0001725134-20-000040 | 10-Q | XBRL Viewer | Digital Media Solutions INC

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Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2020	Nov. 06, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity Registrant Name	Digital Media Solutions, Inc.
Entity Central Index Key	0001725134
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38393
Entity Tax Identification Number	98-1399727
Entity Address, Address Line One	4800 140th Avenue N.
Entity Address, Address Line Two	Suite 101
Entity Address, City or Town	Clearwater
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33762
City Area Code	877
Local Phone Number	236-8632
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Class A Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Class A common stock, $0.0001 par value per share
Trading Symbol	DMS
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		32,392,577
Redeemable Warrants to Acquire Class A Common Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Redeemable warrants to acquire Class A common stock
Trading Symbol	DMS WS
Security Exchange Name	NYSE
Class B Common Stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		25,999,464

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash	$ 24,500	$ 3,008
Accounts receivable, net of allowances of $875 and $683, respectively	38,656	30,137
Prepaid and other current assets	2,727	2,217
Total current assets	65,883	35,362
Property and equipment, net	13,662	8,728
Goodwill	44,368	41,826
Intangible assets, net	50,275	57,935
Deferred tax assets	18,522	0
Other assets	285	254
Total assets	192,995	144,105
Current liabilities:
Accounts payable	28,433	24,160
Accrued expenses and other current liabilities	10,798	10,839
Current portion of long-term debt	4,150	4,150
Contingent consideration payable	0	1,000
Total current liabilities	43,381	40,149
Commitments and contingencies (Note 12)
Long-term debt	197,059	201,048
Long-term TRA liability	15,174	0
Deferred tax liability	7,514	8,675
Other non-current liabilities	537	491
Total liabilities	263,665	250,363
Preferred stock, $0.0001 par value, 100,000 shares authorized; none issued and outstanding at September 30, 2020	0	0
Additional paid-in capital	(43,145)	0
Retained earnings	5,342	0
Total stockholders' deficit	(37,797)	0
Non-controlling interest	(32,873)	0
Member deficit	0	(106,258)
Total deficit	(70,670)	(106,258)
Total liabilities and deficit	$ 192,995	144,105
Common stock authorized (in shares)	600,000,000
Class A Common Stock
Current liabilities:
Common stock	$ 3	0
Common stock authorized (in shares)	500,000,000
Common stock outstanding (in shares)	32,293,793
Class B Common Stock
Current liabilities:
Common stock	$ 3	0
Common stock authorized (in shares)	60,000,000
Common stock outstanding (in shares)	25,857,070
Class C common stock
Current liabilities:
Common stock	$ 0	$ 0
Common stock authorized (in shares)	40,000,000
Common stock issued (in shares)	0
Common stock outstanding (in shares)	0

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net revenue	$ 82,829	$ 57,575	$ 230,753	$ 173,142
Cost of revenue	57,777	39,101	160,338	117,084
Salaries and related costs	7,882	6,599	24,114	20,495
General and administrative expenses	6,407	4,479	16,356	13,514
Acquisition costs	3,248	11,707	3,322	17,492
Depreciation and amortization	4,636	2,201	13,307	6,165
Income (loss) from operations	2,879	(6,512)	13,316	(1,608)
Interest expense	3,421	2,980	10,702	7,389
Net (loss) income before income taxes	(542)	(9,492)	2,614	(8,997)
Income tax expense	1,636	0	1,901	0
Net (loss) income	(2,178)	(9,492)	713	(8,997)
Net loss attributable to non-controlling interest	(3,315)	0	(424)	0
Net income (loss) attributable to Digital Media Solutions, Inc.	$ 1,137	$ (9,492)	$ 1,137	$ (8,997)
Earnings (loss) per share attributable to Digital Media Solutions, Inc.:
Basic and diluted (usd per share)	$ 0.04		$ 0.04
Weighted-average shares outstanding - basic and diluted (in shares)	32,294,000		32,294,000

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities
Net income (loss)	$ 713	$ (8,997)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	13,307	6,165
Payment of contingent consideration	(1,000)	(15,904)
Amortization of debt issuance costs	699	409
Deferred income tax provision, net	(1,261)	0
Change in accounts receivable, net	(7,686)	(1,889)
Change in prepaid expenses and other current assets	(495)	(837)
Change in accounts payable and accrued expenses	3,210	(3,680)
Change in contingent consideration payable	0	13,841
Change in other liabilities	(136)	(131)
Net cash provided by (used in) operating activities	7,351	(11,023)
Cash flows from investing activities
Additions to property and equipment	(7,481)	(4,566)
Acquisition of businesses, net of cash acquired	(2,799)	0
Other	0	(14)
Net cash used in investing activities	(10,280)	(4,580)
Cash flows from financing activities
Proceeds from Business Combination	29,278	0
Proceeds from issuance of long-term debt	0	39,000
Payments of long-term debt	(3,423)	(1,739)
Proceeds from borrowings on revolving credit facilities	10,000	5,500
Payments of borrowings on revolving credit facilities	(11,000)	(1,500)
Payment of debt issuance costs	(264)	(719)
Payment of contingent consideration payable	0	(7,011)
Distributions to members	(170)	(21,593)
Net cash provided by financing activities	24,421	11,938
Net change in cash	21,492	(3,665)
Cash, beginning of period	3,008	4,589
Cash, end of period	24,500	924
Supplemental Disclosure of Cash Flow Information
Interest	10,070	2,798
Income taxes, net	1,570	0
Non-Cash Investing and Financing Transactions:
Issuance of equity for SmarterChaos acquisition	3,000	0
Capital expenditures included in accounts payable	$ 138	$ 284

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands	Total	Class A Common Stock	Class B Common Stock	Total Stockholders' Deficit	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-in Capital	Retained Earnings	Non- controlling Interest	Members' Deficit
Beginning balance (in shares) at Dec. 31, 2018					0	0
Beginning balance at Dec. 31, 2018	$ (73,403)			$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ (73,403)
Net income (loss)	606									606
Member distributions	(2,148)									(2,148)
Ending balance (in shares) at Mar. 31, 2019					0	0
Ending balance at Mar. 31, 2019	(74,945)			0	$ 0	$ 0	0	0	0	(74,945)
Beginning balance (in shares) at Dec. 31, 2018					0	0
Beginning balance at Dec. 31, 2018	(73,403)			0	$ 0	$ 0	0	0	0	(73,403)
Net income (loss)	(8,997)
Ending balance (in shares) at Sep. 30, 2019					0	0
Ending balance at Sep. 30, 2019	(103,993)			0	$ 0	$ 0	0	0	0	(103,993)
Beginning balance (in shares) at Mar. 31, 2019					0	0
Beginning balance at Mar. 31, 2019	(74,945)			0	$ 0	$ 0	0	0	0	(74,945)
Net income (loss)	(111)									(111)
Member distributions	(7,194)									(7,194)
Ending balance (in shares) at Jun. 30, 2019					0	0
Ending balance at Jun. 30, 2019	(82,250)			0	$ 0	$ 0	0	0	0	(82,250)
Net income (loss)	(9,492)									(9,492)
Member distributions	(12,251)									(12,251)
Ending balance (in shares) at Sep. 30, 2019					0	0
Ending balance at Sep. 30, 2019	(103,993)			0	$ 0	$ 0	0	0	0	(103,993)
Beginning balance (in shares) at Dec. 31, 2019					0	0
Beginning balance at Dec. 31, 2019	(106,258)			0	$ 0	$ 0	0	0	0	(106,258)
Net income (loss)	757									757
Member distributions	(170)									(170)
Ending balance (in shares) at Mar. 31, 2020					0	0
Ending balance at Mar. 31, 2020	(105,671)			0	$ 0	$ 0	0	0	0	(105,671)
Beginning balance (in shares) at Dec. 31, 2019					0	0
Beginning balance at Dec. 31, 2019	(106,258)			0	$ 0	$ 0	0	0	0	(106,258)
Net income (loss)	713
Ending balance (in shares) at Sep. 30, 2020		32,293,793	25,857,070		32,294,000	25,857,000
Ending balance at Sep. 30, 2020	(70,670)			(37,797)	$ 3	$ 3	(43,145)	5,342	(32,873)	0
Beginning balance (in shares) at Mar. 31, 2020					0	0
Beginning balance at Mar. 31, 2020	(105,671)			0	$ 0	$ 0	0	0	0	(105,671)
Net income (loss)	2,134									2,134
Ending balance (in shares) at Jun. 30, 2020					0	0
Ending balance at Jun. 30, 2020	(103,537)			0	$ 0	$ 0	0	0	0	(103,537)
Net income (loss)	(2,178)			1,137				1,137	921	(4,236)
Proceeds and shares issued in the Business Combination and the Conversion (Note 2) (in shares)					32,294,000	25,857,000
Proceeds and shares issued in the Business Combination and the Conversion (Note 2)	32,045			(40,795)	$ 3	$ 3	(45,006)	4,205	(34,933)	107,773
DMSH units issued in SmarterChaos acquisition (Note 7)	3,000			1,861			1,861		1,139
Ending balance (in shares) at Sep. 30, 2020		32,293,793	25,857,070		32,294,000	25,857,000
Ending balance at Sep. 30, 2020	$ (70,670)			$ (37,797)	$ 3	$ 3	$ (43,145)	$ 5,342	$ (32,873)	$ 0

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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Amount of stockholders' equity (deficit), net of receivables from officers, directors, owners, and affiliates of the entity, attributable to both the parent and noncontrolling interests. Amount excludes temporary equity. Alternate caption for the concept is permanent equity.

