DoubleVerify Holdings, Inc. — Q3 2026 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2026; unaudited. DoubleVerify provides digital advertising verification, measurement and activation services through an AI-enabled media effectiveness platform. It reports as one operating segment.
Financial performance
Amounts below are in millions of dollars, except per-share data and percentages.
| Metric | Q3 2026 | Q3 2025 | Nine months 2026 | Nine months 2025 |
|---|---|---|---|---|
| Revenue | $205.6 | $188.6 | $580.3 | $542.7 |
| Operating income | $28.3 | $21.1 | $67.0 | $41.4 |
| Operating margin | 13.8% | 11.2% | 11.5% | 7.6% |
| Net income | $15.9 | $10.2 | $35.3 | $21.3 |
| Net margin | 7.7% | 5.4% | 6.1% | 3.9% |
| Diluted EPS | $0.10 | $0.06 | $0.22 | $0.13 |
| Adjusted EBITDA / margin | $75.4 / 37% | $65.9 / 35% | $195.9 / 34% | $167.8 / 31% |
| Operating cash flow | Not presented for the quarter | $136.4 | $138.5 |
- Q3 revenue grew 9%; nine-month revenue grew 7%. Q3 advertiser revenue rose 9%, with measured media transactions up 11%, partly offset by a 2% decline in measured transaction fees. For nine months, transactions rose 11% and fees declined 4%.
- Q3 Activation revenue increased 10% and Measurement increased 8%; nine-month increases were 5% and 10%, respectively. Supply-side revenue grew 5% in Q3 and 10% for nine months. Advertisers generated about 91% of Q3 revenue; gross revenue retention exceeded 95%.
- Q3 operating income rose 34%, while net income rose 56%. For nine months, operating income increased 62% and net income 65%. Depreciation and amortization rose 21% in Q3 and 19% for nine months, mainly due to internally developed software amortization.
- Q3 cost of revenue increased 15%, faster than revenue growth, primarily from higher data services, hosting and revenue-sharing costs. The filing reports cost of revenue excluding separately presented depreciation and amortization; it does not give a separately labeled gross margin.
- Income tax expense was $12.0 million in Q3 and $28.8 million for nine months; effective tax rates were 43.0% and 45.0%, compared with 50.3% and 52.9% in 2025.
Liquidity, debt and capital allocation
- At September 30, cash and cash equivalents were $250.9 million; working capital, defined excluding cash, was $158.8 million. The company also had $0.97 million of restricted cash.
- Nine-month operating cash flow was $136.4 million. Investing used $31.4 million, primarily for property, equipment and capitalized software; financing used $112.4 million, mainly for share repurchases. Cash, cash equivalents and restricted cash decreased $8.2 million to $251.8 million.
- No borrowings were outstanding under the $200 million revolving credit facility, which matures August 2029; the company reported covenant compliance. Finance lease obligations totaled $28.4 million. Operating lease liabilities totaled $80.0 million.
- The company repurchased 9.8 million shares for $100.2 million during the first nine months, with $200 million remaining under its $300 million authorization. No program repurchases occurred in Q3. The merger agreement restricts further repurchases absent Parent’s written consent, subject to exceptions.
Merger, outlook and key risks
- On August 6, 2026, DoubleVerify agreed to be acquired by Neptune BidCo US Inc., parent of Nielsen Company (US) LLC, for $13.60 per share in cash, subject to transaction terms and closing conditions. Stockholders approved the merger on October 29, after quarter-end; the filing does not state that the merger has closed. Regulatory approvals and other closing conditions remain relevant. The stated outside date is May 6, 2027, with a potential extension to August 6, 2027.
- The filing provides no specific financial guidance or quantified forward outlook. Management said existing cash, operating cash generation and the undrawn revolver should fund requirements, subject to merger-related restrictions and risks.
- Two stockholder complaints allege proxy disclosure deficiencies and seek, among other relief, to delay or rescind the merger or obtain damages. No defendants had been served as of the filing; the company said a loss was not probable and recorded no accrual.
- Merger risks include delay or failure to close, regulatory approval, transaction costs, operating restrictions, management distraction, employee and customer retention, litigation and potential termination fees. The filing describes a $60 million company termination fee and Parent fees of $144 million in the merger discussion; its risk-factor discussion also refers to $175 million under certain other circumstances.
- Other disclosed risks include competition, customer retention, platform integrations, technology and AI, cybersecurity and system interruptions, privacy regulation, economic conditions, foreign exchange and seasonal advertising activity. Management reported effective disclosure controls and no material change in internal control over financial reporting during the quarter.
Most important facts to verify
- Whether required regulatory approvals and remaining closing conditions are satisfied, the merger closes, and the $13.60-per-share consideration and timing remain unchanged.
- The status and potential impact of the stockholder complaints, and the circumstances and amounts applicable to merger termination fees.
- Whether revenue growth and transaction-volume gains persist despite lower measured transaction fees, and whether rising cost of revenue and software amortization affect margins.
- Cash conversion and working-capital trends, capitalized software and capital expenditure needs, and liquidity under merger-related operating restrictions.
- Share repurchase limits during the pending merger and the treatment of employee equity awards and the employee stock purchase plan at closing.