0001725134-21-000202 | 10-Q | XBRL Viewer | Digital Media Solutions INC

Ending balance (in shares) at Mar. 31, 2020

757,000

Member distributions

(170,000)

Ending balance at Mar. 31, 2020

(105,671,000)

$ 0

(105,671,000)

Beginning balance (in shares) at Dec. 31, 2019

Beginning balance at Dec. 31, 2019

(106,258,000)

$ 0

(106,258,000)

Ending balance (in shares) at Sep. 30, 2020

4,153,000

32,294

25,857

Ending balance at Sep. 30, 2020

(80,070,000)

(43,025,000)

$ 3,000

(50,271,000)

7,240,000

(37,045,000)

Beginning balance (in shares) at Mar. 31, 2020

Beginning balance at Mar. 31, 2020

(105,671,000)

$ 0

(105,671,000)

Ending balance (in shares) at Jun. 30, 2020

2,134,000

Ending balance at Jun. 30, 2020

(103,537,000)

$ 0

(103,537,000)

Shares issued in connection with acquisition

1,262,000

3,036,000

2,462,000

(4,236,000)

3,000,000

1,861,000

1,139,000

Exercise of warrants to issue Class A common stock (in shares)

^[1]

32,294

25,857

Exercise of warrants to issue Class A common stock

^[1]

19,205,000

(47,922,000)

$ 3,000

(52,132,000)

4,204,000

(40,646,000)

107,773,000

Ending balance (in shares) at Sep. 30, 2020

32,294

25,857

Ending balance at Sep. 30, 2020

(80,070,000)

(43,025,000)

$ 3,000

(50,271,000)

7,240,000

(37,045,000)

Beginning balance (in shares) at Dec. 31, 2020

32,393

25,999

Beginning balance at Dec. 31, 2020

(95,685,000)

(51,167,000)

$ 3,000

(48,027,000)

(3,146,000)

(44,518,000)

Shares issued in connection with acquisition (in shares)

(212,000)

(119,000)

(93,000)

1,293

Shares issued in connection with acquisition

15,000,000

9,384,000

5,616,000

Exercise of warrants to issue Class A common stock (in shares)

Exercise of warrants to issue Class A common stock

17,000

Stock-based compensation

1,365,000

Other

(21,000)

Ending balance (in shares) at Mar. 31, 2021

33,687

25,999

Ending balance at Mar. 31, 2021

(79,536,000)

(40,520,000)

$ 3,000

(37,261,000)

(3,265,000)

(39,016,000)

Beginning balance (in shares) at Dec. 31, 2020

32,393

25,999

Beginning balance at Dec. 31, 2020

(95,685,000)

(51,167,000)

$ 3,000

(48,027,000)

(3,146,000)

(44,518,000)

Units/shares redeemed and issued to Class A Common Stock (in shares)

154,000

Units/shares redeemed and issued to Class A Common Stock

$ 3,000,000

Ending balance (in shares) at Jun. 30, 2021

35,818

25,699

Ending balance at Jun. 30, 2021

(52,907,000)

(28,373,000)

$ 3,000

(27,642,000)

(737,000)

(24,534,000)

Beginning balance (in shares) at Dec. 31, 2020

32,393

25,999

Beginning balance at Dec. 31, 2020

(95,685,000)

(51,167,000)

$ 3,000

(48,027,000)

(3,146,000)

(44,518,000)

Ending balance (in shares) at Sep. 30, 2021

10,121,000

36,168,000

25,699,000

36,168

25,699

Ending balance at Sep. 30, 2021

(46,246,000)

(24,911,000)

$ 4,000

$ 3,000

(27,717,000)

2,799,000

(21,335,000)

Beginning balance (in shares) at Mar. 31, 2021

33,687

25,999

Beginning balance at Mar. 31, 2021

(79,536,000)

(40,520,000)

$ 3,000

(37,261,000)

(3,265,000)

(39,016,000)

Shares issued in connection with acquisition (in shares)

4,939,000

2,528,000

2,411,000

1,595

Shares issued in connection with acquisition

19,823,000

11,513,000

8,310,000

Units/shares redeemed and issued to Class A Common Stock (in shares)

300

154

Units/shares redeemed and issued to Class A Common Stock

$ 192,000

$ 392,000

^[2]

$ 192,000

$ 392,000

$ (300)

$ 192,000

$ 392,000

Directors and employee vested units redeemed (in shares)

Stock-based compensation

1,394,000

Impact of transactions affecting non-controlling interest

^[3]

(3,788,000)

3,788,000

Other

^[4]

(111,000)

(84,000)

(27,000)

Ending balance (in shares) at Jun. 30, 2021

35,818

25,699

Ending balance at Jun. 30, 2021

(52,907,000)

(28,373,000)

$ 3,000

(27,642,000)

(737,000)

(24,534,000)

Directors and employee vested units redeemed (in shares)

5,394,000

3,536,000

1,858,000

350

Stock-based compensation

1,583,000

Impact of transactions affecting non-controlling interest

^[3]

(1,416,000)

1,416,000

Correction of Business Combination Tax Receivable Agreement

(322,000)

Other

^[4]

5,000

80,000

(75,000)

Ending balance (in shares) at Sep. 30, 2021

36,168,000

25,699,000

36,168

25,699

Ending balance at Sep. 30, 2021

$ (46,246,000)

$ (24,911,000)

$ 4,000

$ 3,000

$ (27,717,000)

$ 2,799,000

$ (21,335,000)

$ 0

[1]	The restatement impact on the Company’s Proceeds in the Business Combination and Net income has changed by the fair value of Private Placement Warrant liabilities in Additional Paid-in Capital of $7.1 million, Retained Earnings of $1.9 million and Non-controlling interest of $4.2 million.
[2]	On June 30, 2021, the sellers of SmarterChaos redeemed approximately one-half of their non-controlling interest held through DMSH Units in exchange for Class A Common Stock in DMS Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption.
[3]	The carrying amount of non-controlling interest was adjusted primarily to reflect the change in ownership interest caused by additional controlling shares contributed as a result of the Crisp acquisition and non-controlling redemptions by Prism and the Sellers of SmarterChaos.
[4]	Includes costs associated with the issuance of equity shares, other distribution costs, and other tax adjustments associated with the Tax Receivable Agreement

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Amount of noncontrolling interest redeemed	50.00%
Stockholders' equity	$ (46,246)	$ (80,070)
Additional Paid-in Capital
Stockholders' equity	(27,717)	(50,271)
Retained Earnings
Stockholders' equity	2,799	7,240
Non- controlling Interest
Stockholders' equity	$ (21,335)	(37,045)
Revision of Prior Period, Adjustment \| Additional Paid-in Capital
Stockholders' equity		(7,100)
Revision of Prior Period, Adjustment \| Retained Earnings
Stockholders' equity		1,900
Revision of Prior Period, Adjustment \| Non- controlling Interest
Stockholders' equity		$ (4,200)

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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Revenue from Contract with Customer [Abstract]