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+ Details

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance for credit loss	$ 875	$ 683
Preferred stock par value (usd per share)	$ 0.0001
Preferred stock, authorized (in shares)	100,000,000
Preferred stock issued (in shares)	0
Preferred stock outstanding (in shares)	0
Common stock par value (usd per share)	$ 0.0001
Common stock authorized (in shares)	600,000,000
Class A Common Stock
Common stock par value (usd per share)	$ 0.0001
Common stock authorized (in shares)	500,000,000
Common stock outstanding (in shares)	32,293,793
Class B Common Stock
Common stock par value (usd per share)	$ 0.0001
Common stock authorized (in shares)	60,000,000
Common stock outstanding (in shares)	25,857,070
Class C common stock
Common stock par value (usd per share)	$ 0.0001
Common stock authorized (in shares)	40,000,000
Common stock issued (in shares)	0
Common stock outstanding (in shares)	0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Digital Media Solutions, Inc. (“DMS Inc.”) is a performance marketing company offering a diversified lead and software delivery platform that drives high value and high intent leads to its customers. As used in this report, the “Company” refers to DMS Inc. and its consolidated subsidiaries, (including its wholly-owned subsidiary, CEP V DMS US Blocker Company, a Delaware corporation (“Blocker”)). The Company is headquartered in Clearwater, Florida, with satellite offices throughout the United States and Canada. The Company primarily operates and derives most of its revenues in the United States. Leo Holdings Corp. (“Leo”) as a special purpose acquisition company, was incorporated on November 29, 2017 as a Cayman Islands exempted company under the name for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses. On July 15, 2020, Leo consummated a transaction structured similar to a reverse recapitalization (the “Business Combination”) and domesticated as a corporation incorporated in the state of Delaware. At the closing of the Business Combination (the “Closing”), DMS Inc. acquired the equity in Blocker and a portion of the equity of Digital Media Solutions Holding, LLC (“DMSH”) and Blocker became the sole managing member of DMSH, and Leo was renamed Digital Media Solutions, Inc. The business combination was structured as a reverse recapitalization. The historical operations of DMSH are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of DMSH prior to the Business Combination; (ii) the combined results of the Company following the Business Combination; (iii) the assets and liabilities of Leo at historical cost; and (iv) the Company’s equity and earnings (loss) per share for all periods presented. Refer to Note 2. Business Combination for additional discussion related to the transaction. Unless otherwise noted below, there have been no material changes to the significant accounting policies presented in Note 2. Basis of Presentation and Summary of Significant Accounting Policies, to the DMSH consolidated financial statements for the fiscal year ended December 31, 2019, included in the Company’s prospectus that forms a part of the Form S-1 registration statement filed with the Securities and Exchange Commission (“SEC”) on August 7, 2020 (the “2020 S-1”). Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the 2020 S-1. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2019 was derived from the audited Consolidated Balance Sheet as of December 31, 2019, as presented in the 2020 S-1. In management’s opinion, these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary for a fair presentation. Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 55.5% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination) retained approximately 44.5% of the membership interest in DMSH (“non-controlling interests”). The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany activity and balances have been eliminated as part of the consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s unaudited condensed consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the allowance for doubtful accounts, business combinations, loss contingencies, asset impairments and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. DMSH, the Company’s accounting predecessor, is a limited liability company treated as a partnership for U.S. federal income tax purposes and is not subject to entity-level U.S. federal income tax, except with respect to UE, which was acquired in November 2019. Because UE is treated as a corporation for U.S. federal income tax purposes, it is subject to entity-level U.S. federal income tax. As a result of the Business Combination, Blocker’s allocable share of earnings from DMSH are also subject to U.S. federal and state and local income taxes. New Accounting Standards Recently Adopted Accounting Standards The Company qualifies as an “emerging growth company” and thus, has elected to adhere to the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance related to reference rate reform, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference LIBOR and are affected by reference rate reform. The Company adopted the standard effective March 31, 2020 and elected the expedient to prospectively adjust the effective interest rate when LIBOR is replaced. We do not expect this standard to have a material impact on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued authoritative guidance regarding the accounting for leases, and has since issued subsequent updates to the initial guidance. The amended guidance requires the recognition of assets and liabilities for operating leases. The standard was initially effective for annual and interim reporting periods beginning after December 15, 2019. However, in November 2019, the FASB issued amended guidance, which defers the effective date for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. The standard must be adopted using a modified retrospective transition. We plan to elect the following practical expedients: (1) not to reassess our prior conclusions regarding lease identification, lease classification and initial direct costs; and (2) the short term practical expedient for any leases with an initial term of 12 months or less and not recognize right-of-use assets or lease liabilities for those leases. The Company is currently evaluating all the impacts of adopting the new standard and expects the adoption of this standard to have a material impact on the Company’s consolidated balance sheet and related disclosures. In August 2018, the FASB issued authoritative guidance regarding customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. These amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance is effective for fiscal periods beginning after December 15, 2020. We are currently evaluating the potential impact on our consolidated financial statements. In June 2016, the FASB issued authoritative guidance on accounting for credit losses on financial instruments, including trade receivables, and has since issued subsequent updates to the initial guidance. The amended guidance requires the application of a current expected credit loss model, which measures credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires adoption using a modified retrospective approach and was effective for annual periods beginning after December 15, 2019. However, in November 2019, the FASB issued amended guidance, which defers the effective date for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. We are currently evaluating the potential impact on our consolidated financial statements, including our disclosures

BUSINESS COMBINATION	9 Months Ended
BUSINESS COMBINATION	Sep. 30, 2020
Business Combinations [Abstract]
BUSINESS COMBINATION	BUSINESS COMBINATION On July 15, 2020, DMSH consummated the business combination with Leo pursuant to the Business Combination Agreement (the “Busines Combination Agreement”), by and among Leo, DMSH, Blocker, Prism Data, LLC, a Delaware limited liability company (“Prism”), CEP V-A DMS AIV Limited Partnership, a Delaware limited partnership (“Clairvest Direct Seller”) and related entities (the “Sellers”). In connection with the consummation of the Business Combination, the following occurred: •Leo was domesticated and continues as a Delaware corporation, changing its name to “Digital Media Solutions, Inc.” •The Company was organized into an umbrella partnership-C corporation (or “Up-C”) structure, in which substantially all of the assets and business of the Company are held by DMSH and continue to operate through the subsidiaries of DMSH, and the Company’s sole material assets are the equity interests of DMSH indirectly held by it. •DMS Inc. consummated the PIPE investment with certain qualified institutional buyers and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors collectively subscribed for 10,424,282 shares of Class A Common Stock for an aggregate purchase price of $100.0 million. •DMS Inc. purchased all of the issued and outstanding common stock of Blocker and a portion of the units of DMSH held by Prism and Clairvest Direct Seller. Those DMSH membership interests were then immediately contributed to the capital of Blocker in exchange for aggregate consideration to the Sellers of $57.3 million in cash, 25,857,070 shares of Class B common stock, 2.0 million warrants to purchase Class A Common Stock, and 17,937,954 shares of Class C common stock. Refer to Note 9. Equity for a description of the Company’s common stock. •The Sellers amended and restated the limited liability company agreement of DMSH (the “Amended Partnership Agreement”), to, among other things: (i) recapitalize DMSH such that, as of immediately following the consummation of the Business Combination, Prism and Clairvest Direct Seller collectively own 25,857,070 of DMSH Units and Blocker owns 32,293,793 of DMSH Units; and (ii) provide Clairvest Direct Seller and Prism the right to redeem their DMSH Units for cash or, at the Company’s option, the Company may acquire the DMSH Units in exchange for cash or shares of Class A Common Stock, subject to certain restrictions set forth therein. •DMS issued 2.0 million warrants in exchange for previously held warrants in Leo, and an additional approximate 10.0 million warrants were issued in exchange for the warrants offered and sold by Leo in its initial public offering. Refer to Note 9. Equity for a description of the Company’s warrants. •DMS obtained $30.0 million in cash for working capital needs and $10.0 million to pay down outstanding indebtedness under the Monroe Facility. •The Sellers exercised their right to convert the shares of Class C Common Stock into shares of Class A Common Stock, on a one-for-one basis, in accordance with the new Certificate of Incorporation (the “Conversion”). •Prism and Clairvest Direct Seller continue to retain a significant continuing equity interest in the Company, representing 44% of the economic interests in DMSH and 44% of the voting interest in DMS Inc. (“non-controlling interest”). •On October 22, 2020, as required by the post-closing working capital adjustment provisions of the Business Combination Agreement, (i) the Company issued (a) 98,783 total additional shares of Class A Common Stock to the Blocker Sellers and (b) 142,394 total additional shares of Class B Common Stock to Prism and Clairvest Direct Seller. •In conjunction with the Business Combination, DMS Inc. and Blocker also entered into a tax receivable agreement (the “TRA”) with the Sellers. Pursuant to the TRA, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in tax basis and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any exchanges for Class A Common Stock and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result of this agreement, the Company recorded a Deferred tax asset of $18.4 million with the offset as a Long-term TRA liability of $15.7 million and Additional Paid-in Capital of $2.8 million in the unaudited condensed consolidated balance sheets. At September 30, 2020, there were (i) 32,293,793 shares of Class A Common Stock outstanding, (ii) 25,857,070 shares of Class B Common Stock outstanding, (iii) no shares of Class C Common Stock outstanding and (iv) 13,999,998 warrants to purchase Class A Common Stock outstanding. In conjunction with the Business Combination, we incurred approximately $2.4 million of transaction expenses related to incentive bonuses and other acquisition related expenses, which were recorded as Acquisitions Costs in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020.

REVENUE

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE

The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed.

The Company has organized its operations into three reportable segments: Brand Direct, Marketplace and Other. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Other reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts.

Disaggregation of Revenue

The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands):


	Brand Direct		Marketplace		Other		Corporate and other		Total
Three Months Ended September 30, 2020
Net revenue:
Customer acquisition	$	43,921	$	39,541	$	—	$	(8,755)	$	74,707
Managed services	5,247		—		2,045		—		7,292
Software services	—		—		830		—		830
Total Net revenue	$	49,168	$	39,541	$	2,875	$	(8,755)	$	82,829
Three Months Ended September 30, 2019
Net revenue:
Customer acquisition	$	41,330	$	15,542	$	—	$	(3,796)	$	53,076
Managed services	3,147		—		562		—		3,709
Software services	—		—		790		—		790
Total Net revenue	$	44,477	$	15,542	$	1,352	$	(3,796)	$	57,575


	Brand Direct		Marketplace		Other		Corporate and other		Total
Nine Months Ended September 30, 2020
Net revenue:
Customer acquisition	$	122,557	$	108,937	$	—	$	(19,001)	$	212,493
Managed services	12,885		—		2,945		—		15,830
Software services	—		—		2,430		—		2,430
Total Net revenue	$	135,442	$	108,937	$	5,375	$	(19,001)	$	230,753
Nine Months Ended September 30, 2019
Net revenue:
Customer acquisition	$	124,173	$	47,116	$	—	$	(12,517)	$	158,772
Managed services	10,054		—		1,973		—		12,027
Software services	—		—		2,343		—		2,343
Total Net revenue	$	134,227	$	47,116	$	4,316	$	(12,517)	$	173,142

Contract balances

The Company’s contract liabilities result from payments received in advance of revenue recognition received from clients, which precede the Company’s satisfaction of the associated performance obligation. If a customer pays consideration before the Company’s performance obligations are satisfied, such amounts are classified as deferred revenue on the consolidated balance sheets. As of September 30, 2020 and December 31, 2019, the balance of deferred revenue was $0.4 million and $1.2 million, respectively, and recorded within Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets. During the nine months ended September 30, 2020 and 2019, we recognized revenue of $1.2 million and $1.3 million, respectively, related to deferred revenue recorded at December 31, 2019 and 2018, respectively. We expect the majority of the deferred revenue balance at September 30, 2020 to be recognized as revenue during the fourth quarter of 2020.

