0001628280-23-018259 | 10-Q | XBRL Viewer | Digital Media Solutions INC

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Business, Basis of Presentation and Summary of Significant Accounting Policies (Details) - DMSH	Mar. 31, 2023	Dec. 31, 2022
DMSH
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Equity method investment, ownership percentage	60.90%
Sellers
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners	39.10%	39.10%

Consolidated Statements of Changes in Preferred Stock and Stockholders’ Deficit - USD ($)
shares in Thousands, $ in Thousands

Total

Class A Common Stock

Total Stockholders' Deficit

Preferred Stock

^[4]

Preferred Stock

Preferred stock series A

Preferred Stock

Preferred stock series B

Common Stock

Class A Common Stock

Common Stock

Class A Common Stock

Smarter Chaos

Common Stock

Class B Common Stock

Additional Paid-in Capital

Treasury Stock

Cumulative Deficit

Non- controlling Interest

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

36,226

25,699

Beginning balance at Dec. 31, 2021

$ (47,818)

$ (26,177)

$ 3

$ (25,239)

$ (944)

$ (21,641)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net (loss) income

(5,357)

(3,134)

(2,223)

SmarterChaos DMSH units redeemed and issued to Class A Common Stock (in shares)

^[1]

153

Stock-based compensation

1,942

Shares issued under the 2020 Omnibus Incentive Plan (in shares)

Distributions to non-controlling interest holders

^[2]

(573)

Impact of transactions affecting non-controlling interest

^[3]

(457)

457

Ending balance (in shares) at Mar. 31, 2022

36,394

25,699

Ending balance at Mar. 31, 2022

(51,806)

(27,826)

$ 3

(23,754)

(4,078)

(23,980)

Preferred stock, beginning balance (in shares) at Dec. 31, 2022

Increase (Decrease) in Temporary Equity [Roll Forward]

Convertible redeemable preferred stock (in shares)

^[4]

Convertible redeemable preferred stock, value

^[4]

$ 2,853

$ 2,140

Preferred stock, ending balance (in shares) at Mar. 31, 2023

140

Beginning balance (in shares) at Dec. 31, 2022

39,957

25,699

Beginning balance at Dec. 31, 2022

(83,947)

(47,124)

$ 0

$ 4

$ 3

(14,054)

$ (181)

(32,896)

(36,823)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net (loss) income

(20,701)

(12,598)

(8,103)

Stock-based compensation

1,379

Impact of transactions affecting non-controlling interest

^[5]

$ 0

(3,939)

3,939

Ending balance (in shares) at Mar. 31, 2023

25,699

39,957

25,699

Ending balance at Mar. 31, 2023

$ (103,269)

$ (62,282)

$ 4,993

$ 4

$ 3

$ (16,614)

$ (181)

$ (45,494)

$ (40,987)

[1]	On January 17, 2022, the Sellers of SmarterChaos redeemed their remaining non-controlling interest held through DMSH Units in exchange for 154 thousand shares of 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.
[2]	Represents tax distributions to shareholders Prism, Clairvest and the Sellers of SmarterChaos. As of March 31, 2022, $10 thousand of these distributions have not been paid.
[3]	The carrying amount of non-controlling interest was adjusted primarily to reflect the change in ownership interest caused by additional DMSH units redeemed and issued to Class A Common Stock by the Sellers of SmarterChaos.
[4]	See Note 8. Fair Value Measurements and Note 9. Equity.
[5]	The carrying amount of non-controlling interest was adjusted to reflect the change in ownership interest caused by shares issued in connection with the shares issued under the 2020 Omnibus Incentive Plan.

Debt - Additional Information (Details) - USD ($) $ in Thousands			3 Months Ended
	Dec. 29, 2022	Oct. 04, 2022	Mar. 31, 2023	Mar. 29, 2023	Dec. 31, 2022	May 25, 2021
Debt Instrument [Line Items]
Debt instrument, face amount				$ 14,000
Unamortized debt issuance costs			$ 4,455		$ 4,802
Senior Secured Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Debt term						5 years
Senior secured revolving credit facility						$ 275,000
Discount amount			2,700		3,700	4,200
Proceeds from borrowings on revolving credit facilities	$ 35,000	$ 5,000
Debt issuance costs, before amortization						3,500
Unamortized debt issuance costs			$ 1,700		2,400
Senior Secured Credit Facility \| Line of Credit \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, face amount						$ 225,000
Discount as a percentage						1.80%
Discount amount						$ 4,200
Payment of original principal amount paid quarterly						1.00%
Effective rate			10.36%
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
Effective rate			8.33%
Per annum commitment fee			0.50%
Unamortized debt issuance costs			$ 500		$ 800
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 \| Base Rate
Debt Instrument [Line Items]
Variable rate			3.25%
Stated rate			1.75%
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%
The Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Maximum net debt to EBITDA ratio			4.5

Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Reconciliation of Operations of Segments

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


	Three Months Ended March 31,
		2023 (1)		2022
Net revenue		$	90,313	$	109,110
Brand Direct		55,403		61,228
Marketplace		37,288		58,806
Technology Solutions		2,336		2,336
Intercompany eliminations		(4,714)		(13,260)
Cost of revenue (exclusive of depreciation and amortization)		68,042		77,834
Brand Direct		42,816		48,448
Marketplace		29,338		42,380
Technology Solutions		602		266
Intercompany eliminations		(4,714)		(13,260)
Gross profit (exclusive of depreciation and amortization)		22,271		31,276
Brand Direct		12,587		12,780
Marketplace		7,950		16,426
Technology Solutions		1,734		2,070
Salaries and related costs		12,226		13,705
General and administrative expenses		12,856		11,107
Depreciation and amortization		5,082		7,060

Acquisition costs		2,345		13
Change in fair value of contingent consideration liabilities		13		2,591
Loss from operations		$	(10,251)	$	(3,200)

____________________

(1)ClickDealer’s net revenue, cost of revenue and operating expenses for the one day between March 30, 2023 and March 31, 2023 were considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023.

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

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		Technology Solutions		Total
Balance, December 31, 2022	$	18,321	$	54,554	$	4,363	$	77,238
Additions (Note 5)	—		—		6,207		6,207


Balance, March 31, 2023	$	18,321	$	54,554	$	10,570	$	83,445

Schedule of Finite-Lived Intangible Assets

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


		March 31, 2023						December 31, 2022
	Amortization Period (Years)	Gross		Impairment		Accumulated Amortization		Net		Gross		Impairment		Accumulated Amortization		Net
Technology	4 to 7	$	59,326	$	(5,933)	$	(40,865)	$	12,528	$	54,316	$	(5,933)	$	(39,411)	$	8,972
Customer relationships	4 to 15	69,823		(12,387)		(22,424)		35,012		49,423		(12,387)		(21,205)		15,831
Brand	1 to 7	15,009		(3,250)		(6,493)		5,266		12,169		(3,250)		(6,233)		2,686
Non-competition agreements	1	1,898		—		(1,875)		23		1,898		—		(1,868)		30
Total		$	146,056	$	(21,570)	$	(71,657)	$	52,829	$	117,806	$	(21,570)	$	(68,717)	$	27,519

Finite-Lived Intangible Assets Amortization Expense

Amortization expense relating to intangible assets subject to amortization for each of the next five years and thereafter is estimated to be as follows (in thousands):


	2023		2024		2025		2026		2027		Thereafter
Amortization expense	$	9,239	$	10,789	$	6,264	$	5,574	$	4,401	$	16,562

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

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+ Details

Revenue - Schedule of Allowance for Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 4,656	$ 4,930
Additions charged to costs and expenses	483	529
Deductions/write-offs	398	0
ASU 2016-13 (Topic 326) adjustment	44	0
Balance, end of period	$ 4,785	$ 5,459

Goodwill and Intangible Assets - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Accumulated impairments	$ 0		$ 0
Weighted average useful life	8 years
Amortization of intangible assets	$ 2,900,000	$ 4,900,000
Technology
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life	6 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life	10 years
Brand
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life	6 years
Non-competition agreements
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life	3 years

Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 77,238
Additions (Note 5)	6,207
Goodwill, ending balance	83,445
Brand Direct \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	18,321
Additions (Note 5)	0
Goodwill, ending balance	18,321
Marketplace \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	54,554
Additions (Note 5)	0
Goodwill, ending balance	54,554
Technology Solutions \| Operating Segments
Goodwill [Roll Forward]
Goodwill, beginning balance	4,363
Additions (Note 5)	6,207
Goodwill, ending balance	$ 10,570

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Operating Lease Maturity

The following table summarizes the maturities of undiscounted cash flows of operating lease liabilities reconciled to total lease liability as of March 31, 2023 (in thousands):


	Lease Amounts
2023	$	1,638
2024	1,851
2025	546
Total	4,035
Less: Imputed interest	(126)
Present value of operating lease liabilities	$	3,909