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net income	$ 10,121	$ 4,153
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	19,649	13,307
Lease restructuring charges	(81)	0
Debt extinguishment	2,108	0
Provision for bad debt	1,384	800
Stock-based compensation, net of amounts capitalized	3,976	0
Payment of contingent consideration	0	(1,000)
Amortization of debt issuance costs	1,006	699
Deferred income tax provision, net	(856)	(1,261)
Other	0	400
Change in fair value of contingent consideration	(2,525)	0
Change in fair value of warrant liabilities	(13,835)	(3,840)
Change in income tax receivable and payable	(728)	0
Change in accounts receivable	(7,324)	(8,486)
Change in prepaid expenses and other current assets	(2,121)	(495)
Change in accounts payable and accrued expenses	(2,367)	3,210
Change in other liabilities	(516)	(136)
Net cash provided by operating activities	7,891	7,351
Cash flows from investing activities
Additions to property and equipment	(7,875)	(7,481)
Acquisition of businesses, net of cash acquired	(24,830)	(2,799)
Net cash used in investing activities	(32,705)	(10,280)
Cash flows from financing activities
Proceeds from Business Combination	0	29,278
Proceeds from issuance of long-term debt	220,840	0
Payments of long-term debt and notes payable	(200,414)	(3,423)
Proceeds from borrowings on revolving credit facilities	11,000	10,000
Payments of borrowings on revolving credit facilities	(15,000)	(11,000)
Payment of debt issuance costs	(3,565)	(264)
Payment of equity issuance	(475)	0
Payment of early termination	(188)	0
Proceeds from warrants exercised	11	0
Other	(60)	(170)
Net cash provided by financing activities	12,149	24,421
Net change in cash	(12,665)	21,492
Cash, beginning of period	31,397	3,008
Cash, end of period	18,732	24,500
Supplemental Disclosure of Cash Flow Information
Interest	10,908	10,070
Income taxes, net	3,837	1,570
Non-Cash Investing and Financing Transactions:
Contingent and deferred acquisition consideration	11,877	0
Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos	35	3,000
Stock-based compensation capitalized in Internally Developed Software	366	0
Capital expenditures included in accounts payable	$ 550	$ 138

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Allowance for credit loss	$ 4,459	$ 3,121
Preferred stock par value (usd per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized (in shares)	100,000,000	100,000,000
Preferred stock issued (in shares)	0
Preferred stock outstanding (in shares)	0
Class A Common Stock
Common stock par value (usd per share)	$ 0.0001	$ 0.0001
Common stock authorized (in shares)	500,000,000	500,000,000
Common stock issued (in shares)	36,168,000
Common stock outstanding (in shares)	36,168,000
Class B Common Stock
Common stock par value (usd per share)	$ 0.0001	$ 0.0001
Common stock authorized (in shares)	60,000,000	60,000,000
Common stock issued (in shares)	25,999,000
Common stock outstanding (in shares)	25,699,000
Class C common stock
Common stock par value (usd per share)	$ 0.0001	$ 0.0001
Common stock authorized (in shares)	40,000,000	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, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Digital Media Solutions, Inc. (“DMS Inc.”) is a digital 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 Quarterly 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. The Company primarily operates and derives most of its revenues in the United States. Restatement of Previously Issued Financial Statements The notes included herein should be read in conjunction with the Company’s restated audited consolidated financial statements included in the Company’s Annual Report on Form 10-K/A filed with the SEC on May 18, 2021 (the “2020 Form 10-K/A”). As previously disclosed in our 2020 Form 10-K/A, we restated the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2020, as well as each of the impacted quarters within 2020 to make the necessary accounting corrections related to our warrant accounting for the Private Placement warrants. Correction of Tax Receivable Agreement Liability as of Business Combination date Through the completion of the 2020 tax return during the current interim period, we identified an error recorded upon the Business Combination ( “Business Combination” defined below) that resulted in a decrease in the deferred tax asset of $2.1 million, a decrease in the Tax Receivable Agreement liability of $1.8 million and a decrease in Additional Paid-In Capital of $0.3 million, as compared to the amounts recorded in the consolidated balance sheet as of December 31, 2020 and interim periods in the current fiscal year. As the effect of the correction to these accounts was not material to the prior period financial statements, we elected to correct the balance in the current period, with the offset to Additional Paid-In Capital, which was consistent with the method to record the Deferred Tax Asset and Tax Receivable Agreement liability on the date of the Business Combination. There was no impact to continuing operations, net income, or related per-share amounts for each period. Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates. Interim results are not necessarily indicative of the results for a full year. Business Combination As discussed in more detail in our 2020 Form 10-K/A, on July 15, 2020, DMSH consummated the Business Combination with Leo pursuant to the Business Combination Agreement (“Business Combination”). 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 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”) retained approximately 44.5% of the membership interest in DMSH (“non-controlling interests”). For additional information, see Note 2: “Business Combination” in the Notes to Consolidated Financial Statements in our 2020 Form 10-K/A. Non-controlling Interest The non-controlling interest represents the membership interest in Digital Media Solutions Holding (“DMSH”) held by holders other than the Company. As of September 30, 2021, the Prism, Clairvest Direct Sellers and SmarterChaos combined ownership percentage in DMSH was 41.7% and as of December 31, 2020 it was 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. Changes in Accounting Standards and Policies There have been no changes in the significant accounting policies from those that were disclosed in our 2020 Form 10-K/A. Accounting Standards Not Yet Adopted 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 February 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance ASC 842, Lease Accounting, 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 for Emerging Growth Companies (“EGC”) the effective date to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The standard must be adopted using a modified retrospective transition. We plan to adopt the standard using the optional transition method whereby we would apply the new lease requirements through a cumulative-effect adjustment on the effective date of adoption. We plan to elect the package of practical expedients permitted under the transition guidance of the new standards, which allows us to not reassess whether any expired or existing contracts contain leases, allows us to carry forward the historical lease classification and permits us to exclude from our assessment initial direct costs for any existing leases. We will also make an accounting policy election to exclude leases with an initial term of twelve months or less from our transition adjustment. We are currently evaluating the impact on our consolidated balance sheets, recognizing assets and related lease liabilities. 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 is effective for EGC fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact on our consolidated financial statements.

REVENUE

9 Months Ended

Sep. 30, 2021

REVENUE

Disaggregation of Revenue

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


	Three Months Ended September 30, 2021
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total

Net revenue:
Customer acquisition	$	63,332	$	58,278	$	—	$	(18,133)	$	103,477
Managed services	1,667		—		1,471		—		3,138
Software services	—		—		784		—		784
Total Net revenue	$	64,999	$	58,278	$	2,255	$	(18,133)	$	107,399

	Three Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total
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


	Nine Months Ended September 30, 2021
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total

Net revenue:
Customer acquisition	$	174,341	$	165,300	$	—	$	(43,260)	$	296,381
Managed services	6,713		—		3,796		—		10,509
Software services	—		—		2,391		—		2,391
Total Net revenue	$	181,054	$	165,300	$	6,187	$	(43,260)	$	309,281


	Nine Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total
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

Contract balances

As of September 30, 2021 and December 31, 2020, the balance of deferred revenue was $0.9 million and $1.7 million, respectively, and recorded within Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets. We expect the majority of the deferred revenue balance at September 30, 2021 to be recognized as revenue during the following quarter. For the three and nine months ended September 30, 2021, we recognized revenue of $1.2 million and $1.7 million, respectively, that was previously recorded as a contract liability within “Accrued expenses and other current liabilities” on the unaudited condensed consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, unbilled revenue included in accounts receivable was $2.5 million and $1.8 million, respectively. Substantially all amounts included within the unbilled revenue balance are invoiced to customers within the month directly following the period of service.

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.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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REPORTABLE SEGMENTS

9 Months Ended

Sep. 30, 2021

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,				Nine Months Ended September 30,
	2021		2020 As Restated		2021		2020 As Restated

Net revenue	$	107,399	$	82,829	$	309,281	$	230,753
Brand Direct	64,999		49,168		181,054		135,442
Marketplace	58,278		39,541		165,300		108,937
Other	2,255		2,875		6,187		5,375
Intercompany eliminations	(18,133)		(8,755)		(43,260)		(19,001)
Cost of revenue	76,139		57,777		216,680		160,338
Brand Direct	49,815		37,828		136,955		103,125
Marketplace	43,822		27,661		121,477		75,101
Other	635		1,043		1,508		1,113
Intercompany eliminations	(18,133)		(8,755)		(43,260)		(19,001)
Gross profit	$	31,260	$	25,052	$	92,601	$	70,415
Brand Direct	15,184		11,340		44,099		32,317
Marketplace	14,456		11,880		43,823		33,836
Other	1,620		1,832		4,679		4,262
Salaries and related costs	12,449		7,882		34,426		24,114
General and administrative expenses	11,161		6,807		28,675		16,756
Acquisition costs	(2,665)		3,248		(705)		3,322
Depreciation and amortization	7,186		4,636		19,649		13,307
Income from operations	$	3,129	$	2,479	$	10,556	$	12,916

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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Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2021

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, 2020	$	8,616	$	32,660	$	3,628	$	44,904
Additions (Note 6)	4,853		17,370		—		22,223
Balance, September 30, 2021	$	13,469	$	50,030	$	3,628	$	67,127

The carrying amount of goodwill for all reporting units had no accumulated impairments as of September 30, 2021 and December 31, 2020.

