Viant Technology Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. The audited financial statements received an unqualified opinion. Viant operates Adelphic, an omnichannel demand-side platform for programmatic advertising, using people-based identity and data capabilities. It completed its IPO in February 2021.
Financial performance and position
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | $224.1 million | $165.3 million | +35.6% |
| Gross profit | $94.5 million | $77.0 million | +22.8% |
| Gross margin | 42.2% | 46.6% | Down 4.4 percentage points |
| Contribution ex-TAC (non-GAAP) | $141.5 million | $110.5 million | +28.0% |
| Operating income (loss) | $(42.8) million | $21.8 million | Turned to loss |
| Net income (loss), consolidated | $(37.6) million | $20.6 million | Turned to loss |
| Adjusted EBITDA (non-GAAP) | $37.1 million | $31.8 million | +17% |
| Cash from operating activities | $28.7 million | $18.9 million | +51.9% |
- FY2021 expenses included $68.8 million of stock-based compensation, compared with none in FY2020. Management reported non-GAAP net income of $23.9 million after specified adjustments; adjusted EBITDA and other non-GAAP measures should be considered alongside GAAP results.
- Fourth-quarter revenue was $82.7 million versus $56.5 million a year earlier. Fourth-quarter net income was $7.5 million versus $12.9 million, and adjusted EBITDA was $17.4 million versus $15.6 million.
- At year-end, cash was $238.5 million, working capital was $269.1 million, and total debt was $17.5 million. Current assets were $352.2 million and current liabilities $83.1 million.
- Cash provided by investing activities was $(7.4) million, including $6.9 million of capitalized software development costs. Financing activities provided $207.6 million, primarily reflecting $232.5 million of net IPO proceeds, partially offset by member tax distributions, offering costs, and taxes on equity-award net settlement.
Material changes versus the prior comparable period
- Revenue rebounded following COVID-19-related advertising pullbacks in 2020. FY2021 growth reflected higher platform usage, increased demand for people-based advertising, and less volatile pandemic effects; travel and tourism and retail revenue increased 51% year over year.
- Gross profit grew more slowly than revenue, and gross margin declined. Platform operations rose 47%, including a 51% increase in traffic acquisition costs (TAC), while operating expenses rose from $143.5 million to $266.9 million.
- Sales and marketing, technology and development, and general and administrative expenses increased 125%, 192%, and 166%, respectively. The company attributed much of the increases to IPO-related stock compensation, increased headcount, and public-company costs.
- Cash increased from $9.6 million to $238.5 million, chiefly following the IPO. The $6.0 million Paycheck Protection Program loan and accrued interest were forgiven in June 2021, producing a $6.1 million gain on debt extinguishment.
- Active customers increased 17% to 309 from 264. Average contribution ex-TAC per active customer increased 9% to $458,000.
Outlook, commentary, and risks
- The filing provides no specific financial guidance or quantified revenue or earnings forecast. Management expects to continue investing in platform operations, product development, identity resolution, channel integrations, and sales and marketing; these investments may weigh on near-term profitability.
- Management said existing cash, operating cash flow, and undrawn credit availability should meet cash requirements over the next 12 months. The $40 million revolving facility matures October 31, 2024; $17.5 million was drawn at year-end. It is secured by substantially all assets, includes covenants, and requires a minimum 1.40:1 fixed-charge coverage ratio when undrawn availability falls below 25%. Viant reported compliance at year-end.
- Key business risks include customer retention and spend levels, reliance on advertising agencies and holding companies, access to inventory and third-party data, intense competition, and the uncertain pace and impact of the shift away from third-party cookies. Two agency holding companies represented 15.5% and 14.2% of FY2021 revenue when agencies are aggregated at the holding-company level.
- Privacy and security regulation is evolving, including the anticipated expansion of California privacy requirements in 2023. The filing also describes cybersecurity, platform availability, supplier payment versus customer collection timing, COVID-19 and macroeconomic uncertainty, and seasonal advertising spending as risks.
- The Tax Receivable Agreement generally requires Viant to pay continuing LLC members 85% of certain realized or deemed tax savings; accelerated payments in specified circumstances could exceed actual cash tax benefits. The founders’ parties held 74.9% of voting power, and Viant qualified as a controlled company.
- No current legal proceeding was identified as likely to have a material adverse effect. Management reported effective disclosure controls and internal control over financial reporting at year-end; the auditor did not provide an internal-controls attestation because Viant qualified for the emerging-growth-company exemption.
Important facts for investors to verify
- Whether revenue and customer-spend growth persists after the COVID-19 recovery, and whether customer concentration or agency relationships change.
- Whether margin performance improves as revenue grows, particularly given higher TAC and sharply increased operating expenses.
- The recurring cash-earnings picture after separating stock-based compensation and the one-time PPP loan forgiveness gain from GAAP results.
- Cash conversion and working-capital exposure: receivables were $110.7 million, and supplier payments may precede collections from customers.
- Progress in replacing or reducing cookie-dependent targeting, continued access to usable data and inventory, and compliance with changing privacy rules.
- Potential dilution from equity awards and LLC-unit exchanges, and the liquidity implications of the Tax Receivable Agreement and credit-facility covenants.