When there is a delay between the completion of our performance obligations and when a customer is invoiced, revenue is recognized and recorded as unbilled revenue (i.e. contract assets) within Accounts receivable, net on the unaudited condensed consolidated balance sheets. As of September 30, 2020 and December 31, 2019, unbilled revenue included in accounts receivable was $2.0 million and $0.8 million, respectively. In line with industry practice, the Company applies the constraint on variable consideration and records revenue based on internally tracked conversions (leads delivered), net of the amount tracked and subsequently confirmed by customers. Substantially all amounts included within the unbilled revenue balance are invoiced to customers within the month directly following the period of service. Historical estimates related to unbilled revenue have not been materially different from actual revenue billed.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

REPORTABLE SEGMENTS

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

REPORTABLE SEGMENTS

The Company’s operating segments are determined based on the financial information reviewed by its chief operating decision maker (“CODM”), and the basis upon which management makes resource allocation decisions and assesses the performance of the Company’s segments. The Company evaluates the operating performance of its segments based on financial measures such as net revenue, cost of revenue, and gross profit. Given the nature of the digital marketing solutions business, the amount of assets does not provide meaningful insight into the operating performance of the Company. As a result, the amount of the Company’s assets is not subject to segment allocation and total assets is not included within the disclosure of the Company’s segment financial information.

The following tables are a reconciliation of the operations of our segments to income from operations (in thousands):


	Three Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	49,168	$	39,541	$	2,875	$	(8,755)	$	82,829
Cost of revenue	37,828		27,661		1,043		(8,755)		57,777
Gross profit	$	11,340	$	11,880	$	1,832	$	—	$	25,052
Salaries and related costs									7,882
General and administrative expenses									6,407
Acquisition costs									3,248
Depreciation and amortization									4,636
Income from operations									$	2,879


	Three Months Ended September 30, 2019
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	44,477	$	15,542	$	1,352	$	(3,796)	$	57,575
Cost of revenue	33,499		9,366		32		(3,796)		39,101
Gross profit	$	10,978	$	6,176	$	1,320	$	—	$	18,474
Salaries and related costs									6,599
General and administrative expenses									4,479
Acquisition costs									11,707
Depreciation and amortization									2,201
Loss from operations									$	(6,512)


	Nine Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	135,442	$	108,937	$	5,375	$	(19,001)	$	230,753
Cost of revenue	103,125		75,101		1,113		(19,001)		160,338
Gross profit	$	32,317	$	33,836	$	4,262	$	—	$	70,415
Salaries and related costs									24,114
General and administrative expenses									16,356
Acquisition costs									3,322
Depreciation and amortization									13,307
Income from operations									$	13,316


	Nine Months Ended September 30, 2019
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	134,227	$	47,116	$	4,316	$	(12,517)	$	173,142
Cost of revenue	100,171		29,345		85		(12,517)		117,084
Gross profit	$	34,056	$	17,771	$	4,231	$	—	$	56,058
Salaries and related costs									20,495
General and administrative expenses									13,514
Acquisition costs									17,492
Depreciation and amortization									6,165
Loss from operations									$	(1,608)

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

Changes in the carrying value of goodwill, by reporting segment, were as follows (in thousands):


	Brand Direct		Marketplace		Other		Total
Balance, December 31, 2019	$	8,616	$	32,660	$	550	$	41,826
Additions (Note 7)	—		—		2,542		2,542
Balance, September 30, 2020	$	8,616	$	32,660	$	3,092	$	44,368

The carrying amount of goodwill for all reporting units had no accumulated impairments as of September 30, 2020 and December 31, 2019.

Intangible assets, net

Finite-lived intangible assets consisted of the following (in thousands):


		September 30, 2020						December 31, 2019
	Amortization Period (Years)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Intangible assets subject to amortization:
Technology	3 to 5	$	47,946	$	(17,827)	$	30,119	$	47,946	$	(9,751)	$	38,195
Customer relationships	1 to 12	22,383		(5,127)		17,256		19,583		(3,078)		16,505
Brand	1 to 5	4,459		(2,571)		1,888		4,187		(2,556)		1,631
Non-competition agreements	3	1,815		(803)		1,012		1,815		(211)		1,604
Total		$	76,603	$	(26,328)	$	50,275	$	73,531	$	(15,596)	$	57,935

Amortization expense for finite-lived intangible assets is recorded on a straight-line basis in the pattern in which the assets’ economic benefits are consumed over their estimated useful lives. Amortization expense related to finite-lived intangible assets was $10.7 million and $5.0 million for the nine months ended September 30, 2020 and 2019, respectively.

Impairment analysis

For the nine months ended September 30, 2020, there were no events or changes in circumstances to indicate that goodwill or intangible assets are impaired.

DEBT

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

DEBT

The following table presents the components of outstanding debt (in thousands):


	September 30, 2020		December 31, 2019
Term loan	$	191,514	$	194,810
Revolving credit facility	4,000		5,000
Delayed draw term loan	8,301		8,429
Total debt	203,815		208,239
Unamortized debt issuance costs	(2,606)		(3,041)
Debt, net	201,209		205,198
Current portion of long-term debt	(4,150)		(4,150)
Long-term debt	$	197,059	$	201,048

On July 3, 2018, DMSH entered into a Credit Agreement with Monroe Capital Management Advisors (as administrative agent and lender) (the “Monroe Facility”). The Monroe Facility matures in July 2023 and bears interest at a variable rate equal to the three-month LIBOR, or an alternate base rate, plus an agreed upon margin with the lender. The Monroe Facility also contains covenants that require the Company to meet certain financial ratios and places restrictions on the payment of dividends, sale of assets, borrowing level, mergers, and purchases of capital stock, assets, and investments.

During the year ended December 31, 2019 the Monroe Facility’s capacity was amended to increase the term loan by $99.0 million for a total term commitment of $199.0 million, and this amendment also increased capacity on the revolver by an additional $2.5 million, for a total amended capacity of $221.5 million, which had an effective interest rate of 6.8% for the year ended December 31, 2019. The Company used the funds to finance a portion of the acquisition of UE, accelerate contingent consideration payments, and to add to general working capital. Refer to Note 7. Acquisitions, for a more detailed discussion on the acquisition of UE.

On January 7, 2020, the Monroe Facility was amended to increase the revolver commitment to $15.0 million.

On August 26, 2020, we amended the Monroe Facility to, among other things, (i) modify the covenant calculation of EBITDA to include certain transaction expenses incurred in connection with the Business Combination and (ii) exclude certain accounts from the SmarterChaos acquisition.

ACQUISITIONS

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

ACQUISITIONS

Smarterchaos and She is Media

On July 16, 2020, the Company acquired SmarterChaos.com, LLC, a premier digital marketing and online performance management marketer, along with She Is Media, a female-centric performance ad network, (collectively, “SmarterChaos”) for cash and equity of DMSH totaling approximately $5.8 million, net of cash, which is subject to a working capital adjustment. This acquisition expanded media distribution, allowing the Company to further accelerate the digital marketing acquisition efforts of its advertiser clients and enable brands to acquire new customers by leveraging our customer acquisition platform and the relationships cultivated by SmarterChaos.

DMSH issued the SmarterChaos sellers approximately 307 thousand DMSH Units, which are convertible to Class A Common Stock, with an aggregate total value of $3.0 million based on the DMS Inc. stock price on July 15, 2020. The SmarterChaos sellers also became parties to the Amended Partnership Agreement.

In conjunction with this acquisition, we incurred approximately $0.4 million of legal and other acquisition-related expenses, which were recorded as Acquisitions Costs in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020.

The Company primarily used an Income Approach, specifically a Discounted Cash Flow (“DCF”) analysis, which represents Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The results of operations of the acquired businesses have been included in the Company’s results of operations since the acquisition date of July 16, 2020. Under Accounting Standards Codification 805 (ASC 805), an acquirer must recognize any assets acquired and liabilities assumed at the acquisition date, measured at fair value as of that date. Assets meeting the identification criteria included tangible assets, such as real and personal property, and intangible assets. Identified intangible assets included the brand and customer relationships of the acquired business. The fair value of the brand was determined by applying an Income Approach, specifically the Relief from Royalty Method. The fair value of the acquired customer relationships was determined by applying an Income Approach, specifically the Multi Period Excess Earnings Method. As of September 30, 2020, the purchase accounting measurement period has not been finalized primarily due to the working capital adjustment, open tax contingencies and the valuation of DMSH units and intangibles.

The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands):


	July 16, 2020
Goodwill	$	2,542

Brand	272

Customer relationships	2,800
Accounts receivable	833
Other assets acquired	30
Liabilities assumed	(678)

Net assets acquired	$	5,799

The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of SmarterChaos and is included in the Other reportable segment. Intangible assets primarily consist of brand and customer relationships with an estimated useful life of three and five years, respectively.

Management is working with the SmarterChaos sellers on the working capital adjustment per the purchase agreement and expects that this will be resolved in the fourth quarter of 2020. Revenue and net income for SmarterChaos of $1.5 million and $0.1 million, respectively, were included in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020.

UE Authority, Co.

On November 1, 2019, the Company acquired UE for cash of approximately $56.6 million, which includes closing purchase price adjustments. The acquisition of UE supports the Company’s strategy of broadening its reach in the insurance vertical.

The Company primarily used an income method, or discounted cash flow (“DCF”) analysis, which represent Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The results of operations of the acquired business have been included in the Company’s results of operations since the acquisition date of November 1, 2019. The fair value of the acquired technology and customer relationships was determined using the multi period excess earnings approach. The fair value of the acquired brand was determined using the Relief from Royalty (“RFR”) method. The fair value of the non-competition agreement was determined using the income approach. As of September 30, 2020, the purchase accounting measurement period has not been finalized primarily due to open tax contingencies.

The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands):


	November 1, 2019
Goodwill	$	29,723
Technology	26,000
Brand	690
Non-competition agreements	1,520
Customer relationships	10,300
Other assets acquired	6,393
Liabilities assumed	(9,045)
Deferred tax liability	(8,961)
Net assets acquired	$	56,620

The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of UE and is included in the Marketplace reportable segment. Intangible assets primarily consist of customer relationships, technology, non-competition agreements and brand with an estimated useful life of nine years, five years, three years and one year, respectively.

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

Contingent consideration related to acquisitions

The fair value of the contingent consideration was determined using a Monte Carlo fair value analysis based on estimated performance and the probability of achieving certain targets. As certain inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. During the nine months ended September 30, 2020, we paid this contingent consideration of $1.0 million.