Intangible assets, net

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


		September 30, 2021						December 31, 2020
	Amortization Period (Years)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Intangible assets subject to amortization:
Technology	3 to 5	$	58,652	$	(28,818)	$	29,834	$	48,008	$	(21,454)	$	26,554
Customer relationships	2 to 9	56,003		(11,382)		44,621		21,794		(6,749)		15,045
Brand	1 to 7	9,621		(3,808)		5,813		4,295		(961)		3,334
Non-competition agreements	3	1,932		(1,286)		646		2,105		(591)		1,514
Total		$	126,208	$	(45,294)	$	80,914	$	76,202	$	(29,755)	$	46,447

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 $15.4 million and $10.7 million for the nine months ended September 30, 2021 and 2020, respectively.

DEBT

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

DEBT

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


	September 30, 2021		December 31, 2020
Term loan	$	224,437	$	190,541
Revolving credit facility	—		4,000
Delayed draw term loan	—		8,236
Notes payable	—		1,074
Total debt	224,437		203,851
Unamortized debt issuance costs (1)	(6,420)		(2,293)
Debt, net	218,017		201,558
Current portion of long-term debt	(2,250)		(7,967)
Long-term debt	$	215,767	$	193,591

(1) Includes net debt issuance discount and other costs.

On May 25, 2021, Digital Media Solutions, LLC (“DMS LLC”), as borrower, and DMSH, each of which is a subsidiary of DMS, entered into a five-year $275 million senior secured credit facility (the “Credit Facility”), with a syndicate of lenders (“Lenders”), arranged by Truist Bank and Fifth Third Bank, as joint lead arrangers, and Truist Bank, as administrative agent. The Credit Facility is guaranteed by, and secured by substantially all of the assets of, DMS LLC, DMSH LLC and their material subsidiaries, subject to customary exceptions. Pursuant to the Credit Facility, the Lenders provided DMS LLC with senior secured term loans consisting of a senior secured term loan with an aggregate principal amount of $225 million (the “Term Loan”) and a $50 million senior secured revolving credit facility (the “Revolving Facility”).

The Term Loan which was issued at an original issue discount of 1.8% or $4.2 million, will be subject to payment of 1.0% of the original aggregate principal amount per annum paid quarterly, with a bullet payment at maturity. The Term Loan will mature, and the revolving credit commitments under the Revolving Facility will terminate, on May 25, 2026, when any outstanding balances will become due.

Borrowings under the Revolving Facility bear interest, at our option, at either (i) adjusted LIBOR plus 4.25% or (ii) a base rate (which is equal to the highest of (a) Administrative Agent’s prime rate, (b) the federal funds rate, as in effect from time to time, plus 0.50%, (c) one-month LIBOR plus 1.00%, and (d) 1.75% (the “Base Rate”)), plus 3.25%. The Term Loan bears interest at our option, at either (i) adjusted LIBOR plus 5.00% or (ii) the Base Rate plus 4.00%. Under the Revolving Facility, DMS LLC will pay a 0.50% per annum commitment fee in arrears on the undrawn portion of the revolving commitments.

The initial $4.2 million debt discount and $3.5 million debt issuance cost related to the Term Loan and Revolving Facility will be amortized over the term of the loan consistent with the effective interest method. As of September 30, 2021, the Term Loan debt discount and debt issuance cost classified as debt had a remaining unamortized balance of $3.9 million and $2.5 million, respectively. The $0.8 million unamortized debt issuance cost associated with the undrawn Revolving Facility is classified and amortized as a long term asset.

Upon the closing of the Credit Facility, the credit agreement dated as of July 3, 2018, by and among DMS LLC, DMSH, each of their subsidiaries party thereto, various financial institutions party thereto and Monroe Capital Management Advisors, LLC, as administrative agent and lead arranger, and all outstanding amounts thereunder that was previously outstanding with an aggregate principal amount of $210 million was extinguished, and the $15 million revolving credit facility was closed.

The Company recognized a loss on debt extinguishment of $2.1 million during the nine months ended September 30, 2021, which primarily included accelerated amortization of deferred financing costs, legal fees and early termination fee. The loss recognized is presented as “Debt Extinguishment” in the condensed consolidated statement of operations.

Debt Maturity Schedule

The scheduled maturities of our total debt are estimated as follows at September 30, 2021:


(in thousands)
2021	$	562
2022	2,250
2023	2,250
2024	2,250
2025 and thereafter	217,125
Total debt	$	224,437

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Restructuring and Related Activities [Abstract]

ACQUISITIONS

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

ACQUISITIONS

Crisp Results

On April 1, 2021, the Company completed a transaction to purchase the assets of Crisp Marketing, LLC (“Crisp Results”). Crisp Results is a digital performance advertising company that connects consumers with brands within the insurance sector, with primary focus on the Medicare insurance industry. Crisp Results is known for providing predictable, reliable, flexible and scalable customer acquisition solutions, supporting large brands with a process that combines data, design, technology and innovation.

The Company paid consideration of $40.0 million upon closing of the transaction, consisting of $20.0 million cash and Class A Common Stock valued at $20.0 million. The transaction also includes up to $10.0 million in contingent consideration to be earned over the 12 months following the acquisition, subject to the achievement of certain milestones, and $5.0 million of deferred payment, to be paid 18-months after the acquisition date.

As of April 1, 2021, the acquisition date, the present value of the contingent consideration earnout was recorded at $4.8 million, and the deferred consideration was $4.6 million. As of September 30, 2021, the contingent consideration earnout decreased

$0.2 million during the current quarter to a total of $4.6 million, and the deferred consideration did not materially change. The contingent consideration and deferred payment can be paid in cash or DMS Class A Common Stock at the election of the Company.

In conjunction with this acquisition, we incurred approximately $0.7 million of legal and other acquisition-related expenses, which were recorded as Acquisition costs in the unaudited condensed consolidated operations during the nine months ended September 30, 2021. Additionally, we incurred $0.2 million of equity issuance costs, offsetting the 1.6 million share issuance in the equity for Crisp Results.

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 business have been included in the Company’s results of operations since the acquisition date of April 1, 2021. 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.

The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of Crisp Results and is included in the Marketplace reportable segment. Goodwill is expected to be deductible for tax purposes. Intangible assets primarily consist of brand and customer relationships with an estimated useful life of one to seven years for brand and five to six years for customer relationships. Accounting remains open for working capital adjustments and final fair value calculations due to the timing and complexity of the acquisition transaction.

Aimtell, PushPros and Aramis

The Company acquired on February 1, 2021, Aimtell, Inc. (“Aimtell”), PushPros, Inc. (“PushPros”) and Aramis Interactive (“Aramis”). Aimtell and PushPros are leading providers of technology-enabled digital performance advertising solutions connecting consumers and advertisers within the home, auto, health and life insurance verticals. Aramis is a network of owned-and-operated websites that leverages the Aimtell and PushPros technologies and relationships.

The Company paid consideration, date of the acquisition, $20.0 million at the closing transaction, consisting of $5.0 million in cash and approximately 1.29 million shares of Class A Common Stock valued at $15.0 million, subject to a lock-up agreement, contingent consideration with a fair value of $4.9 million and working capital of $0.3 million. Total payouts for contingent consideration over the three years following the closing of the transaction is $15.0 million, subject to the acquired companies reaching certain milestones.

As of February 1, 2021, the acquisition date, the present value of the contingent consideration earnout was recorded at $4.9 million. From the acquisition date, Aimtell/PushPros/Aramis contingent consideration overall declined $2.4 million to approximately $2.5 million resulting from our revised earnout forecast achieving certain business performance milestones. The contingent consideration can be paid in cash or DMS Class A Common Stock at the election of the Company.

