DMS Announces Q4 & Full Year 2022 Financial Results & The Completion Of Asset Purchases

DMS serves 285 scaled enterprise customers and over 7,000 SMBs across the P&C Insurance, Health Insurance, Ecommerce, Career and Education and Consumer Finance verticals with digital performance marketing solutions.

“We are proud of our results in a dynamic operating environment, exceeding guidance for full year 2022 net revenue. Our results demonstrate the strength of our agnostic solutions, which are highlighted by the diversity in our customers and the end markets we serve. We are excited to add the HomeQuote.io marketplace and ClickDealer’s international performance ad network to the DMS ecosystem,” said Joe Marinucci, CEO of DMS. “Home improvement and related home services represent an enormous addressable market opportunity for future growth. ClickDealer’s international ad network will expand our Brand Direct business globally, allowing us to serve more advertisers and consumers in key verticals and end markets. Both businesses will continue to benefit from our proprietary technology, first-party data and expansive and agnostic media reach.”

“Diversity in both our customer base and verticals we serve allows DMS to remain agile to move as markets dictate, giving us a competitive advantage. Earlier this year, we focused on strengthening our balance sheet, which provides ample flexibility to continue to invest in our strategic growth initiatives. Given the length of the current market cycle, we continue to be diligently focused on managing our operating expenses as a major financial performance lever that is fully under our control,” Rick Rodick, CFO, added.

Additionally, DMS successfully raised new equity financing to strengthen the company's balance sheet. This financing includes participation by DMS co-founders along with strategic investors and will better position the company to execute on its growth initiatives in 2023 and beyond. For additional information, see the private placement of convertible preferred stock press release at https://investors.digitalmediasolutions.com.

Fourth Quarter 2022 Performance:

(All comparisons are relative to the fourth quarter of 2021)

• Net revenue of $100.8 million, down 15.3%
• Gross profit margin of 24.8%, a decrease of 4.9 PPTS
• Variable Marketing Margin of 30.6%, an increase of 0.2 PPTS
• Operating expenses totaled $50.1 million, a decrease of  $4.7 million
• Net loss of $25.1 million compared to net income of $3.9 million
• Adjusted EBITDA of $7.1 million compared to $14.7 million
• EPS of $(0.38) compared to $(0.11)
• Ended the quarter with $48.8 million in cash and cash equivalents, and total debt of $256.8 million

Fourth Quarter 2022 Segment Performance (including intra-company revenue):

(All comparisons are relative to the fourth quarter of 2021)

• Brand Direct Solutions generated revenue of $55.9 million, down 23.1%. Gross margin was 21.3%, down from 23.7%.
• Marketplace Solutions generated revenue of $50.3 million, down 14.6%. Gross margin was 22.0%, down from 28.4%.
• Technology Solutions generated revenue of $2.3 million, down 37.4%.  Gross margin was 83.4%, up from 37.6%.

Full Year 2022 Performance:

(All comparisons are relative to the full year of 2021)

• Net revenue of $391.1 million, down 8.6%
• Gross profit margin of 26.4%, a decrease of 2.8 PPTS
• Variable Marketing Margin of 32.7%, a decrease of 2.7 PPTS
• Operating expenses totaled $155.8 million, a decrease of $29.3 million
• Net loss of $52.5 million compared to net income of $6.2 million
• Adjusted EBITDA of $25.7 million compared to $58.0 million
• EPS of $(0.84) compared to $0.06
• Ended the year with $48.8 million in cash and cash equivalents, and total debt of $256.8 million

Full Year 2022 Segment Performance (including intra-company revenue):

(All comparisons are relative to the full year of 2021)

• Brand Direct Solutions generated revenue of $204.2 million, down 19.5%. Gross margin was 21.0%, down from 23.0%.
• Marketplace Solutions generated revenue of $216.4 million, down 3.5%. Gross margin was 24.1%, down from 27.0%.
• Technology Solutions generated revenue of $9.8 million, up 1.7%. Gross margin was 85.4%, up from 63.2%.