The following table presents assets and liabilities measured at fair value on a recurring basis (in thousands):


		December 31, 2019
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Contingent consideration	Contingent consideration payable	$	—	$	—	$	1,000	$	1,000
Total		$	—	$	—	$	1,000	$	1,000

The following table represents the change in the contingent consideration (in thousands):


	Level 3
December 31, 2019	$	1,000
Additions	—
Changes in fair value	—
Settlements	(1,000)
September 30, 2020	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

EQUITY

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

EQUITY

Authorized Capitalization

The total amount of the Company’s authorized capital stock consists of 600,000,000 shares of common stock, par value $0.0001 per share, of the DMS Inc., consisting of (i) 500,000,000 shares of Class A Common Stock, (ii) 60,000,000 shares of Class B Common Stock, (iii) 40,000,000 shares of Class C Common Stock, and (iv) 100,000,000 shares of preferred stock, par value $0.0001 per share, of the DMS Inc. (“Company Preferred Stock”). As of September 30, 2020, there were 32,293,793 shares of Class A Common Stock outstanding and 25,857,070 shares of Class B Stock outstanding.

Company Common Stock

The following table sets forth the economic and voting interests of the Company’s common stockholders as of September 30, 2020:


Class	Total Shares (1)	Economic Ownership in DMSH (2)		Economic Ownership in DMS Inc. (3)		Voting Ownership in DMS Inc. (4)
Class A Common Stock	32,293,793	55.2	%	100.0	%	55.5	%
Class B Common Stock	25,857,070	44.2	%	—	%	44.5	%

(1) Represents the total number of outstanding shares for each class of DMS Inc. common stock as of September 30, 2020.
(2) Represents (i) the Class A Common Stock holders’ indirect economic interest in DMSH through their ownership of Class A Common Stock and (ii) the Class B Common Stock holders’ direct economic interest in DMSH through their ownership of DMSH Units. The remaining economic ownership is held by the sellers in SmarterChaos acquisition.
(3) Represents the aggregate economic interest in the DMS Inc. through the stockholders' ownership of Class A Common Stock.
(4) Represents the aggregate voting interest in the DMS Inc. through the stockholders' ownership of Company common stock.

Voting rights

Each holder of Company Common Stock is entitled to one (1) vote for each share of Company Common Stock held of record by such holder. The holders of shares of Company Common Stock do not have cumulative voting rights. Except as otherwise required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will vote together as a single class on all matters on which stockholders are generally entitled to vote (or, if any holders of Company Preferred Stock are entitled to vote together with the holders of Company Common Stock, as a single class with such holders of Company Preferred Stock). In addition to any other vote required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will each be entitled to vote separately as a class only with respect to amendments to the Company Certificate of Incorporation that increase or decrease the par value of the shares of such class or alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely. Notwithstanding the foregoing, except as otherwise required by law, holders of Company Common Stock, as such, will not be entitled to vote on any amendment to the Company Certificate of Incorporation (including any Preferred Stock Designation (as defined in the Company Certificate of Incorporation) relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the Company Certificate of Incorporation (including any Preferred Stock Designation relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of Delaware (the “DGCL”).

Dividend rights

Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class A Common Stock are entitled to receive ratably, in proportion to the number of shares of Class A Common Stock held by them, such dividends and other distributions in cash, stock or property of the Company when, as and if declared thereon by the Company’s board of directors (the “Board”) from time to time out of assets or funds of the Company legally available therefor.

Except as provided in the Company Certificate of Incorporation, dividends and other distributions will not be declared or paid on the Class B Common Stock.

Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class C Common Stock are entitled to receive ratably, in proportion to the number of shares held by them, the dividends and other distributions in cash, stock or property of the Company payable or to be made on outstanding shares of Class A Common Stock that would have been payable on the shares of Class C Common Stock if each such share of Class C Common Stock had been converted into a fraction of a share of Class A Common Stock equal to the Conversion Ratio (as defined in the Company Certificate of Incorporation) immediately prior to the record date for such dividend or distribution. The holders of shares of Class C Common Stock are entitled to receive, on a pari passu basis with the holders of the Class A Common Stock, such dividend or other distribution on the Class A Common Stock when, as and if declared by the Board from time to time out of assets or funds of the Company legally available therefor. At September 30, 2020, there were no shares of Class C Common Stock outstanding.

Redemption

Pursuant to the terms and subject to the conditions of the Amended Partnership Agreement, each holder (other than Blocker) of a DMSH Unit has the right (the “Redemption Right”) to redeem each such DMSH Unit for the applicable Cash Amount (as defined in the Amended Partnership Agreement), subject to the Company’s right, in its sole and absolute discretion, to elect to acquire some or all of such DMSH Units that such holder has tendered for redemption for a number of shares of Class A Common Stock, an amount of cash or a combination of both (the “Exchange Option”), in the case of each of the Redemption Right and the Exchange Option, on and subject to the terms and conditions set forth in the Company Certificate of Incorporation and in the Amended Partnership Agreement.

Retirement of Class B Common Stock

In the event that (i) any DMSH Unit is consolidated or otherwise cancelled or retired or (ii) any outstanding share of Class B Common Stock held by a holder of a corresponding DMSH Unit otherwise ceases to be held by such holder, in each case, whether as a result of exchange, reclassification, redemption or otherwise (including in connection with the Redemption Right and the Exchange Option as described above), then the corresponding share(s) of Class B Common Stock, if any, (which, for the avoidance of doubt, will be equal to such DMSH Unit divided by the Conversion Ratio prior to and until the Effective Time (as defined below) (in the case of (i)) or such share of Class B Common Stock (in the case of (ii)) will automatically and without further action on the part of the Company or any holder of Class B Common Stock be transferred to the Company for no consideration and thereupon will be retired and restored to the status of authorized but unissued shares of Class B Common Stock.

Rights upon Liquidation

In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Company after payments to creditors of the Company that may at the time be outstanding, and subject to the rights of any holders of Preferred Stock that may then be outstanding, holders of shares of Class A Common Stock and Company C Common Stock will be entitled to receive ratably, in proportion to the number of shares held by them, all remaining assets and funds of the Company available for distribution; provided, however, that, for purposes of any such distribution, each share of Class C Common Stock will be entitled to receive the same distribution as would have been payable if such share of Class C Common Stock had been converted into a fraction of a share of Company A Common Stock equal to the Conversion Ratio immediately prior to the record date for such distribution. The holders of shares of Class B Common Stock, as such, will not be entitled to receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Automatic Conversion of Class B Common Stock

Immediately and automatically upon the earlier of (i) July 4, 2024 and (ii) the date on which there are no amounts owed to any lender pursuant to the Credit Facility, each share of Class B Common Stock will automatically and without any action on the part of the holder thereof, be reclassified as and changed, pursuant to a reverse stock split, into a fraction of a share of Class B Common Stock equal to the Conversion Ratio (the “Effective Time”).

Conversion of Class C Common Stock

Each holder of Class C Common Stock has the right, at such holder’s option, at any time, to convert all or any portion of such holder’s shares of Class C Common Stock, and the Company will have the right, at the Company’s option, from and after the Effective Time, to convert all or any portion of the issued and outstanding shares of Class C Common Stock, in each case into shares of fully paid and non-assessable Class A Common Stock at the ratio of one (1) share of Class A Common Stock for the number of shares of Class C Common Stock equal to the Issuance Multiple (as defined in the Business Combination Agreement) so converted.

Transfers

The holders of shares of Class B Common Stock will not transfer such shares other than as part of a concurrent transfer of (i) if prior to the Effective Time, a number of DMSH Units equal to the number of shares of Company Common Stock being so Transferred multiplied by the Conversion Ratio or (ii) if after the Effective Time, an equal number of DMSH Units, in each case made to the same transferee in accordance with the restrictions on transfer contained in the Amended Partnership Agreement.

Other rights

No holder of shares of Company Common Stock are entitled to preemptive or subscription rights. There are no redemption or sinking fund provisions applicable to the Company Common Stock. The rights, preferences and privileges of holders of the Company Common Stock will be subject to those of the holders of any shares of the Preferred Stock the Company may issue in the future.

Preferred Stock

The Board has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of Preferred Stock of the Company could have the effect of decreasing the trading price of Company Common Stock, restricting dividends on the capital stock of the Company, diluting the voting power of the Company Common Stock, impairing the liquidation rights of the capital stock of the Company, or delaying or preventing a change in control of the Company. At September 30, 2020, there were no shares of preferred stock outstanding.

Warrants

Each Company Public Warrant entitles the registered holder to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A Common Stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire five years after the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company Private Placement Warrants are not be redeemable by the Company so long as they are held by Sponsor or its permitted transferees. Sponsor, or its permitted transferees, has the option to exercise the Company Private Placement Warrants on a cashless basis. Except for the forgoing, the Company Private Placement Warrants have terms and provisions that are identical to those of the Company Public Warrants. If the Company Private Placement Warrants are held by holders other than Sponsor or its permitted transferees, the Company Private Placement Warrants will be redeemable by Company and exercisable by the holders on the same basis as the Company Public Warrants.

The Company may call the Company Public Warrants for redemption as follows: (1) in whole and not in part; (2) at a price of $0.01 per warrant; (3) upon a minimum of 30 days’ prior written notice of redemption; and (4) only if the last reported closing price of the Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls the Company Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Company Public Warrants to do so on a “cashless basis.”

The exercise price and number of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrant shares.

At September 30, 2020, approximately 14.0 million warrants were outstanding.

Non-controlling Interest

The non-controlling interest represents the membership interest in DMSH held by holders other than the Company. On July 15, 2020, upon the close of the Business Combination, the Prism and Clairvest Direct Sellers combined ownership percentage in DMSH was 44.5%. On July 16, 2020, DMSH issued approximately 307 thousand additional DMSH Units to the sellers in the SmarterChaos acquisition, which are included in the non-controlling interest of approximately 44.8%. The Company has consolidated the financial position and results of operations of DMSH and reflected the proportionate interest held by Prism, Clairvest Direct Seller and the SmarterChaos sellers as a non-controlling interest.