In conjunction with this acquisition, we incurred approximately $0.5 million of legal and other acquisition-related expenses, which were recorded as Acquisition costs in the unaudited condensed consolidated statements of operations during the nine months ended September 30, 2021.

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 February 1, 2021. 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, technology and customer relationships of the acquired business. The fair value of the brand and technology 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.

The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of Aimtell/Aramis/PushPros and is included in the Brand Direct reportable segment. Goodwill is expected to be deductible for Aramis and PushPros for tax purposes. Intangible assets primarily consist of technology, brand and customer relationships with an estimated useful life of four years for technology, one to seven years for brand, and five to six years for customer relationships. Accounting remains open for working capital adjustments and final fair value calculations due to the timing and complexity of the acquisition transaction.

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 was subject to a working capital adjustment that was finalized December 31, 2020.

DMSH issued the SmarterChaos sellers approximately 307,000 DMSH Units, which were 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 during third quarter of 2020 approximately $0.4 million of legal and other acquisition-related expenses, which were recorded as Acquisition costs in the unaudited condensed consolidated statements of operations.

On June 30, 2021, SmarterChaos sellers elected to redeem 154,000 DMSH units; DMS Inc. elected to exchange those for shares of Class A common stock, with an aggregate capital contribution to DMSH of approximately $3.0 million.

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.

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. Goodwill is expected to be deductible for tax purposes. Intangible assets primarily consist of brand and customer relationships with an estimated useful life of one to seven years for brand, and five to six years for customer relationships. The Company has finalized all working capital adjustments and fair value calculations for SmarterChaos and She is Media.

Net assets and liabilities acquired from the 2020 and 2021 Acquisitions consist of the following:


(In thousands)	SmarterChaos		Aimtell, PushPros and Aramis (preliminary)		Crisp Results (preliminary)		Expected Useful Life
	2020		2021		2021
Goodwill	$	3,078	$	4,853	$	17,370
Technology	$	—	$	10,500	$	—	4
Customer relationships	$	2,500	$	7,920	$	26,000	5 to 6
Accounts receivable	$	576	$	3,313	$	2,610
Brand	$	277	$	226	$	5,100	1 to 7
Non-competitive agreements	$	—	$	117	$	—	3
Property and equipment	$	28	$	250	$	220	3 to 5
Accounts payable	$	(1,156)	$	(2,966)	$	(1,593)
Other assets acquired and liabilities assumed, net (1)	$	496	$	1,057	$	—
Net assets and liabilities acquired	$	5,799	$	25,270	$	49,707

(1) Other assets acquired and liabilities assumed, net includes Prepaids, and Other Current Assets, partially offset by other current liabilities (i.e., Travel and expense payables, payroll liabilities, tax liabilities).

The following schedule represents the amounts of net revenue and net income (loss) from operations related to 2021 acquisitions which have been included in the unaudited consolidated statements of operations for the periods indicated subsequent to the acquisition date.


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	Aimtell, PushPros and Aramis		Crisp Marketing		Aimtell, PushPros and Aramis		Crisp Marketing
Net revenue	$	5,976	$	6,407	$	16,051	$	13,374
Net income (loss) from operations	(2,359)		(2,627)		(2,978)		(2,783)

Pro Forma Information

The following unaudited pro forma financial information represents the consolidated financial information as if the acquisitions had been included in our consolidated results beginning on the first day of the fiscal year prior to their respective acquisition dates. The pro forma results do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the acquisitions; the costs to combine the companies’ operations; or the costs necessary to achieve these costs savings, operating synergies and revenue enhancements. The pro forma results do not necessarily reflect the actual results of operations of the combined companies under our ownership and operation.


	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
(In thousands)	Aimtell, PushPros and Aramis		Crisp Results		Aimtell, PushPros and Aramis		Crisp Results
Net revenue	$	5,976	$	6,407	$	20,836	$	21,653
Net income (loss) from operations	$	(2,359)	$	(2,627)	$	(1,724)	$	(540)

	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
	Aimtell, PushPros and Aramis		Crisp Results		Aimtell, PushPros and Aramis		Crisp Results
Net revenue	$	7,164	$	7,453	$	23,596	$	20,563
Net income (loss) from operations	$	1,506	$	2,070	$	4,774	$	4,175

RESTRUCTURING COSTS

9 Months Ended

Sep. 30, 2021

RESTRUCTURING COSTS

Restructuring costs include expenses associated with the Company’s effort to continually improve operational efficiency and reposition its assets to remain competitive on a national basis. Termination of office lease and other related costs include lease and termination of fixed assets, employee training, relocation and facility costs. These costs are recorded in General and administrative expenses in the unaudited condensed consolidated statements of operations.

During the year ended December 31, 2020, the Company entered into negotiations with landlords to terminate lease agreements, for twelve different properties for approximately 62,113 square feet of office space located in Canada and the United States. The Company has settled eight leases through cash buyout or termination.

During the first nine months of 2021, the Company has continued its negotiations with landlords to terminate lease agreements. One new lease was added to the restructuring lease liability through acquisition of Crisp Results in the second quarter of 2021, resulting in five properties for approximately 57,469 square feet of office space located in the United States that are currently in negotiations.

As of September 30, 2021, a reserve of approximately $2.4 million was recorded; and $1.2 million is accrued for within Accrued expenses and other current liabilities and $1.2 million is accrued for within Other non-current liabilities, on the unaudited condensed consolidated balance sheets.

The change in liability for the restructuring costs for the three and nine months ended September 30, 2021, was as follows:


	Three Months Ended September 30,
	2021
Restructuring Lease Liability

Beginning balance at July 1, 2021	$	2,957
Valuation adjustments	(300)
Lease payments	(333)
Lease accretion	45
Ending balance at September 30, 2021	$	2,369

	Nine Months Ended September 30,
	2021
Restructuring Lease Liability

Beginning balance at January 1, 2021	$	3,653
Valuation adjustments	(219)
Lease payments	(1,203)
Lease accretion	138
Ending balance at September 30, 2021	$	2,369

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2021

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. The carrying amounts of our cash and cash equivalents, accounts receivable, income taxes receivable, accounts payable, accrued expenses and income taxes payable, which approximate fair value because of the short-term maturity of those instruments.

Private Placement Warrants

We record the fair value of the Private Placement Warrants as a liability in the Company’s consolidated balance sheet as of December 31, 2020. The fair value of the Private Placement Warrants is considered a Level 3 valuation and is determined using the Black-Scholes-Merton valuation model. Changes in fair value of the Private Placement Warrants are presented under Change in the fair value of warrant liabilities on the Income Statement.

As of September 30, 2021, the Company has approximately 4.0 million Private Placement Warrants outstanding. The significant assumptions were as follows:


	September 30, 2021
Private Placement Warrants Fair Value Per Share	$	2.06
Private Placement Warrant valuation inputs:
Stock price	$	7.25
Strike price	$	11.50
Remaining contractual term in years	3.79
Estimated volatility of Class A Common Stock	55.0		%
Dividend yield	0.0		%
Risk free interest rate	0.71		%

Contingent consideration payable related to acquisitions

The fair value of the contingent consideration payable for the Aimtell/PushPros/Aramis and Crisp Results acquisitions (described in Note 6 Acquisitions) were 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. Changes in fair value of contingent consideration are presented under Acquisition costs on the unaudited condensed statement of operations.


