Digital Media Solutions, Inc. Announces 2021 Financial Results

  • Record fourth-quarter revenue of $119 million, up 17% year-over-year; Full-year 2021 revenue of $428 million, up 29% year-over-year
  • Record fourth-quarter adjusted revenue totaled $122 million, up 17% year-over-year; Full-year 2021 adjusted revenue of $442 million, up 30% year-over-year
  • Net income and adjusted EBITDA in the fourth quarter of $(4) million and $15 million, with adjusted EBITDA flat year-over-year; Full-year 2021 net income and adjusted EBITDA of $6 million and $58 million, with adjusted EBITDA up 7% year-over-year.
  • Fourth quarter gross margin of 30% and Variable Marketing Margin (VMM) of 36%, respectively; 2021 gross margin of 30% and VMM of 35%
  • Announced first quarter 2022 revenue guidance of $102-107 million and adjusted EBITDA guidance of $10-12 million.
  • Announced fiscal 2022 revenue guidance of $465-475 million and adjusted EBITDA guidance of $55-60 million.

Digital Media Solutions, Inc. (NYSE: DMS), a leading provider of digital performance advertising technology solutions connecting consumers and advertisers, today announced record financial results for the fourth quarter and fiscal year ended December 31, 2021.

“In the fourth quarter, we generated more revenue than any other quarter in DMS history, while maintaining strong cash generation,” said Joe Marinucci, CEO of DMS. “We have demonstrated the power of our data-driven, vertical and channel-agnostic model which, time and time again, has been the fuel that has helped our business continue its positive growth momentum. »

Dynamic diversification, a consistent go-to-market strategy for DMS, allowed the company to pivot quickly to meet the needs of consumers and advertisers in the fourth quarter. As a result, the two main DMS business segments – Brand-Direct and Marketplace Solutions – grew in the fourth quarter of 2021, up 17% and 25% respectively year-on-year, driven by the strength of the market. health insurance, especially during open enrollment periods, and e-commerce.

On a segment basis, during the quarter, 28% of DMS’s revenue came from auto insurance, 23% from health insurance, 20% from e-commerce, 10% from career and education and 8% consumer credit. Each of these sectors is supported by both Brand-Direct and Marketplace Solutions. Similarly, across all DMS business segments, no single media channel or publisher accounted for more than a quarter of the total DMS offering.

Insurance revenue, 58% of our total revenue in the fourth quarter, was up 13% year-over-year, even as prices for auto insurance advertising offers remained low due to carrier loss rate. Health insurance, now a major activity for DMS, recorded organic growth of 35% compared to the previous year. As a result, auto insurance revenue accounted for 49% of DMS insurance revenue in the fourth quarter of 2021, compared to around 3/4 in the same quarter of 2020.

Dynamic diversification within the e-commerce vertical has allowed DMS to move alongside consumer demand away from vacation spending, which was marginalized by macro supply chain issues, into the robust category of health and well-being. DMS e-commerce grew 36% year over year.

In addition to the dynamic diversification, customer spending at scale and the DMS data flywheel supported the growth momentum in the fourth quarter. The company noted a 100% retention rate for its top 20 customers, which drove revenue growth of 31% year over year.

Fourth quarter 2021 performance:

  • Record revenue of $119 million, up 17% from the same quarter last year.
  • Record adjusted revenue of $122 million, up 17% from the fourth quarter of 2020.
  • Gross profit margin of 30%, compared to 27% in the prior year quarter.
  • Variable marketing margin of 36%, compared to 32% in Q4 2020.
  • Operating expenses totaled $39 million, a decrease of $6.4 million year over year.
  • Net profit of (4) million dollars compared to (18) million dollars in the same quarter last year.
  • Adjusted EBITDA of $15 million, flat year-over-year.
  • EPS was $(0.11) versus $(0.32) in Q4 2020.
  • We ended the quarter with $26 million in cash, cash equivalents and marketable securities and total debt of $220 million, representing approximately 3.3x net leverage.

Segment performance in the fourth quarter of 2021 (excluding intra-group revenues):

  • Brand-Direct Solutions generated revenues of $73 million, up 17% from the same quarter last year. Gross margin was 24%, compared to 22% the previous year.
  • Marketplace Solutions generated revenues of $59 million, up 25% from the same quarter last year. Gross margin was 28%, compared to 26% the previous year.
  • Other Solutions generated revenue of $4 million, down 6% from the fourth quarter of 2020. Gross margin was 38%, compared to 44% a year earlier.

Performances for the year 2021:

  • Record revenue of $428 million, up 29% year-over-year.
  • Record adjusted revenue of $442 million, up 30% from fiscal 2020.
  • Gross profit margin was 30%, stable compared to fiscal 2020.
  • The variable trading margin was 35%, compared to 34% in 2020.
  • Operating expenses totaled $122 million, up $10 million from 2020.
  • Net profit of $6 million, compared to a loss of $14 million the previous year.
  • Adjusted EBITDA of $58 million, up 7% year-over-year.
  • EPS stood at $0.06 versus ($0.23) in 2020.

Segment performance for the year 2021 (excluding intra-group revenues):

  • Brand-Direct revenue was $254 million, up 28% from fiscal 2020. Gross margin was 24% compared to a margin of 24% in 2020.
  • Market revenue of $224 million, up 45% from last year. Gross margin of 27% compared to a margin of 29% in 2020.
  • Other Solutions generated revenues of $10 million, up 3% compared to 2020. Gross margin of 63% compared to a margin of 64% in 2020.

Forecasts for the first quarter and full year 2022:

With the combination of phased spending, our data flywheel and aggressive diversification, the company believes it is well positioned for 2022. DMS is currently anticipating ranges for revenue, gross margin, marketing margin variable and adjusted EBITDA as follows:

First quarter of 2022:

  • Turnover: 102 to 107 million dollars
  • Gross margin: 28% to 31%
  • Variable marketing margin: 32-36%.
  • Adjusted EBITDA: $10 to $12 million

Full year 2022:

  • Turnover: 465 to 475 million dollars
  • Gross margin: 28% to 31%
  • Variable marketing margin: 32-36%
  • Adjusted EBITDA: $55 to $60 million

Adjusted Revenue, Adjusted EBITDA and Variable Trading Margin are non-GAAP financial measures. Management believes that Adjusted Revenue, Adjusted EBITDA and Variable Trading Margin provide useful information to investors and help explain and isolate the basic operating performance of the business – see ” Non-GAAP Financial Measures” below. For guidance purposes, the Company does not provide a quantitative reconciliation of these non-GAAP measures in reliance on the “unreasonable efforts” exception for forward-looking non-GAAP measures set forth in the SEC rules. because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated without unreasonable effort and expense.

Conference Call and Webcast Information:

The US toll-free number for the conference call is 1-844-200-6205, and the international dial-in number is 1-646-904-5544. The passcode is 220107. A live webcast of the conference call will be available on the Investor Relations page of the Company’s website at https://investors.digitalmediasolutions.com.

A replay will be available after the conclusion of the call from March 14, 2022 to March 21, 2022. 1-929-458-6194. The replay passcode is 689733.

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