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Sep. 30, 2020
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS Registration Rights At the Closing, the Company entered into an amended and restated registration rights agreement with certain Sellers (the “Amended and Restated Registration Rights Agreement”), pursuant to which the Company registered for resale certain shares of Class A Common Stock and warrants to purchase Class A Common Stock that were held by the parties thereto. Additionally, the Sellers may request to sell all or any portion of their shares of Class A Common Stock in an underwritten offering that is registered pursuant to the shelf registration statement filed by the Company (each, an “Underwritten Shelf Takedown”); however, the Company will only be obligated to effect an Underwritten Shelf Takedown if such offering will include securities with a total offering price reasonably expected to exceed, in the aggregate, $20.0 million and will not be required to effect more than four Underwritten Shelf Takedowns in any six-month period. The Amended and Restated Registration Rights Agreement also includes customary piggy-back rights, subject to cooperation and cut-back provisions. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Amended Partnership Agreement Pursuant to the Amended Partnership Agreement, following the expiration of the lock-up period under the lock-up agreement entered into by the Company and the Sellers at the Closing, the non-controlling interests (as defined in the Amended Partnership Agreement) will have the right to redeem their DMSH Units for cash (based on the market price of the shares of Class A Common Stock) or, at the Company’s option, the Company may acquire such DMSH Units (which DMSH Units are expected to be contributed to Blocker) in exchange for cash or Class A Common Stock (a “Redemption”) on a one-for-one basis (subject to customary conversion rate adjustments, including for stock splits, stock dividends and reclassifications), in each case subject to certain restrictions and conditions set forth therein, including that any such Redemption be for an amount no less than the lesser of 10,000 DMSH Units or all of the remaining DMSH Units held by such Non-Blocker Member. In the event of a change of control transaction with respect to a Non-Blocker Member, DMSH will have the right to require such Non-Blocker Member to effect a Redemption with respect to all or any portion of the DMSH Units transferred in such change of control transaction. In connection with any Redemption (other than a Redemption by the SmarterChaos sellers) a number of shares of Class B Common. Stock will automatically be surrendered and cancelled in accordance with the Company Certificate of Incorporation. Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the TRA with the Sellers. Pursuant to the TRA, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in tax basis and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any exchanges for Class A Common Stock and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result, the Company recorded a Deferred tax asset of $18.4 million with the offset as a Long-term TRA liability of $15.7 million and Additional Paid-in Capital of $2.8 million in the unaudited condensed consolidated balance sheets. As of September 30, 2020, the total amount of payments under the TRA was $15.7 million, of which $0.5 million was current and included in Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheet. Lock-Up Agreement At the Closing, Sellers executed and delivered to the Company a lock up agreement (the “Lock-Up Agreement”), pursuant to which, among other things, Sellers agreed not to, subject to certain exceptions set forth in the Lock-Up Agreement, during the period commencing from the Closing and through the 180 day anniversary of the date of the Closing (the “Lock-Up Period”): (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of any Class A Common Stock, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Class A Common Stock, whether any such transaction described in clauses (i) or (ii) above is to be settled by delivery of Class A Common Stock or other securities, in cash or otherwise. Any waiver by the Company of the provisions of the Lock-Up Agreement requires the approval of a majority of the Company’s directors who qualify as “independent” for purposes of serving on the audit committee under the applicable rules of the SEC (including Rule 10A-3 of the Securities Exchange Act of 1934). On July 29, 2020, the Company’s Chief Executive Officer (“CEO”) and Chief Operating Officer (“COO”) executed joinder agreements to the Lock-Up Agreement in connection with Prism’s distribution of 538,912 and 538,911 Seller Warrants to CEO and COO, respectively, as a permitted transfer under the Amended Warrant Agreement and the Lock-Up Agreement. Management Agreement In consideration for various management and advisory services, DMSH pays to one of its members a quarterly retainer of $50 thousand plus any out-of-pocket expenses. The total expense for the nine months ended September 30, 2020 and 2019 was $0.1 million and $0.2 million, respectively, which was recorded in General and administrative expenses in the unaudited condensed consolidated statements of operations. The management agreement was terminated in connection with the Business Combination. DMSH Member Tax Distributions For the nine months ended September 30, 2020 and 2019, tax distributions to members of DMSH were $0.2 million and $21.6 million, respectively.

BENEFIT PLANS	9 Months Ended
BENEFIT PLANS	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
BENEFIT PLANS	BENEFIT PLANS 2020 Omnibus Incentive Plan On July 15, 2020, Leo’s shareholders approved the 2020 Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the issuance of stock options, stock appreciation rights, stock awards (including restricted stock awards (“RSAs”) and Restricted Stock Units (“RSUs”) and other stock-based awards. The aggregate number of shares reserved under the 2020 Plan is approximately 11.6 million. The 2020 Plan terminates on June 24, 2030. During the three months ended September 30, 2020, there were no shares granted under the 2020 Plan. Employee Incentive Plan The Company instituted a transaction-based cash bonus plan, the Digital Media Solutions, LLC Employee Incentive Plan (the “EIP”), in 2017, which was amended and restated on January 31, 2019. The EIP provides for a cash bonus pool payout to vested participants upon the occurrence of a “Sale of the Company” prior to December 31, 2024, in which the equity value (as determined by the board of managers) exceeds $100 million. Each EIP participant was awarded a number of bonus pool units, and is entitled to a pro rata share of the aggregate bonus pool based on the total number of vested bonus pool units held among all participants. DMSH also instituted a second transaction-based cash bonus plan on November 1, 2019, which mirrors the first plan, except that the equity value was raised to $325 million. On April 23, 2020, DMSH entered into a Business Combination with Leo. Although this business combination is not considered a “Sale of the Company” for purposes of the EIP, the board of managers was permitted at its discretion to make a payment under the plan as it deemed fit upon consummation of the business combination. The board of managers elected to pay a total of approximately $250 thousand in cash to EIP participants in connection with the Business Combination, which was paid during the three and nine months ended September 30, 2020, and these plans were terminated.

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Legal proceedings

The Company is subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of business. An estimated liability is recorded for those proceedings and claims when the loss from such proceedings and claims becomes probable and reasonably estimable. The risk of loss is reassessed each quarter and liabilities are adjusted as new information becomes available. The actual cost of resolving a claim may be substantially different from the amount of the liability recorded. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the consolidated financial position, but could be material to the consolidated results of operations or cash flows for any one period.

Lease agreements

The Company leases certain office locations, including both long-term and short-term leases, with several leases offering renewal options. Rent expense for the nine months ended September 30, 2020 and 2019 was $1.9 million and $1.5 million, respectively.

At September 30, 2020, the future minimum lease payments for the Company were comprised of the following (in thousands):


Year Ending December 31:
2020	$	595
2021	2,040
2022	1,941
2023	1,806
2024	1,304
Thereafter	425
Total	$	8,111

Management analyzed our current leases due to the COVID-19 economic environment and recorded a reserve of approximately $1.0 million as a result of the cease use of certain leased properties (included in the future minimum lease payments above), which was included in General and administrative expenses in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020. As of September 30, 2020, $0.9 million is accrued for within Accrued expenses and other current liabilities and $0.1 million is accrued for within Other non-current liabilities, on the unaudited condensed consolidated balance sheets.

DMSH Unit Redemption Rights

The Amended and Restated Partnership Agreement includes provisions intended to ensure that the Company at all times maintains a one-to-one ratio between (i) the number of outstanding shares of Class A Common Stock (including the number of shares of Class A Common Stock into which all of the outstanding shares of Class C Common Stock are convertible in accordance with the Company Certificate of Incorporation) and (ii) the aggregate number of DMSH Units owned by DMS Inc., its subsidiaries and any consolidated, combined, unitary or similar group of entities that join in filing any tax return with DMS Inc.

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2020
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES As a result of the Business Combination, the Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker, which owns 55.2% of equity interests in DMSH (after the SmarterChaos acquisition). DMSH is treated as a partnership for purposes of U.S. federal and certain state and local income tax. As a U.S. partnership, generally DMSH will not be subject to corporate income taxes (except with respect to UE, as described below). Instead, each of the ultimate partners (including DMS Inc.) are taxed on their proportionate share of DMSH taxable income. While the Company consolidates DMSH for financial reporting purposes, the Company will only be taxed on its allocable share of future earnings (i.e. those earnings not attributed to the non-controlling interests, which continue to be taxed on their own allocable share of future earnings of DMSH). The Company’s income tax expense is attributable to the allocable share of earnings from DMSH, a portion of activities of DMSH that are subject to Canadian income tax, and the activities of UE, a wholly-owned U.S. corporate subsidiary of DMSH, which is subject to U.S. federal and state and local income taxes. The income tax burden on the earnings allocated to the non-controlling interests is not reported by the Company in its condensed consolidated financial statements under GAAP. As a result, the Company’s effective tax rate is expected to differ materially from the statutory rate. The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision. The Company recorded income tax expense of $1.6 million for the three months ended September 30, 2020. The blended effective tax rate for the three and nine months ended September 30, 2020 was 74.2%, which varies from our statutory U.S. tax rate due to the tax impact of the taxable income or loss that is allocated to the non-controlling interest. The Company recorded no income tax expense or benefit for the three and nine months ended September 30, 2019. Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the TRA with the Sellers. Pursuant to the TRA, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in tax basis and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any exchanges for Class A Common Stock and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result of the Business Combination, the Company recorded a Deferred tax asset of $18.4 million with the offset as a Long-term TRA liability of $15.7 million and Additional Paid-in Capital of $2.8 million in the unaudited condensed consolidated balance sheet. As of September 30, 2020, the total amount of payments under the TRA was $15.7 million, of which $0.5 million was current and included in Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheet. CARES Act On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law. The CARES Act includes income tax provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company benefited from the deferral of payroll taxes and expects to continue to benefit for the remainder of 2020. Management is still evaluating all the impacts of the CARES Act on our business.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Basic earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc., adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. Diluted loss per share for all period presented is the same as basic loss per share as the inclusion of the potentially issuable shares would be anti-dilutive.