Contingent Consideration assumptions:	Aimtell / PushPros
CYE2021 Revenue Historical - 9 Months	$	6,126,771
CYE2021 Revenue Expectations - 3 Months	$	1,695,000
CYE2022 Revenue Expectations	$	8,485,541
CYE2023 Revenue Expectations	$	9,758,372
CYE2021 Risk Adjusted Revenue - 3 Months	$	1,672,650
CYE2022 Risk Adjusted Revenue	$	7,838,431
CYE2023 Risk Adjusted Revenue	$	8,113,756
Revenue Volatility	40		%
Risk adjustment discount rate	11.8		%
Risk free / Credit risk	6.0		%

Contingent Consideration assumptions:	Aramis
CYE2021 EBITDA - Historical	$	2,383,921
CYE2021 EBITDA 3 Months Expectation	$	1,290,000
CYE2021 Risk Adjusted 3 Months EBITDA	$	1,248,942
CYE2022 Earnout Successful Probability	99		%
EBITDA Volatility	110		%
Risk adjustment discount rate	34		%
Risk free / Credit risk	6.0		%

Contingent Consideration assumptions:	Crisp Results
EBITDA Historical - 6 Months	$	1,800,314
EBITDA Expectations - 6 Months	7,204,542
Risk adjustment EBITDA - 6 Months	$	6,886,426
EBITDA volatility	70		%
Risk adjustment discount rate	22		%
Risk free / Credit risk	6.0		%


		September 30, 2021
Category		Level 1		Level 2		Level 3		Total
Liabilities:
Private Warrant Liabilities	Total liabilities	$	—	$	—	$	8,240	$	8,240
Contingent consideration - current	Contingent consideration payable					$	6,166	$	6,166
Contingent consideration -non-current	Contingent consideration payable	$	—	$	—	$	997	$	997
Total		$	—	$	—	$	15,403	$	15,403

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


Nine Months Ended September 30, 2021	Private Placement Warrants		Contingent Consideration
Beginning January 1, 2021	$	22,080	$	—
Additions	—		9,688
Changes in fair value	(13,835)		(2,525)
Settlements	(5)		—
Ending September 30, 2021	$	8,240	$	7,163


Three Months Ended September 30, 2021	Private Placement Warrants		Contingent Consideration
Beginning July 1, 2021	$	14,640	$	10,248
Additions	—		—
Changes in fair value	(6,400)		(3,085)
Settlements	—		—
Ending September 30, 2021	$	8,240	$	7,163

Share-based Payment Arrangement [Abstract]

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

EMPLOYEE AND DIRECTOR INCENTIVE PLANS

9 Months Ended

Sep. 30, 2021

EMPLOYEE AND DIRECTOR INCENTIVE 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. Directors, officers and employees, as well as others performing independent consulting or advisory services for the Company or its affiliates, will be eligible for grants under the 2020 Plan. The aggregate number of shares reserved under the 2020 Plan is approximately 11.6 million. The 2020 Plan terminates on June 24, 2030.

The fair value of non-vested shares is determined based on the closing trading price of the Company’s shares on the grant date and are amortized over the award’s service period. At September 30, 2021, total non-vested stock-based compensation expense related to restricted stock was $12.1 million, which will be recognized over a weighted-average remaining period of 2.55 years. The weighted-average grant-date fair value of shares granted during the nine-month period ended September 30, 2021, was $9.27 per share.

Restricted Shares

The following table presents the restricted share activity for the nine-month period ended September 30, 2021 (in thousands, except price per share):


Restricted Stock Units	Number of Restricted Stock	Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2021	1,197	$	7.31
Granted	997	$	12.10
Exercised	(432)	$	11.73
Forfeited/Canceled	(299)	$	7.31
Outstanding at September 30, 2021	1,463	$	9.27

As of September 30, 2021, the Company has one share-based compensation plan that allows for granting of restricted share units and stock options. The compensation cost that has been recorded against Consolidated Statement of Operations, “Salaries and related costs” was approximately $1.6 million and $4.3 million for the three and nine months ended September 30, 2021, respectively.

The following table presents the stock option activity for the quarter ended September 30, 2021 (in thousands, except price per share):


Stock Options	Number of Stock Options	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in Years)
Outstanding at January 1, 2021	551	$	3.34	5.9 years
Granted	1,664	$	4.13	6.3 years
Forfeited/expired	(160)	$	4.07	6.3 years
Outstanding at September 30, 2021	2,055	$	3.92	6.2 years

The weighted-average grant-date strike price of options during the three and nine months ended September 30, 2021 was $8.32 and $8.21 per share, respectively.

As of September 30, 2021, the total number of shares issued to other nonemployee consultants for advisory and consulting services are 126,000 restricted units and 118,000 stock options that represent total stock-based compensation fair value of $1.8 million, which $0.2 million has been recorded for services provided to date. On October 27, 2021, the board voted to accelerate the vesting of 34,000 restricted units and 32,000 stock options, which will result in immediate recognition of approximately $0.5 million expense in Q4 2021.

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2021
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. 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 $0.4 million and $1.5 million for the three and nine months ended September 30, 2021, respectively. The blended effective tax rate for the three and nine months ended September 30, 2021 was 6.57% and 13.11%, respectively, which varies from our statutory U.S. tax rate due to taxable income or loss that is allocated to the non-controlling interest as well as due to the impact of changes to the estimate of expected tax benefits related to the Business Combination. The Company recorded $1.6 million and $1.9 million income tax expense for the three and nine months ended September 30, 2020, respectively. The blended effective tax rate for the three and nine months ended September 30, 2020 was 56.45% and 31.40%, respectively, which varies from our statutory U.S. tax rate due to taxable income or loss that is allocated to the non-controlling interest. Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into a Tax Receivable Agreement with the Sellers. Pursuant to the Tax Receivable Agreement, 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 Blocker’s allocable share of the tax basis of the assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions or exchanges of DMS Units for cash or Class A Common Stock after the Business Combination 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 of September 30, 2021, the total amount of estimated payments under the TRA was $16.8 million, of which $1.6 million was current and included in Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheet.

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.

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Revenue from Contract with Customer [Abstract]

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2021

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., by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements.

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,		Nine Months Ended September 30,		Three Months Ended September 30, 2020 (As restated)		Nine Months Ended September 30, 2020 (As restated)
	2021		2021		2020		2020
Numerator:
Net income	$	5,394	$	10,121	$	1,262	$	4,153
Net income (loss) attributable to DMSH prior to the Business Combination	$	—	$	—	$	(4,236)	$	(1,345)
Net income attributable to noncontrolling interest	$	1,858	$	4,217	$	2,463	$	2,463
Net income (loss) attributable to Digital Media Solutions, Inc. - basic	$	3,536	$	5,904	$	3,035	$	3,035

Net income attributable to noncontrolling interest	$	1,858	$	4,217	$	—	$	—
Net income (loss) attributable to Digital Media Solutions, Inc. - diluted	$	5,394	$	10,121	$	3,035	$	3,035

Denominator:
Weighted average shares - basic	36,511		35,050		32,294		32,294
Add: dilutive effects of DMSH Units convertible to Class A Common Stock	25,853		25,853		—		—
Add: dilutive effects of employee equity awards	267		515		—		—
Add: dilutive effects of Private Placement warrants	—		—		—		—
Add: dilutive effects of public warrants	—		168		—		—
Add: dilutive effects of deferred consideration	690		402		—		—
Weighted average shares - diluted	63,321		61,988		32,294		32,294
Net income per common share:
Basic	$	0.10	$	0.17	$	0.09	$	0.09
Diluted	$	0.09	$	0.16	$	0.09	$	0.09

For the three months ended September 30, 2021, the Company excluded 14.0 million warrants, 2.4 million employee equity awards, as the effect was anti-dilutive. For the nine months ended September 30, 2021, the Company excluded 4.0 million warrants and approximately 1.9 million employee equity awards as the effect was anti-dilutive.

