including, without limitation, our expectations, forecasts, plans and opinions regarding expected revenue growth and adjusted EBITDA margin for future periods, the impact of new customer contracts and partnerships on our business and revenue prospects, evolving industry trends, Comscore's currency opportunities, and product development and innovation. These statements involve risks and uncertainties that could cause actual events to differ materially from expectations, including, but not limited to, changes in our business and customer, partner and vendor relationships; external market conditions and competition; evolving privacy and regulatory standards; the continuing impact of the Covid-19 pandemic and related government mandates; and our ability to achieve our expected strategic, financial and operational plans. For additional discussion of risk factors, please refer to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other filings that we make from time to time with the U.S. Securities and Exchange Commission (the "SEC"), which are available on the SEC's website (www.sec.gov).

Investors are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. We do not intend or undertake, and expressly disclaim, any duty or obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after the date of this press release, or to reflect the occurrence of unanticipated events.

Use of Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, we are disclosing herein adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures used by our management to understand and evaluate our core operating performance and trends. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, as they permit our investors to view our core business performance using the same metrics that management uses to evaluate our performance. Nevertheless, our use of these non-GAAP financial measures has limitations as an analytical tool, and investors should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Instead, you should consider these measures alongside GAAP-based financial performance measures, net loss, various cash flow metrics, and our other GAAP financial results. Set forth below are reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measure, net loss. These reconciliations should be carefully evaluated.

COMSCORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

As of

As of

March 31, 2022

December 31, 2021

(In thousands, except share and par value data)

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

29,629

$

21,854

Restricted cash

425

425

Accounts receivable, net of allowances of $972 and $1,173, respectively

64,618

72,059

Prepaid expenses and other current assets

14,378

14,769

Total current assets

109,050

109,107

Property and equipment, net

35,600

36,451

Operating right-of-use assets

27,744

29,186

Deferred tax assets

3,173

2,811

Intangible assets, net

33,166

39,945

Goodwill

435,473

435,711

Other non-current assets

11,507

10,263

Total assets

$

655,713

$

663,474

Liabilities, Convertible Redeemable Preferred Stock and Stockholders' Equity

Current liabilities:

Accounts payable

$

29,124

$

23,575

Accrued expenses

38,393

45,264

Contract liability

58,563

54,011

Customer advances

10,933

11,613

Warrants liability

8,085

10,520

Current operating lease liabilities

7,579

7,538

Other current liabilities

18,251

12,850

Total current liabilities

170,928

165,371

Non-current operating lease liabilities

34,238

36,055

Non-current portion of accrued data costs

18,195

16,005

Revolving line of credit

16,000

16,000

Deferred tax liabilities

2,762

2,103

Other non-current liabilities

12,445

16,879

Total liabilities

254,568

252,413

Commitments and contingencies

Convertible redeemable preferred stock, $0.001 par value; 82,527,609 shares authorized, issued and outstanding as of March 31, 2022 and December 31, 2021; aggregate liquidation preference of $215,688 as of March 31, 2022, and $211,863 as of December 31, 2021

187,885

187,885

Stockholders' equity:

Preferred stock, $0.001 par value; 7,472,391 shares authorized as of March 31, 2022 and December 31, 2021, respectively; no shares issued or outstanding as of March 31, 2022 or December 31, 2021

Common stock, $0.001 par value; 275,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 97,470,138 shares issued and 90,705,342 shares outstanding as of March 31, 2022, and 97,172,086 shares issued and 90,407,290 shares outstanding as of December 31, 2021

91

90

Additional paid-in capital

1,687,608

1,683,883

Accumulated other comprehensive loss

(12,639

)

(12,098

)

Accumulated deficit

(1,231,816

)

(1,218,715

)

Treasury stock, at cost, 6,764,796 shares as of March 31, 2022 and December 31, 2021

(229,984

)

(229,984

)

Total stockholders' equity

213,260

223,176

Total liabilities, convertible redeemable preferred stock and stockholders' equity

$

655,713

$

663,474

COMSCORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)

Three Months Ended March 31,

(In thousands, except share and per share data)

2022

2021

Revenues

$

93,966

$

90,330

Cost of revenues(1) (2)

52,918

52,702

Selling and marketing (1) (2)

17,166

17,827

Research and development(1) (2)

9,532

10,353

General and administrative (1) (2)

18,117

14,468

Amortization of intangible assets

6,779

6,439

Total expenses from operations

104,512

101,789

Loss from operations

(10,546

)

(11,459

)

Other income (expense), net

2,433

(8,274

)

Gain from foreign currency transactions

420

1,074

Interest expense, net

(200

)

(7,045

)

Loss on extinguishment of debt

(9,629

)

Loss before income taxes

(7,893

)

(35,333

)

Income tax provision

(1,383

)

(1,022

)

Net loss

$

(9,276

)

$

(36,355

)

Net loss available to common stockholders

Net loss

$

(9,276

)

$

(36,355

)

Convertible redeemable preferred stock dividends

(3,825

)

(935

)

Total net loss available to common stockholders

$

(13,101

)

$

(37,290

)

Net loss per common share:

Basic and diluted

$

(0.14

)

$

(0.49

)

Weighted-average number of shares used in per share calculation - Common Stock:

Basic and diluted

91,686,733

76,147,342

Comprehensive loss:

Net loss

$

(9,276

)

$

(36,355

)

Other comprehensive loss:

Foreign currency cumulative translation adjustment

(541

)

(2,151

)

Total comprehensive loss

$

(9,817

)

$

(38,506

)

(1) Excludes amortization of intangible assets, which is presented separately in the Consolidated Statements of Operations and Comprehensive Loss.