Prior to the Business Combination, the membership structure of DMSH included units which had profit interests. The Company analyzed the calculation of earnings per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these unaudited condensed consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the Business Combination on July 15, 2020. The basic and diluted earnings per share for the three and nine months ended September 30, 2020 represent only the period of July 15, 2020 to September 30, 2020.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Numerator:
Net (loss) income	$	(2,178)	$	713
Less: Net loss attributable to DMSH prior to the Business Combination	(4,236)		(1,345)
Less: Net income attributable to noncontrolling interests subsequent to the Business Combination	921		921
Net income attributable to DMS Inc.	$	1,137	$	1,137
Denominator:
Weighted-average shares of Class A Common Stock outstanding - basic and diluted	32,294		32,294

Earnings per share of Class A Common Stock - basic and diluted	$	0.04	$	0.04

Shares of the Company’s Class B common stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

At September 30, 2020, the Company excluded 25.9 million shares of Class B Common Stock, 14.0 million warrants outstanding, and the DMSH Units issued in the SmarterChaos acquisition as their effect would have been anti-dilutive. On October 28, 2020, the Board of Directors of DMS Inc. approved the grant of approximately 1.2 million RSUs and 0.6 million in stock options granted to the Company’s employees and directors under the 2020 Omnibus Incentive Plan. Refer to Note 11. Benefit Plans for a description of the Company’s stock incentive plan.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of presentation	Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the 2020 S-1. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2019 was derived from the audited Consolidated Balance Sheet as of December 31, 2019, as presented in the 2020 S-1. In management’s opinion, these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary for a fair presentation.
Principles of consolidation	Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 55.5% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination) retained approximately 44.5% of the membership interest in DMSH (“non-controlling interests”). The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany activity and balances have been eliminated as part of the consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s unaudited condensed consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity.
Use of estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the allowance for doubtful accounts, business combinations, loss contingencies, asset impairments and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination.
Earnings per share	Basic earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc., adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. Diluted loss per share for all period presented is the same as basic loss per share as the inclusion of the potentially issuable shares would be anti-dilutive.
Income taxes	Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. DMSH, the Company’s accounting predecessor, is a limited liability company treated as a partnership for U.S. federal income tax purposes and is not subject to entity-level U.S. federal income tax, except with respect to UE, which was acquired in November 2019. Because UE is treated as a corporation for U.S. federal income tax purposes, it is subject to entity-level U.S. federal income tax. As a result of the Business Combination, Blocker’s allocable share of earnings from DMSH are also subject to U.S. federal and state and local income taxes.
New accounting standards	New Accounting Standards Recently Adopted Accounting Standards The Company qualifies as an “emerging growth company” and thus, has elected to adhere to the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance related to reference rate reform, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference LIBOR and are affected by reference rate reform. The Company adopted the standard effective March 31, 2020 and elected the expedient to prospectively adjust the effective interest rate when LIBOR is replaced. We do not expect this standard to have a material impact on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued authoritative guidance regarding the accounting for leases, and has since issued subsequent updates to the initial guidance. The amended guidance requires the recognition of assets and liabilities for operating leases. The standard was initially effective for annual and interim reporting periods beginning after December 15, 2019. However, in November 2019, the FASB issued amended guidance, which defers the effective date for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. The standard must be adopted using a modified retrospective transition. We plan to elect the following practical expedients: (1) not to reassess our prior conclusions regarding lease identification, lease classification and initial direct costs; and (2) the short term practical expedient for any leases with an initial term of 12 months or less and not recognize right-of-use assets or lease liabilities for those leases. The Company is currently evaluating all the impacts of adopting the new standard and expects the adoption of this standard to have a material impact on the Company’s consolidated balance sheet and related disclosures. In August 2018, the FASB issued authoritative guidance regarding customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. These amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance is effective for fiscal periods beginning after December 15, 2020. We are currently evaluating the potential impact on our consolidated financial statements. In June 2016, the FASB issued authoritative guidance on accounting for credit losses on financial instruments, including trade receivables, and has since issued subsequent updates to the initial guidance. The amended guidance requires the application of a current expected credit loss model, which measures credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires adoption using a modified retrospective approach and was effective for annual periods beginning after December 15, 2019. However, in November 2019, the FASB issued amended guidance, which defers the effective date for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. We are currently evaluating the potential impact on our consolidated financial statements, including our disclosures
Revenue	The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed. The Company has organized its operations into three reportable segments: Brand Direct, Marketplace and Other. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Other reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts.
Fair value measurement	The fair value of the contingent consideration was determined using a Monte Carlo fair value analysis based on estimated performance and the probability of achieving certain targets. As certain inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. During the nine months ended September 30, 2020, we paid this contingent consideration of $1.0 million.

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

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+ Details

- Definition

Disclosure of accounting policy for revenue from contract with customer.

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+ Details

REVENUE (Tables)

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands):


	Brand Direct		Marketplace		Other		Corporate and other		Total
Three Months Ended September 30, 2020
Net revenue:
Customer acquisition	$	43,921	$	39,541	$	—	$	(8,755)	$	74,707
Managed services	5,247		—		2,045		—		7,292
Software services	—		—		830		—		830
Total Net revenue	$	49,168	$	39,541	$	2,875	$	(8,755)	$	82,829
Three Months Ended September 30, 2019
Net revenue:
Customer acquisition	$	41,330	$	15,542	$	—	$	(3,796)	$	53,076
Managed services	3,147		—		562		—		3,709
Software services	—		—		790		—		790
Total Net revenue	$	44,477	$	15,542	$	1,352	$	(3,796)	$	57,575


	Brand Direct		Marketplace		Other		Corporate and other		Total
Nine Months Ended September 30, 2020
Net revenue:
Customer acquisition	$	122,557	$	108,937	$	—	$	(19,001)	$	212,493
Managed services	12,885		—		2,945		—		15,830
Software services	—		—		2,430		—		2,430
Total Net revenue	$	135,442	$	108,937	$	5,375	$	(19,001)	$	230,753
Nine Months Ended September 30, 2019
Net revenue:
Customer acquisition	$	124,173	$	47,116	$	—	$	(12,517)	$	158,772
Managed services	10,054		—		1,973		—		12,027
Software services	—		—		2,343		—		2,343
Total Net revenue	$	134,227	$	47,116	$	4,316	$	(12,517)	$	173,142

REPORTABLE SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables are a reconciliation of the operations of our segments to income from operations (in thousands):


	Three Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	49,168	$	39,541	$	2,875	$	(8,755)	$	82,829
Cost of revenue	37,828		27,661		1,043		(8,755)		57,777
Gross profit	$	11,340	$	11,880	$	1,832	$	—	$	25,052
Salaries and related costs									7,882
General and administrative expenses									6,407
Acquisition costs									3,248
Depreciation and amortization									4,636
Income from operations									$	2,879


	Three Months Ended September 30, 2019
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	44,477	$	15,542	$	1,352	$	(3,796)	$	57,575
Cost of revenue	33,499		9,366		32		(3,796)		39,101
Gross profit	$	10,978	$	6,176	$	1,320	$	—	$	18,474
Salaries and related costs									6,599
General and administrative expenses									4,479
Acquisition costs									11,707
Depreciation and amortization									2,201
Loss from operations									$	(6,512)


	Nine Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	135,442	$	108,937	$	5,375	$	(19,001)	$	230,753
Cost of revenue	103,125		75,101		1,113		(19,001)		160,338
Gross profit	$	32,317	$	33,836	$	4,262	$	—	$	70,415
Salaries and related costs									24,114
General and administrative expenses									16,356
Acquisition costs									3,322
Depreciation and amortization									13,307
Income from operations									$	13,316


	Nine Months Ended September 30, 2019
	Brand Direct		Marketplace		Other		Corporate and Other		Total
Net revenue	$	134,227	$	47,116	$	4,316	$	(12,517)	$	173,142
Cost of revenue	100,171		29,345		85		(12,517)		117,084
Gross profit	$	34,056	$	17,771	$	4,231	$	—	$	56,058
Salaries and related costs									20,495
General and administrative expenses									13,514
Acquisition costs									17,492
Depreciation and amortization									6,165
Loss from operations									$	(1,608)

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Changes in the carrying value of goodwill, by reporting segment, were as follows (in thousands):


	Brand Direct		Marketplace		Other		Total
Balance, December 31, 2019	$	8,616	$	32,660	$	550	$	41,826
Additions (Note 7)	—		—		2,542		2,542
Balance, September 30, 2020	$	8,616	$	32,660	$	3,092	$	44,368

Schedule of Finite-Lived Intangible Assets

Finite-lived intangible assets consisted of the following (in thousands):


		September 30, 2020						December 31, 2019
	Amortization Period (Years)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Intangible assets subject to amortization:
Technology	3 to 5	$	47,946	$	(17,827)	$	30,119	$	47,946	$	(9,751)	$	38,195
Customer relationships	1 to 12	22,383		(5,127)		17,256		19,583		(3,078)		16,505
Brand	1 to 5	4,459		(2,571)		1,888		4,187		(2,556)		1,631
Non-competition agreements	3	1,815		(803)		1,012		1,815		(211)		1,604
Total		$	76,603	$	(26,328)	$	50,275	$	73,531	$	(15,596)	$	57,935

DEBT (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following table presents the components of outstanding debt (in thousands):


	September 30, 2020		December 31, 2019
Term loan	$	191,514	$	194,810
Revolving credit facility	4,000		5,000
Delayed draw term loan	8,301		8,429
Total debt	203,815		208,239
Unamortized debt issuance costs	(2,606)		(3,041)
Debt, net	201,209		205,198
Current portion of long-term debt	(4,150)		(4,150)
Long-term debt	$	197,059	$	201,048

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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+ Details

ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands):


	July 16, 2020
Goodwill	$	2,542

Brand	272

Customer relationships	2,800
Accounts receivable	833
Other assets acquired	30
Liabilities assumed	(678)

Net assets acquired	$	5,799

The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands):


	November 1, 2019
Goodwill	$	29,723
Technology	26,000
Brand	690
Non-competition agreements	1,520
Customer relationships	10,300
Other assets acquired	6,393
Liabilities assumed	(9,045)
Deferred tax liability	(8,961)
Net assets acquired	$	56,620

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following table presents assets and liabilities measured at fair value on a recurring basis (in thousands):


		December 31, 2019
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Contingent consideration	Contingent consideration payable	$	—	$	—	$	1,000	$	1,000
Total		$	—	$	—	$	1,000	$	1,000

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table represents the change in the contingent consideration (in thousands):


	Level 3
December 31, 2019	$	1,000
Additions	—
Changes in fair value	—
Settlements	(1,000)
September 30, 2020	$	—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

EQUITY (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of Stockholders Equity

The following table sets forth the economic and voting interests of the Company’s common stockholders as of September 30, 2020:


Class	Total Shares (1)	Economic Ownership in DMSH (2)		Economic Ownership in DMS Inc. (3)		Voting Ownership in DMS Inc. (4)
Class A Common Stock	32,293,793	55.2	%	100.0	%	55.5	%
Class B Common Stock	25,857,070	44.2	%	—	%	44.5	%

(1) Represents the total number of outstanding shares for each class of DMS Inc. common stock as of September 30, 2020.
(2) Represents (i) the Class A Common Stock holders’ indirect economic interest in DMSH through their ownership of Class A Common Stock and (ii) the Class B Common Stock holders’ direct economic interest in DMSH through their ownership of DMSH Units. The remaining economic ownership is held by the sellers in SmarterChaos acquisition.
(3) Represents the aggregate economic interest in the DMS Inc. through the stockholders' ownership of Class A Common Stock.
(4) Represents the aggregate voting interest in the DMS Inc. through the stockholders' ownership of Company common stock.