For the three and nine months ended September 30, 2021, the Company excluded contingent consideration issued in connection with Aramis, Aimtell and PushPros and Crisp Results acquisitions, which is payable in DMS common stock at the Company’s option, as the necessary conditions to pay such consideration had not been satisfied by the end of the period.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of presentation	Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates. Interim results are not necessarily indicative of the results for a full year.
New accounting standards	Accounting Standards Not Yet Adopted 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 February 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance ASC 842, Lease Accounting, 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 for Emerging Growth Companies (“EGC”) the effective date to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The standard must be adopted using a modified retrospective transition. We plan to adopt the standard using the optional transition method whereby we would apply the new lease requirements through a cumulative-effect adjustment on the effective date of adoption. We plan to elect the package of practical expedients permitted under the transition guidance of the new standards, which allows us to not reassess whether any expired or existing contracts contain leases, allows us to carry forward the historical lease classification and permits us to exclude from our assessment initial direct costs for any existing leases. We will also make an accounting policy election to exclude leases with an initial term of twelve months or less from our transition adjustment. We are currently evaluating the impact on our consolidated balance sheets, recognizing assets and related lease liabilities. 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 is effective for EGC fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact on our consolidated financial statements.
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., by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements.

REVENUE (Tables)

9 Months Ended

Sep. 30, 2021

Disaggregation of Revenue

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


	Three Months Ended September 30, 2021
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total

Net revenue:
Customer acquisition	$	63,332	$	58,278	$	—	$	(18,133)	$	103,477
Managed services	1,667		—		1,471		—		3,138
Software services	—		—		784		—		784
Total Net revenue	$	64,999	$	58,278	$	2,255	$	(18,133)	$	107,399

	Three Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total
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


	Nine Months Ended September 30, 2021
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total

Net revenue:
Customer acquisition	$	174,341	$	165,300	$	—	$	(43,260)	$	296,381
Managed services	6,713		—		3,796		—		10,509
Software services	—		—		2,391		—		2,391
Total Net revenue	$	181,054	$	165,300	$	6,187	$	(43,260)	$	309,281


	Nine Months Ended September 30, 2020
	Brand Direct		Marketplace		Other		Intercompany eliminations		Total
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

REPORTABLE SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Reconciliation of Operations of Segments

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020 As Restated		2021		2020 As Restated

Net revenue	$	107,399	$	82,829	$	309,281	$	230,753
Brand Direct	64,999		49,168		181,054		135,442
Marketplace	58,278		39,541		165,300		108,937
Other	2,255		2,875		6,187		5,375
Intercompany eliminations	(18,133)		(8,755)		(43,260)		(19,001)
Cost of revenue	76,139		57,777		216,680		160,338
Brand Direct	49,815		37,828		136,955		103,125
Marketplace	43,822		27,661		121,477		75,101
Other	635		1,043		1,508		1,113
Intercompany eliminations	(18,133)		(8,755)		(43,260)		(19,001)
Gross profit	$	31,260	$	25,052	$	92,601	$	70,415
Brand Direct	15,184		11,340		44,099		32,317
Marketplace	14,456		11,880		43,823		33,836
Other	1,620		1,832		4,679		4,262
Salaries and related costs	12,449		7,882		34,426		24,114
General and administrative expenses	11,161		6,807		28,675		16,756
Acquisition costs	(2,665)		3,248		(705)		3,322
Depreciation and amortization	7,186		4,636		19,649		13,307
Income from operations	$	3,129	$	2,479	$	10,556	$	12,916

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2021

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, 2020	$	8,616	$	32,660	$	3,628	$	44,904
Additions (Note 6)	4,853		17,370		—		22,223
Balance, September 30, 2021	$	13,469	$	50,030	$	3,628	$	67,127

Schedule of Finite-Lived Intangible Assets

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


		September 30, 2021						December 31, 2020
	Amortization Period (Years)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Intangible assets subject to amortization:
Technology	3 to 5	$	58,652	$	(28,818)	$	29,834	$	48,008	$	(21,454)	$	26,554
Customer relationships	2 to 9	56,003		(11,382)		44,621		21,794		(6,749)		15,045
Brand	1 to 7	9,621		(3,808)		5,813		4,295		(961)		3,334
Non-competition agreements	3	1,932		(1,286)		646		2,105		(591)		1,514
Total		$	126,208	$	(45,294)	$	80,914	$	76,202	$	(29,755)	$	46,447

DEBT (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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


	September 30, 2021		December 31, 2020
Term loan	$	224,437	$	190,541
Revolving credit facility	—		4,000
Delayed draw term loan	—		8,236
Notes payable	—		1,074
Total debt	224,437		203,851
Unamortized debt issuance costs (1)	(6,420)		(2,293)
Debt, net	218,017		201,558
Current portion of long-term debt	(2,250)		(7,967)
Long-term debt	$	215,767	$	193,591

(1) Includes net debt issuance discount and other costs.

Schedule of Maturities of Long-term Debt

The scheduled maturities of our total debt are estimated as follows at September 30, 2021:


(in thousands)
2021	$	562
2022	2,250
2023	2,250
2024	2,250
2025 and thereafter	217,125
Total debt	$	224,437

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.

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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

Net assets and liabilities acquired from the 2020 and 2021 Acquisitions consist of the following:


(In thousands)	SmarterChaos		Aimtell, PushPros and Aramis (preliminary)		Crisp Results (preliminary)		Expected Useful Life
	2020		2021		2021
Goodwill	$	3,078	$	4,853	$	17,370
Technology	$	—	$	10,500	$	—	4
Customer relationships	$	2,500	$	7,920	$	26,000	5 to 6
Accounts receivable	$	576	$	3,313	$	2,610
Brand	$	277	$	226	$	5,100	1 to 7
Non-competitive agreements	$	—	$	117	$	—	3
Property and equipment	$	28	$	250	$	220	3 to 5
Accounts payable	$	(1,156)	$	(2,966)	$	(1,593)
Other assets acquired and liabilities assumed, net (1)	$	496	$	1,057	$	—
Net assets and liabilities acquired	$	5,799	$	25,270	$	49,707

Schedule of Business Acquisitions, by Acquisition


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	Aimtell, PushPros and Aramis		Crisp Marketing		Aimtell, PushPros and Aramis		Crisp Marketing
Net revenue	$	5,976	$	6,407	$	16,051	$	13,374
Net income (loss) from operations	(2,359)		(2,627)		(2,978)		(2,783)

Pro Forma Information

The pro forma results do not necessarily reflect the actual results of operations of the combined companies under our ownership and operation.


	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
(In thousands)	Aimtell, PushPros and Aramis		Crisp Results		Aimtell, PushPros and Aramis		Crisp Results
Net revenue	$	5,976	$	6,407	$	20,836	$	21,653
Net income (loss) from operations	$	(2,359)	$	(2,627)	$	(1,724)	$	(540)

	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
	Aimtell, PushPros and Aramis		Crisp Results		Aimtell, PushPros and Aramis		Crisp Results
Net revenue	$	7,164	$	7,453	$	23,596	$	20,563
Net income (loss) from operations	$	1,506	$	2,070	$	4,774	$	4,175

RESTRUCTURING COSTS (Tables)

9 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

The change in liability for the restructuring costs for the three and nine months ended September 30, 2021, was as follows:


	Three Months Ended September 30,
	2021
Restructuring Lease Liability

Beginning balance at July 1, 2021	$	2,957
Valuation adjustments	(300)
Lease payments	(333)
Lease accretion	45
Ending balance at September 30, 2021	$	2,369

	Nine Months Ended September 30,
	2021
Restructuring Lease Liability

Beginning balance at January 1, 2021	$	3,653
Valuation adjustments	(219)
Lease payments	(1,203)
Lease accretion	138
Ending balance at September 30, 2021	$	2,369

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurement Inputs and Valuation Techniques

As of September 30, 2021, the Company has approximately 4.0 million Private Placement Warrants outstanding. The significant assumptions were as follows:


	September 30, 2021
Private Placement Warrants Fair Value Per Share	$	2.06
Private Placement Warrant valuation inputs:
Stock price	$	7.25
Strike price	$	11.50
Remaining contractual term in years	3.79
Estimated volatility of Class A Common Stock	55.0		%
Dividend yield	0.0		%
Risk free interest rate	0.71		%