(2) Stock-based compensation expense is included in the line items above as follows:

Three Months Ended March 31,

2022

2021

Cost of revenues

$

301

$

855

Selling and marketing

263

955

Research and development

200

642

General and administrative

1,772

2,485

Total stock-based compensation expense

$

2,536

$

4,937

COMSCORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended March 31,

(In thousands)

2022

2021

Operating activities:

Net loss

$

(9,276

)

$

(36,355

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Amortization of intangible assets

6,779

6,439

Depreciation

4,191

4,054

Stock-based compensation expense

2,536

4,937

Change in fair value of contingent consideration liability

2,348

Non-cash operating lease expense

1,483

1,262

Amortization expense of finance leases

704

443

Deferred tax provision

513

638

Change in fair value of warrants liability

(2,435

)

10,001

Loss on extinguishment of debt

9,629

Non-cash interest expense on senior secured convertible notes

4,692

Other

469

260

Changes in operating assets and liabilities, net of effect of acquisition:

Accounts receivable

7,301

7,326

Prepaid expenses and other assets

(1,270

)

3,119

Accounts payable, accrued expenses and other liabilities

(2,288

)

4,970

Contract liabilities and customer advances

3,209

(2,085

)

Current Operating lease liabilities

(1,856

)

(1,442

)

Net cash provided by operating activities

12,408

17,888

Investing activities:

Capitalized internal-use software costs

(3,452

)

(3,535

)

Purchases of property and equipment

(347

)

(157

)

Net cash used in investing activities

(3,799

)

(3,692

)

Financing activities:

Principal payments on finance leases

(796

)

(466

)

Principal payment and extinguishment costs on senior secured convertible notes

(204,014

)

Principal payment and extinguishment costs on secured term note

(14,031

)

Proceeds from issuance of convertible redeemable preferred stock, net of issuance costs

188,183

Other

48

(149

)

Net cash used in financing activities

(748

)

(30,477

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(86

)

(588

)

Net increase (decrease) in cash, cash equivalents and restricted cash

7,775

(16,869

)

Cash, cash equivalents and restricted cash at beginning of period

22,279

50,741

Cash, cash equivalents and restricted cash at end of period

$

30,054

$

33,872

As of March 31,

2022

2021

Cash and cash equivalents

$

29,629

$

29,075

Restricted cash

425

4,797

Total cash, cash equivalents and restricted cash

$

30,054

$

33,872

Reconciliation of Non-GAAP Financial Measures

The following table presents a reconciliation of GAAP net loss to non-GAAP adjusted EBITDA and adjusted EBITDA margin for each of the periods identified:

Three Months Ended March 31,

(In thousands)

2022 (Unaudited)

2021 (Unaudited)

GAAP net loss

(9,276

)

(36,355

)

Amortization of intangible assets

6,779

6,439

Depreciation

4,191

4,054

Income tax provision

1,383

1,022

Amortization expense of finance leases

704

443

Interest expense, net

200

7,045

EBITDA

3,981

(17,352

)

Adjustments:

Stock-based compensation expense

2,536

4,937

Change in fair value of contingent consideration liability

2,348

Amortization of cloud-computing implementation costs

359

Loss on extinguishment of debt

9,629

Other (income) expense, net (1)

(2,435

)

8,351

Non-GAAP adjusted EBITDA

$

6,789

$

5,565

Non-GAAP adjusted EBITDA margin (2)

7.2

%

6.2

%

(1) Adjustments to other (income) expense, net reflect non-cash changes in the fair value of financing derivatives, interest make-whole derivative and warrants liability included in other income (expense), net on our Condensed Consolidated Statements of Operations and Comprehensive Loss.

(2) Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue reported on our Condensed Consolidated Statements of Operations and Comprehensive Loss for the applicable period.

We do not provide GAAP net loss on a forward-looking basis because we are unable to predict with reasonable certainty our future stock-based compensation expense, fair value adjustments, variable interest expense, litigation and restructuring expense and any unusual gains or losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. For this reason, we are unable without unreasonable effort to provide a reconciliation of adjusted EBITDA to the most directly comparable GAAP measure, GAAP net loss, on a forward-looking basis.

Revenues

Revenues from our two offerings of products and services are as follows:

Three Months Ended March 31,

(In thousands)

2022 (Unaudited)

% of Revenue

2021 (Unaudited)

% of Revenue

$ Variance

% Variance

Digital Ad Solutions

$

53,137

56.5

%

$

53,045

58.7

%

$

92

0.2

%

Cross Platform Solutions (1)

40,829

43.5

%

37,285

41.3

%

3,544

9.5

%

Total revenues

$

93,966

100.0

%

$

90,330

100.0

%

$

3,636

4.0

%

(1) Cross Platform Solutions revenue includes revenue from our movies business, which grew from $6.8 million in the first quarter of 2021 to $8.2 million in the first quarter of 2022.