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Lessee, Operating Lease, Liability, Maturity

At September 30, 2020, the future minimum lease payments for the Company were comprised of the following (in thousands):


Year Ending December 31:
2020	$	595
2021	2,040
2022	1,941
2023	1,806
2024	1,304
Thereafter	425
Total	$	8,111

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Numerator:
Net (loss) income	$	(2,178)	$	713
Less: Net loss attributable to DMSH prior to the Business Combination	(4,236)		(1,345)
Less: Net income attributable to noncontrolling interests subsequent to the Business Combination	921		921
Net income attributable to DMS Inc.	$	1,137	$	1,137
Denominator:
Weighted-average shares of Class A Common Stock outstanding - basic and diluted	32,294		32,294

Earnings per share of Class A Common Stock - basic and diluted	$	0.04	$	0.04

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - DMSH	Sep. 30, 2020	Jul. 15, 2020
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity method investment, ownership percentage	55.50%	55.20%
Prism and Clairvest Direct Seller
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners	44.50%	44.50%

BUSINESS COMBINATION (Details) $ in Thousands			3 Months Ended	4 Months Ended	9 Months Ended
BUSINESS COMBINATION (Details) $ in Thousands	Oct. 22, 2020 shares	Jul. 15, 2020 USD ($) shares	Sep. 30, 2020 USD ($) shares	Apr. 22, 2020 USD ($) shares	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Jul. 17, 2020 shares	Dec. 31, 2019 USD ($)
Business Acquisition [Line Items]
Payments to acquire business \| $					$ 2,799	$ 0
Repayments of debt \| $					$ 3,423	$ 1,739
Unit redemption rights ratio			1		1
Tax receivable agreement liability, noncurrent \| $			$ 15,174		$ 15,174			$ 0
Additional paid-in capital \| $			$ (43,145)		$ (43,145)			$ 0
Warrants outstanding (in shares)			13,999,998		13,999,998
Blocker Corp
Business Acquisition [Line Items]
Payments to acquire business \| $		$ 57,300
Cash acquired from acquisition \| $		$ 30,000
Unit redemption rights ratio		1
Leo
Business Acquisition [Line Items]
Warrants issued (in shares)		2.0
Class A Common Stock
Business Acquisition [Line Items]
Voting ownership in the company		55.50%
Economic ownership in company			100.00%		100.00%
Common stock outstanding (in shares)			32,293,793		32,293,793
Class A Common Stock \| Blocker Corp
Business Acquisition [Line Items]
Warrants issued (in shares)		2,000,000.0
Class A Common Stock \| Leo \| IPO
Business Acquisition [Line Items]
Warrants issued (in shares)		10,000,000.0
Class B Common Stock
Business Acquisition [Line Items]
Voting ownership in the company		44.50%
Economic ownership in company			0.00%		0.00%
Common stock outstanding (in shares)			25,857,070		25,857,070
Class B Common Stock \| Blocker Corp
Business Acquisition [Line Items]
Shares issued (in shares)		25,857,070
Class C common stock
Business Acquisition [Line Items]
Common stock outstanding (in shares)			0		0		0
Class C common stock \| Blocker Corp
Business Acquisition [Line Items]
Shares issued (in shares)		17,937,954
Blocker Corp
Business Acquisition [Line Items]
Deferred tax asset \| $			$ 18,400		$ 18,400
Tax receivable agreement liability, noncurrent \| $			15,700		15,700
Additional paid-in capital \| $			2,800		$ 2,800
Acquisition costs \| $			$ 2,400
Line of Credit \| DMSH
Business Acquisition [Line Items]
Repayments of debt \| $		$ 10,000
PIPE Investors \| Class A Common Stock
Business Acquisition [Line Items]
Common stock, subscribed (in shares)				10,424,282
Sale of stock consideration received \| $				$ 100,000
Blocker Corp
Business Acquisition [Line Items]
Other ownership interests, units outstanding (in shares)		32,293,793
Blocker Corp \| Class A Common Stock \| Subsequent Event
Business Acquisition [Line Items]
Shares issued (in shares)	98,783
Prism and Clairvest Direct Seller \| DMS
Business Acquisition [Line Items]
Voting ownership in the company			44.00%		44.00%
Prism and Clairvest Direct Seller \| DMSH
Business Acquisition [Line Items]
Economic ownership in company			44.00%		44.00%
Prism and Clairvest Direct Seller \| DMSH \| Subsequent Event
Business Acquisition [Line Items]
Shares issued (in shares)	142,394
Prism and Clairvest Direct Seller \| Class B Common Stock
Business Acquisition [Line Items]
Other ownership interests, units outstanding (in shares)		25,857,070
Prism and Clairvest Direct Seller \| Class B Common Stock \| Subsequent Event
Business Acquisition [Line Items]
Shares issued (in shares)	142,394

REVENUE - Narrative (Details) $ in Thousands	9 Months Ended
REVENUE - Narrative (Details) $ in Thousands	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Revenue from Contract with Customer [Abstract]
Number of reportable segments \| segment	3
Contract with customer, liability	$ 400		$ 1,200
Contract with customer, liability, revenue recognized	1,200	$ 1,300
Contract with customer, receivable, net	$ 2,000		$ 800

REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
REVENUE (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Net revenue	$ 82,829	$ 57,575	$ 230,753	$ 173,142
Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	49,168	44,477	135,442	134,227
Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	39,541	15,542	108,937	47,116
Other
Disaggregation of Revenue [Line Items]
Net revenue	2,875	1,352	5,375	4,316
Corporate and other
Disaggregation of Revenue [Line Items]
Net revenue	(8,755)	(3,796)	(19,001)	(12,517)
Customer acquisition
Disaggregation of Revenue [Line Items]
Net revenue	74,707	53,076	212,493	158,772
Customer acquisition \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	43,921	41,330	122,557	124,173
Customer acquisition \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	39,541	15,542	108,937	47,116
Customer acquisition \| Other
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Customer acquisition \| Corporate and other
Disaggregation of Revenue [Line Items]
Net revenue	(8,755)	(3,796)	(19,001)	(12,517)
Managed services
Disaggregation of Revenue [Line Items]
Net revenue	7,292	3,709	15,830	12,027
Managed services \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	5,247	3,147	12,885	10,054
Managed services \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Managed services \| Other
Disaggregation of Revenue [Line Items]
Net revenue	2,045	562	2,945	1,973
Managed services \| Corporate and other
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Software services
Disaggregation of Revenue [Line Items]
Net revenue	830	790	2,430	2,343
Software services \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Software services \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Software services \| Other
Disaggregation of Revenue [Line Items]
Net revenue	830	790	2,430	2,343
Software services \| Corporate and other
Disaggregation of Revenue [Line Items]
Net revenue	$ 0	$ 0	$ 0	$ 0

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Net revenue	$ 82,829	$ 57,575	$ 230,753	$ 173,142
Cost of revenue	57,777	39,101	160,338	117,084
Gross profit	25,052	18,474	70,415	56,058
Salaries and related costs	7,882	6,599	24,114	20,495
General and administrative expenses	6,407	4,479	16,356	13,514
Acquisition costs	3,248	11,707	3,322	17,492
Depreciation and amortization	4,636	2,201	13,307	6,165
Income (loss) from operations	2,879	(6,512)	13,316	(1,608)
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Net revenue	(8,755)	(3,796)	(19,001)	(12,517)
Cost of revenue	(8,755)	(3,796)	(19,001)	(12,517)
Gross profit	0	0	0	0
Brand Direct
Segment Reporting Information [Line Items]
Net revenue	49,168	44,477	135,442	134,227
Brand Direct \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	49,168	44,477	135,442	134,227
Cost of revenue	37,828	33,499	103,125	100,171
Gross profit	11,340	10,978	32,317	34,056
Marketplace
Segment Reporting Information [Line Items]
Net revenue	39,541	15,542	108,937	47,116
Marketplace \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	39,541	15,542	108,937	47,116
Cost of revenue	27,661	9,366	75,101	29,345
Gross profit	11,880	6,176	33,836	17,771
Other
Segment Reporting Information [Line Items]
Net revenue	2,875	1,352	5,375	4,316
Other \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	2,875	1,352	5,375	4,316
Cost of revenue	1,043	32	1,113	85
Gross profit	$ 1,832	$ 1,320	$ 4,262	$ 4,231

GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Goodwill [Roll Forward]
Balance, December 31, 2019	$ 41,826
Additions (Note 7)	2,542
Balance, September 30, 2020	44,368
Brand Direct \| Operating Segments
Goodwill [Roll Forward]
Balance, December 31, 2019	8,616
Additions (Note 7)	0
Balance, September 30, 2020	8,616
Marketplace \| Operating Segments
Goodwill [Roll Forward]
Balance, December 31, 2019	32,660
Additions (Note 7)	0
Balance, September 30, 2020	32,660
Other \| Operating Segments
Goodwill [Roll Forward]
Balance, December 31, 2019	550
Additions (Note 7)	2,542
Balance, September 30, 2020	$ 3,092

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 10,700,000	$ 5,000,000.0
Goodwill, Impaired, Accumulated Impairment Loss	$ 0		$ 0

GOODWILL AND INTANGIBLE ASSETS - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Gross	$ 76,603	$ 73,531
Accumulated Amortization	(26,328)	(15,596)
Net	50,275	57,935
Technology
Finite-Lived Intangible Assets [Line Items]
Gross	47,946	47,946
Accumulated Amortization	(17,827)	(9,751)
Net	$ 30,119	38,195
Technology \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years
Technology \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross	$ 22,383	19,583
Accumulated Amortization	(5,127)	(3,078)
Net	$ 17,256	16,505
Customer relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life	1 year
Customer relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life	12 years
Brand
Finite-Lived Intangible Assets [Line Items]
Gross	$ 4,459	4,187
Accumulated Amortization	(2,571)	(2,556)
Net	$ 1,888	1,631
Brand \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life	1 year
Brand \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years
Non-competition agreements
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years
Gross	$ 1,815	1,815
Accumulated Amortization	(803)	(211)
Net	$ 1,012	$ 1,604

DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Debt	$ 203,815	$ 208,239
Unamortized debt issuance costs	(2,606)	(3,041)
Debt, net	201,209	205,198
Current portion of long-term debt	(4,150)	(4,150)
Long-term debt	197,059	201,048
Term loan
Debt Instrument [Line Items]
Debt	191,514	194,810
Revolving credit facility
Debt Instrument [Line Items]
Debt	4,000	5,000
Delayed draw term loan
Debt Instrument [Line Items]
Debt	$ 8,301	$ 8,429

DEBT - Narrative (Details) - Monroe Facility - USD ($)	12 Months Ended
DEBT - Narrative (Details) - Monroe Facility - USD ($)	Dec. 31, 2019	Sep. 30, 2020
Revolving credit facility
Debt Instrument [Line Items]
Increase to borrowing capacity	$ 2,500,000	$ 15,000,000.0
Line of Credit
Debt Instrument [Line Items]
Line of credit facility increase	99,000,000.0
Debt instrument, face amount	199,000,000.0
Amended Capacity, Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount	$ 221,500,000
Effective rate	6.80%