Contingent Consideration assumptions:	Aimtell / PushPros
CYE2021 Revenue Historical - 9 Months	$	6,126,771
CYE2021 Revenue Expectations - 3 Months	$	1,695,000
CYE2022 Revenue Expectations	$	8,485,541
CYE2023 Revenue Expectations	$	9,758,372
CYE2021 Risk Adjusted Revenue - 3 Months	$	1,672,650
CYE2022 Risk Adjusted Revenue	$	7,838,431
CYE2023 Risk Adjusted Revenue	$	8,113,756
Revenue Volatility	40		%
Risk adjustment discount rate	11.8		%
Risk free / Credit risk	6.0		%

Contingent Consideration assumptions:	Aramis
CYE2021 EBITDA - Historical	$	2,383,921
CYE2021 EBITDA 3 Months Expectation	$	1,290,000
CYE2021 Risk Adjusted 3 Months EBITDA	$	1,248,942
CYE2022 Earnout Successful Probability	99		%
EBITDA Volatility	110		%
Risk adjustment discount rate	34		%
Risk free / Credit risk	6.0		%

Contingent Consideration assumptions:	Crisp Results
EBITDA Historical - 6 Months	$	1,800,314
EBITDA Expectations - 6 Months	7,204,542
Risk adjustment EBITDA - 6 Months	$	6,886,426
EBITDA volatility	70		%
Risk adjustment discount rate	22		%
Risk free / Credit risk	6.0		%

Fair Value Measurements, Recurring and Nonrecurring


		September 30, 2021
Category		Level 1		Level 2		Level 3		Total
Liabilities:
Private Warrant Liabilities	Total liabilities	$	—	$	—	$	8,240	$	8,240
Contingent consideration - current	Contingent consideration payable					$	6,166	$	6,166
Contingent consideration -non-current	Contingent consideration payable	$	—	$	—	$	997	$	997
Total		$	—	$	—	$	15,403	$	15,403

Fair Value, Liabilities Measured on Recurring Basis, Level 2 Input Reconciliation

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


Nine Months Ended September 30, 2021	Private Placement Warrants		Contingent Consideration
Beginning January 1, 2021	$	22,080	$	—
Additions	—		9,688
Changes in fair value	(13,835)		(2,525)
Settlements	(5)		—
Ending September 30, 2021	$	8,240	$	7,163


Three Months Ended September 30, 2021	Private Placement Warrants		Contingent Consideration
Beginning July 1, 2021	$	14,640	$	10,248
Additions	—		—
Changes in fair value	(6,400)		(3,085)
Settlements	—		—
Ending September 30, 2021	$	8,240	$	7,163

Share-based Payment Arrangement [Abstract]

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

EMPLOYEE AND DIRECTOR INCENTIVE PLANS (Tables)

9 Months Ended

Sep. 30, 2021

Nonvested Restricted Stock Shares Activity

The following table presents the restricted share activity for the nine-month period ended September 30, 2021 (in thousands, except price per share):


Restricted Stock Units	Number of Restricted Stock	Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2021	1,197	$	7.31
Granted	997	$	12.10
Exercised	(432)	$	11.73
Forfeited/Canceled	(299)	$	7.31
Outstanding at September 30, 2021	1,463	$	9.27

Share-Based Payment Arrangement, Option, Activity

The following table presents the stock option activity for the quarter ended September 30, 2021 (in thousands, except price per share):


Stock Options	Number of Stock Options	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in Years)
Outstanding at January 1, 2021	551	$	3.34	5.9 years
Granted	1,664	$	4.13	6.3 years
Forfeited/expired	(160)	$	4.07	6.3 years
Outstanding at September 30, 2021	2,055	$	3.92	6.2 years

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2021

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,		Nine Months Ended September 30,		Three Months Ended September 30, 2020 (As restated)		Nine Months Ended September 30, 2020 (As restated)
	2021		2021		2020		2020
Numerator:
Net income	$	5,394	$	10,121	$	1,262	$	4,153
Net income (loss) attributable to DMSH prior to the Business Combination	$	—	$	—	$	(4,236)	$	(1,345)
Net income attributable to noncontrolling interest	$	1,858	$	4,217	$	2,463	$	2,463
Net income (loss) attributable to Digital Media Solutions, Inc. - basic	$	3,536	$	5,904	$	3,035	$	3,035

Net income attributable to noncontrolling interest	$	1,858	$	4,217	$	—	$	—
Net income (loss) attributable to Digital Media Solutions, Inc. - diluted	$	5,394	$	10,121	$	3,035	$	3,035

Denominator:
Weighted average shares - basic	36,511		35,050		32,294		32,294
Add: dilutive effects of DMSH Units convertible to Class A Common Stock	25,853		25,853		—		—
Add: dilutive effects of employee equity awards	267		515		—		—
Add: dilutive effects of Private Placement warrants	—		—		—		—
Add: dilutive effects of public warrants	—		168		—		—
Add: dilutive effects of deferred consideration	690		402		—		—
Weighted average shares - diluted	63,321		61,988		32,294		32,294
Net income per common share:
Basic	$	0.10	$	0.17	$	0.09	$	0.09
Diluted	$	0.09	$	0.16	$	0.09	$	0.09

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Decrease to deferred tax asset	$ 18,682	$ 18,948
Additional paid-in capital	$ (27,717)	(48,027)
Revision of Prior Period, Adjustment
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Decrease to deferred tax asset		(2,100)
Tax receivable agreement, liability		(1,800)
Additional paid-in capital		$ (300)
DMSH
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity method investment, ownership percentage	55.50%
Prism and Clairvest Direct Seller \| DMSH
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners	44.50%
Prism, Clairvest Direct Seller and SmarterChaos \| DMSH
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners	41.70%	44.80%

REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Net revenue	$ 107,399	$ 82,829	$ 309,281	$ 230,753
Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	64,999	49,168	181,054	135,442
Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	58,278	39,541	165,300	108,937
Other
Disaggregation of Revenue [Line Items]
Net revenue	2,255	2,875	6,187	5,375
Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	(18,133)	(8,755)	(43,260)	(19,001)
Customer acquisition
Disaggregation of Revenue [Line Items]
Net revenue	103,477	74,707	296,381	212,493
Customer acquisition \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	63,332	43,921	174,341	122,557
Customer acquisition \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	58,278	39,541	165,300	108,937
Customer acquisition \| Other
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Customer acquisition \| Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	(18,133)	(8,755)	(43,260)	(19,001)
Managed services
Disaggregation of Revenue [Line Items]
Net revenue	3,138	7,292	10,509	15,830
Managed services \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	1,667	5,247	6,713	12,885
Managed services \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Managed services \| Other
Disaggregation of Revenue [Line Items]
Net revenue	1,471	2,045	3,796	2,945
Managed services \| Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	0
Software services
Disaggregation of Revenue [Line Items]
Net revenue	784	830	2,391	2,430
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	784	830	2,391	2,430
Software services \| Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	$ 0	$ 0	$ 0	$ 0

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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REVENUE - Contract Balances (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Contract with customer, liability	$ 0.9	$ 0.9	$ 1.7
Contract with customer, revenue recognized	1.2	1.7
Contract with customer, receivable, net	$ 2.5	$ 2.5	$ 1.8

REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Reporting Information [Line Items]
Net revenue	$ 107,399	$ 82,829	$ 309,281	$ 230,753
Cost of revenue	76,139	57,777	216,680	160,338
Gross profit	31,260	25,052	92,601	70,415
Salaries and related costs	12,449	7,882	34,426	24,114
General and administrative expenses	11,161	6,807	28,675	16,756
Acquisition costs	(2,665)	3,248	(705)	3,322
Depreciation and amortization	7,186	4,636	19,649	13,307
Income from operations	3,129	2,479	10,556	12,916
Intercompany eliminations
Segment Reporting Information [Line Items]
Net revenue	(18,133)	(8,755)	(43,260)	(19,001)
Cost of revenue	(18,133)	(8,755)	(43,260)	(19,001)
Brand Direct
Segment Reporting Information [Line Items]
Net revenue	64,999	49,168	181,054	135,442
Brand Direct \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	64,999	49,168	181,054	135,442
Cost of revenue	49,815	37,828	136,955	103,125
Gross profit	15,184	11,340	44,099	32,317
Marketplace
Segment Reporting Information [Line Items]
Net revenue	58,278	39,541	165,300	108,937
Marketplace \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	58,278	39,541	165,300	108,937
Cost of revenue	43,822	27,661	121,477	75,101
Gross profit	14,456	11,880	43,823	33,836
Other
Segment Reporting Information [Line Items]
Net revenue	2,255	2,875	6,187	5,375
Other \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	2,255	2,875	6,187	5,375
Cost of revenue	635	1,043	1,508	1,113
Gross profit	$ 1,620	$ 1,832	$ 4,679	$ 4,262

GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Goodwill [Roll Forward]
Balance, December 31, 2020	$ 44,904
Additions	22,223
Balance, September 30, 2021	67,127
Brand Direct \| Operating Segments
Goodwill [Roll Forward]
Balance, December 31, 2020	8,616
Additions	4,853
Balance, September 30, 2021	13,469
Marketplace \| Operating Segments
Goodwill [Roll Forward]
Balance, December 31, 2020	32,660
Additions	17,370
Balance, September 30, 2021	50,030
Other \| Operating Segments
Goodwill [Roll Forward]
Balance, December 31, 2020	3,628
Additions	0
Balance, September 30, 2021	$ 3,628

GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Accumulated impairments	$ 0		$ 0
Amortization of intangible assets	$ 15,400,000	$ 10,700,000

GOODWILL AND INTANGIBLE ASSETS - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Gross	$ 126,208	$ 76,202
Accumulated Amortization	(45,294)	(29,755)
Net	80,914	46,447
Technology
Finite-Lived Intangible Assets [Line Items]
Gross	58,652	48,008
Accumulated Amortization	(28,818)	(21,454)
Net	$ 29,834	26,554
Technology \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	3 years
Technology \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	5 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross	$ 56,003	21,794
Accumulated Amortization	(11,382)	(6,749)
Net	$ 44,621	15,045
Customer relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	2 years
Customer relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	9 years
Brand
Finite-Lived Intangible Assets [Line Items]
Gross	$ 9,621	4,295
Accumulated Amortization	(3,808)	(961)
Net	$ 5,813	3,334
Brand \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	1 year
Brand \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	7 years
Non-competition agreements
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	3 years
Gross	$ 1,932	2,105
Accumulated Amortization	(1,286)	(591)
Net	$ 646	$ 1,514

DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Total debt	$ 224,437	$ 203,851
Unamortized debt issuance costs	(6,420)	(2,293)
Debt, net	218,017	201,558
Current portion of long-term debt	(2,250)	(7,967)
Long-term debt	215,767	193,591
Term loan
Debt Instrument [Line Items]
Total debt	224,437	190,541
Revolving credit facility
Debt Instrument [Line Items]
Total debt	0	4,000
Delayed draw term loan
Debt Instrument [Line Items]
Total debt	0	8,236
Notes payable
Debt Instrument [Line Items]
Notes payable	$ 0	$ 1,074

DEBT - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
DEBT - Additional Information (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	May 25, 2021	May 24, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 6,420,000		$ 6,420,000				$ 2,293,000
Debt extinguishment	0	$ 0	2,108,000	$ 0
Senior Secured Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Debt term					5 years
Senior secured revolving credit facility					$ 275,000,000
Discount amount	3,900,000		3,900,000		4,200,000
Debt issuance costs, before amortization					3,500,000
Unamortized debt issuance costs	$ 2,500,000		$ 2,500,000
Senior Secured Credit Facility \| Line of Credit \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, face amount					$ 225,000,000
Discount as a percentage					1.80%
Discount amount					$ 4,200,000
Payment of original principal amount paid quarterly	1.00%		1.00%
Senior Secured Credit Facility \| Line of Credit \| Secured Debt \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable rate			5.00%
Senior Secured Credit Facility \| Line of Credit \| Secured Debt \| Base Rate
Debt Instrument [Line Items]
Variable rate			4.00%
Senior Secured Credit Facility \| Line of Credit \| Revolving credit facility
Debt Instrument [Line Items]
Senior secured revolving credit facility					$ 50,000,000
Per annum commitment fee			0.50%
Unamortized debt issuance costs	$ 800,000		$ 800,000
Senior Secured Credit Facility \| Line of Credit \| Revolving credit facility \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable rate			4.25%
Alternate base rate			1.00%
Senior Secured Credit Facility \| Line of Credit \| Revolving credit facility \| Fed Funds Effective Rate Overnight Index Swap Rate
Debt Instrument [Line Items]
Alternate base rate			0.50%
Senior Secured Credit Facility \| Line of Credit \| Revolving credit facility \| Base Rate
Debt Instrument [Line Items]
Variable rate			3.25%
Stated rate	1.75%		1.75%
Monroe Facility \| Line of Credit \| Revolving credit facility
Debt Instrument [Line Items]
Senior secured revolving credit facility						$ 15,000,000
Aggregate principal amount extinguished			$ 210,000,000

DEBT - Debt Maturity Schedule (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
2021	$ 562
2022	2,250
2023	2,250
2024	2,250
2025 and thereafter	217,125
Total debt	$ 224,437	$ 203,851

ACQUISITIONS - Additional Information (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

8 Months Ended

9 Months Ended

Apr. 01, 2021

Feb. 01, 2021

Jul. 16, 2020

Sep. 30, 2021

Jun. 30, 2021

^[1]

Sep. 30, 2020

Jun. 30, 2021

Sep. 30, 2021

Sep. 30, 2020

Dec. 31, 2020

Jul. 15, 2020

Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos

$ 24,830

$ 2,799

3,000

Deferred acquisition consideration payable

$ 4,713

4,713

$ 0

Payment of early termination

(2,665)

$ 3,248

(705)

3,322

475

$ 0

Contingent consideration payable - non-current

997

$ 997

$ 0

Technology

4 years

Minimum | Brand

Minimum | Customer relationships

1 year

5 years

Maximum | Brand

Maximum | Customer relationships

7 years

6 years

Crisp Results

Consideration transferred

$ 40,000

Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos

20,000

20,000

Contingent consideration

$ 10,000

Earnout period

12 months

Deferred payment

$ 5,000

Deferred payment period

18 months

Contingent consideration liability

$ 4,800

4,600

$ 4,600

Deferred acquisition consideration payable

$ 4,600

Contingent consideration earnout decrease

200

Payment of early termination

700

$ 200

Equity issued to acquiree (in shares)

1,600,000

Crisp Results | Minimum | Brand

Crisp Results | Minimum | Customer relationships

1 year

Crisp Results | Maximum | Brand

5 years

Crisp Results | Maximum | Customer relationships

7 years

Aimtell, PushPros and Aramis

6 years

Consideration transferred

$ 20,000

Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos

5,000

15,000

Contingent consideration

$ 4,900

Earnout period

3 years

Contingent consideration liability

$ 2,500

2,500

$ 2,500

Contingent consideration earnout decrease

$ 2,400

Equity issued to acquiree (in shares)

$ 500

1,290,000

Working capital

$ 300

Contingent consideration payable - non-current

$ 15,000

Aimtell, PushPros and Aramis | Technology

Aimtell, PushPros and Aramis | Minimum | Brand

4 years

Aimtell, PushPros and Aramis | Minimum | Customer relationships

1 year

Aimtell, PushPros and Aramis | Maximum | Brand

5 years

Aimtell, PushPros and Aramis | Maximum | Customer relationships

7 years

6 years

SmarterChaos

$ 400

Units/shares redeemed and issued to Class A Common Stock (in shares)

$ 5,800

154,000

Units/shares redeemed and issued to Class A Common Stock

$ 392

$ 3,000

SmarterChaos | Minimum | Brand

SmarterChaos | Minimum | Customer relationships

1 year

SmarterChaos | Maximum | Brand

5 years

SmarterChaos | Maximum | Customer relationships

7 years

6 years

SmarterChaos | DMSH