ACQUISITIONS - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands			3 Months Ended						9 Months Ended
	Jul. 16, 2020	Nov. 01, 2019	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	Jul. 15, 2020
Business Acquisition [Line Items]
Net income (loss)			$ (2,178)	$ 2,134	$ 757	$ (9,492)	$ (111)	$ 606	$ 713	$ (8,997)
SmarterChaos
Business Acquisition [Line Items]
Payments to acquire business	$ 5,800
Acquisition costs			400
Revenues			1,500
Net income (loss)			$ 100
SmarterChaos \| DMSH
Business Acquisition [Line Items]
Equity issued to acquiree (in shares)	307
Value of equity issued											$ 3,000
SmarterChaos \| Brand
Business Acquisition [Line Items]
Useful life									3 years
SmarterChaos \| Customer relationships
Business Acquisition [Line Items]
Useful life									5 years
UE Authority, Co.
Business Acquisition [Line Items]
Payments to acquire business		$ 56,600
UE Authority, Co. \| Brand
Business Acquisition [Line Items]
Useful life		1 year
UE Authority, Co. \| Customer relationships
Business Acquisition [Line Items]
Useful life		9 years
UE Authority, Co. \| Technology
Business Acquisition [Line Items]
Useful life		5 years
UE Authority, Co. \| Non-competition agreements
Business Acquisition [Line Items]
Useful life		3 years

ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jul. 16, 2020	Dec. 31, 2019	Nov. 01, 2019
Business Acquisition [Line Items]
Goodwill	$ 44,368		$ 41,826
SmarterChaos
Business Acquisition [Line Items]
Goodwill		$ 2,542
Other assets acquired		30
Liabilities assumed		(678)
Net assets acquired		5,799
SmarterChaos \| Brand
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		272
SmarterChaos \| Customer relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		2,800
Accounts receivable		$ 833
UE Authority, Co.
Business Acquisition [Line Items]
Goodwill				$ 29,723
Other assets acquired				6,393
Liabilities assumed				(9,045)
Deferred tax liability				(8,961)
Net assets acquired				56,620
UE Authority, Co. \| Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired				26,000
UE Authority, Co. \| Brand
Business Acquisition [Line Items]
Finite-lived intangible assets acquired				690
UE Authority, Co. \| Non-competition agreements
Business Acquisition [Line Items]
Finite-lived intangible assets acquired				1,520
UE Authority, Co. \| Customer relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired				$ 10,300

FAIR VALUE MEASUREMENTS - Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring $ in Thousands	Dec. 31, 2019 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ 1,000
Total	1,000
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0
Total	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	0
Total	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	1,000
Total	$ 1,000

FAIR VALUE MEASUREMENTS - Level 3 Reconciliation (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 1,000
Additions	0
Changes in fair value	0
Settlements	(1,000)
Ending balance	$ 0

EQUITY - Authorized Capitalization (Details) - $ / shares	Sep. 30, 2020	Jul. 17, 2020
Class of Stock [Line Items]
Common stock authorized (in shares)	600,000,000
Common stock par value (usd per share)	$ 0.0001
Preferred stock, authorized (in shares)	100,000,000
Preferred stock par value (usd per share)	$ 0.0001
Class A Common Stock
Class of Stock [Line Items]
Common stock authorized (in shares)	500,000,000
Common stock par value (usd per share)	$ 0.0001
Common stock outstanding (in shares)	32,293,793
Class B Common Stock
Class of Stock [Line Items]
Common stock authorized (in shares)	60,000,000
Common stock par value (usd per share)	$ 0.0001
Common stock outstanding (in shares)	25,857,070
Class C common stock
Class of Stock [Line Items]
Common stock authorized (in shares)	40,000,000
Common stock par value (usd per share)	$ 0.0001
Common stock outstanding (in shares)	0	0

EQUITY - Company Common Stock (Details) - shares	Sep. 30, 2020	Jul. 15, 2020
Class A Common Stock
Class of Stock [Line Items]
Common stock outstanding (in shares)	32,293,793
Economic Ownership in DMSH	55.20%
Economic Ownership in the Company	100.00%
Company Stock, Voting Ownership		55.50%
Class B Common Stock
Class of Stock [Line Items]
Common stock outstanding (in shares)	25,857,070
Economic Ownership in DMSH	44.20%
Economic Ownership in the Company	0.00%
Company Stock, Voting Ownership		44.50%

EQUITY - Voting Rights, Dividend Rights, Conversion of Company Class C Common Stock, Preferred Stock (Details)	9 Months Ended
	Sep. 30, 2020 votingRight shares	Jul. 17, 2020 shares
Equity [Abstract]
Voting rights per each share \| votingRight	1
Class of Stock [Line Items]
Preferred stock outstanding (in shares)	0
Class C common stock
Class of Stock [Line Items]
Common stock outstanding (in shares)	0	0
Equity conversion ratio	1

EQUITY - Warrants (Details)	Sep. 30, 2020 $ / shares shares
Class of Warrant or Right [Line Items]
Warrant exercise price (usd per share)	$ 0.01
Warrants, term	5 years
Warrants outstanding (in shares) \| shares	13,999,998
Class A Common Stock
Class of Warrant or Right [Line Items]
Share price (usd per share)	$ 18.00
Class A Common Stock
Class of Warrant or Right [Line Items]
Warrant exercise price (usd per share)	$ 11.50

EQUITY - Noncontrolling Interest (Details) - shares shares in Thousands	Jul. 16, 2020	Sep. 30, 2020	Jul. 15, 2020
SmarterChaos \| DMSH
Noncontrolling Interest [Line Items]
Equity issued to acquiree (in shares)	307
DMSH \| Prism and Clairvest Direct Seller
Noncontrolling Interest [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners		44.50%	44.50%
DMS \| Prism, Clairvest Direct Seller, SmarterChaos
Noncontrolling Interest [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners	44.80%

RELATED PARTY TRANSACTIONS - Registration Rights (Details)	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2017 USD ($) takedown
Related Party Transactions [Abstract]
Shelf takedown, aggregate minimum amount \| $		$ 20,000,000.0
Shelf takedown, maximum number \| takedown		4
Shelf takedown, period per incident	6 months

RELATED PARTY TRANSACTIONS - Amended Partnership Agreement (Details) - Non-Blocker Members - Amended Partnership Agreement	9 Months Ended
	Sep. 30, 2020 shares
Related Party Transaction [Line Items]
Equity conversion ratio	1
Conversion, minimum units (in shares)	10,000

RELATED PARTY TRANSACTIONS - Tax Receivable Agreement (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Tax receivable agreement liability, noncurrent	$ 15,174	$ 0
Additional paid-in capital	(43,145)	$ 0
Blocker Corp
Related Party Transaction [Line Items]
Deferred tax asset	18,400
Tax receivable agreement liability, noncurrent	15,700
Additional paid-in capital	2,800
Due to related parties	15,700
Due to related parties, current	$ 500

RELATED PARTY TRANSACTIONS - Lock-Up Agreement (Details) - Lock-Up Agreement	Jul. 29, 2020 shares
Chief Executive Officer
Related Party Transaction [Line Items]
Warrants transferred (in shares)	538,912
Chief Operating Officer
Related Party Transaction [Line Items]
Warrants transferred (in shares)	538,911

RELATED PARTY TRANSACTIONS - Management Agreement (Details) - Management and Advisory Services - Management - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Related Party Transaction [Line Items]
Quarterly retainer to related party	$ 50
General and administrative, related party expenses	$ 100	$ 200

RELATED PARTY TRANSACTIONS - DMSH Member Tax Distributions (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Related Party Transactions [Abstract]
Tax distributions to members	$ 200	$ 21,600

BENEFIT PLANS (Details) - USD ($) $ in Thousands		3 Months Ended
BENEFIT PLANS (Details) - USD ($) $ in Thousands	Apr. 23, 2020	Sep. 30, 2020	Jul. 15, 2020	Nov. 01, 2019	Jan. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity value of plan				$ 325,000	$ 100,000
Payments to employee incentive plan participants	$ 250
2020 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capital shares reserved for future issuance (in shares)			11,600,000
Shares issued (in shares)		0

COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Lease cost	$ 1,900	$ 1,500
Lessee, Lease, Description [Line Items]
Lease reserve	$ 1,000
Unit redemption rights ratio	1
Accounts Payable and Accrued Liabilities
Lessee, Lease, Description [Line Items]
Lease reserve	$ 900
Other Noncurrent Liabilities
Lessee, Lease, Description [Line Items]
Lease reserve	$ 100

COMMITMENTS AND CONTINGENCIES - Lease Liability (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2020	$ 595
2021	2,040
2022	1,941
2023	1,806
2024	1,304
Thereafter	425
Total	$ 8,111

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jul. 15, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Income tax expense	$ 1,636	$ 0	$ 1,901	$ 0
Effective tax rate	74.20%		74.20%
Tax receivable agreement liability, noncurrent	$ 15,174		$ 15,174			$ 0
Additional paid-in capital	$ (43,145)		$ (43,145)			$ 0
DMSH
Related Party Transaction [Line Items]
Equity method investment, ownership percentage	55.50%		55.50%		55.20%
Blocker Corp
Related Party Transaction [Line Items]
Deferred tax asset	$ 18,400		$ 18,400
Tax receivable agreement liability, noncurrent	15,700		15,700
Additional paid-in capital	2,800		2,800
Due to related parties	15,700		15,700
Due to related parties, current	$ 500		$ 500

EARNINGS PER SHARE - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net (loss) income	$ (2,178)	$ 2,134	$ 757	$ (9,492)	$ (111)	$ 606	$ 713	$ (8,997)
Less: Net loss attributable to DMSH prior to the Business Combination	(4,236)						(1,345)
Less: Net income attributable to noncontrolling interests subsequent to the Business Combination	921						921
Net income (loss) attributable to Digital Media Solutions, Inc.	$ 1,137			$ (9,492)			$ 1,137	$ (8,997)
Weighted-average shares outstanding - basic and diluted (in shares)	32,294,000						32,294,000
Basic and diluted (usd per share)	$ 0.04						$ 0.04
Class A Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average shares outstanding - basic and diluted (in shares)	32,294,000						32,294,000
Basic and diluted (usd per share)	$ 0.04						$ 0.04

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

+ Details

EARNINGS PER SHARE - Narrative (Details) - shares	Oct. 28, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Warrants outstanding (in shares)		13,999,998
Subsequent Event
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Stock options granted (in shares)	600,000
Restricted Stock Units (RSUs) \| Subsequent Event
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Shares granted (in shares)	1,200,000
Class B Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common stock outstanding (in shares)		25,857,070
Class B Common Stock \| Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common stock outstanding (in shares)		25,857,000	0	0	0	0	0	0	0