Operating Leases Cost

The following table represents the Company’s aggregate lease costs, by lease classification (in thousands):

Category

Statement of Operations Location

March 31, 2023

Operating lease costs

General and administrative expenses

284

Short-term lease costs

General and administrative expenses

153

Sub-lease income

General and administrative expenses

(179)

Total lease costs, net

258

Leases - Operating Lease Maturity (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Leases [Abstract]
2023	$ 1,638
2024	1,851
2025	546
Total	4,035
Less: Imputed interest	(126)
Present value of operating lease liabilities	$ 3,909

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Net revenue	$ 90,313	$ 109,110
Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	55,403	61,228
Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	37,288	58,806
Technology Solutions
Disaggregation of Revenue [Line Items]
Net revenue	2,336	2,336
Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	(4,714)	(13,260)
Customer acquisition
Disaggregation of Revenue [Line Items]
Net revenue	86,594	105,165
Customer acquisition \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	54,020	59,619
Customer acquisition \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	37,288	58,806
Customer acquisition \| Technology Solutions
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Customer acquisition \| Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	(4,714)	(13,260)
Managed services
Disaggregation of Revenue [Line Items]
Net revenue	2,136	3,119
Managed services \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	1,383	1,609
Managed services \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Managed services \| Technology Solutions
Disaggregation of Revenue [Line Items]
Net revenue	753	1,510
Managed services \| Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Software services
Disaggregation of Revenue [Line Items]
Net revenue	1,583	826
Software services \| Brand Direct
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Software services \| Marketplace
Disaggregation of Revenue [Line Items]
Net revenue	0	0
Software services \| Technology Solutions
Disaggregation of Revenue [Line Items]
Net revenue	1,583	826
Software services \| Intercompany eliminations
Disaggregation of Revenue [Line Items]
Net revenue	$ 0	$ 0

- Definition

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

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+ Details

Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Business Acquisition [Line Items]
Net revenue	$ 110,178	$ 128,382
Net (loss) income from operations	(8,547)	(1,603)
DMS
Business Acquisition [Line Items]
Net revenue	90,313	109,110
Net (loss) income from operations	(10,251)	(3,200)
ClickDealer
Business Acquisition [Line Items]
Net revenue	19,865	18,550
Net (loss) income from operations	$ 1,704	1,580
Traverse
Business Acquisition [Line Items]
Net revenue		722
Net (loss) income from operations		$ 17

Acquisitions - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands						2 Months Ended	3 Months Ended
	Mar. 30, 2023	Jul. 01, 2022	May 10, 2022	Apr. 01, 2021	Feb. 01, 2021	Jun. 30, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Oct. 04, 2022
Business Acquisition [Line Items]
Estimated net working capital adjustment amount	$ 320
Expected Useful Life							8 years
Payments to acquire business							$ 35,320	$ 0
Change in fair value of contingent consideration liabilities							13	$ 2,591
Contingent consideration payable - non-current							$ 2,457		$ 0
Technology
Business Acquisition [Line Items]
Expected Useful Life							6 years
Brand
Business Acquisition [Line Items]
Expected Useful Life							6 years
Customer relationships
Business Acquisition [Line Items]
Expected Useful Life							10 years
Non-competition agreements
Business Acquisition [Line Items]
Expected Useful Life							3 years
Maximum \| Technology
Business Acquisition [Line Items]
Expected Useful Life							7 years
Maximum \| Brand
Business Acquisition [Line Items]
Expected Useful Life								7 years
Maximum \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life								15 years
Maximum \| Non-competition agreements
Business Acquisition [Line Items]
Expected Useful Life							3 years
ClickDealer
Business Acquisition [Line Items]
Consideration transferred	35,000
Contingent consideration liability	2,457
Expected Useful Life							13 years
ClickDealer \| Class A Common Stock
Business Acquisition [Line Items]
Contingent consideration liability	$ 10,000
ClickDealer \| Technology
Business Acquisition [Line Items]
Expected Useful Life	5 years						7 years
ClickDealer \| Brand
Business Acquisition [Line Items]
Expected Useful Life	7 years						5 years
ClickDealer \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life	15 years						15 years
Traverse
Business Acquisition [Line Items]
Consideration transferred			$ 2,500
Contingent consideration liability			$ 428				$ 431
Expected Useful Life							5 years
Milestone period for contingent consideration			15 months
Change in fair value of contingent consideration liabilities						$ 3
Goodwill, measurement period adjustment						$ 291
Traverse \| Technology
Business Acquisition [Line Items]
Expected Useful Life			5 years				5 years
Traverse \| Brand
Business Acquisition [Line Items]
Expected Useful Life			3 years				3 years
Traverse \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life			5 years				5 years
Traverse \| Non-competition agreements
Business Acquisition [Line Items]
Expected Useful Life							1 year
Traverse \| Maximum
Business Acquisition [Line Items]
Contingent consideration liability			$ 500
Crisp Results
Business Acquisition [Line Items]
Consideration transferred				$ 40,000
Expected Useful Life							5 years 7 months 6 days
Payments to acquire business				$ 20,000
Equity issued to acquiree (in shares)				1,600
Issuance of equity for AAP and Crisp Results				$ 20,000
Contingent consideration				10,000
Deferred payment				$ 5,000
Deferred payment period				18 months
Deferred payment period				20 days
Deferred acquisition consideration payable										$ 5,000
Crisp Results \| Class A Common Stock
Business Acquisition [Line Items]
Shares issued in connection with acquisition (in shares)		2,990
Sale of stock price per unit (usd per share)		$ 3.3455
Crisp Results \| Brand
Business Acquisition [Line Items]
Expected Useful Life							7 years
Crisp Results \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life							6 years
AAP
Business Acquisition [Line Items]
Consideration transferred					$ 20,000
Expected Useful Life							4 years
Payments to acquire business					$ 5,000
Equity issued to acquiree (in shares)					1,290
Issuance of equity for AAP and Crisp Results					$ 15,000
Contingent consideration payable - non-current					$ 15,000
Earnout period					3 years
AAP \| Technology
Business Acquisition [Line Items]
Expected Useful Life							4 years
AAP \| Brand
Business Acquisition [Line Items]
Expected Useful Life							2 years 1 month 6 days
AAP \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life							4 years 1 month 6 days
AAP \| Non-competition agreements
Business Acquisition [Line Items]
Expected Useful Life							3 years

Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. adjusted for the income effects of dilutive instruments by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements.

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


	Three Months Ended March 31,
		2023		2022
Numerator:
Net loss		$	(20,701)	$	(5,357)

Net loss attributable to non-controlling interest		(8,103)		(2,223)
Net loss attributable to Digital Media Solutions, Inc.- basic and diluted		$	(12,598)	$	(3,134)





Denominator:






Weighted average shares - basic and diluted		39,957		35,576

Net loss per common share:
Basic and diluted		$	(0.32)	$	(0.09)

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

For the three months ended March 31, 2023, the Company excluded 25.7 million shares of Class B convertible common stock, 4.0 million private warrants, 10.0 million public warrants, 14.4 million preferred warrants, 1.6 million stock options, 1.2 million RSUs, 0.4 million PRSUs, and the contingent and deferred considerations issued in connection with the ClickDealer and Aramis acquisitions as their effect would have been anti-dilutive. For the three months ended March 31, 2022, the Company excluded 25.7 million shares of Class B Common Stock, 4.0 million private warrants, 10.0 million public warrants, 2.0 million stock options, 1.6 million RSUs, and the contingent and deferred considerations issued in connection with the AAP and Crisp Results acquisitions, as their effect would have been anti-dilutive.

Earnings Per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Class B Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded (in shares)	25.7	25.7
Private Warrant
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded (in shares)	4.0	4.0
Public Warrant
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded (in shares)	10.0	10.0
Preferred Warrant
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded (in shares)	14.4
Stock Options
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded (in shares)	1.6	2.0
Restricted Stock Units (RSUs)
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded (in shares)	1.2	1.6
Performance Shares
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded (in shares)	0.4

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 20,066	$ 48,839
Accounts receivable, net of allowances of $4,785 and $4,656, respectively	56,369	48,109
Prepaid and other current assets	4,177	3,296
Income tax receivable	2,536	1,966
Total current assets	83,148	102,210
Property and equipment, net	16,719	17,702
Operating lease right-of-use assets, net	1,943	2,187
Goodwill	83,445	77,238
Intangible assets, net	52,829	27,519
Other assets	723	765
Total assets	238,807	227,621
Current liabilities:
Accounts payable	45,598	39,908
Accrued expenses and other current liabilities	12,188	7,101
Current portion of long-term debt	2,250	2,250
Tax Receivable Agreement liability	164	164
Operating lease liabilities - current	2,175	2,175
Contingent consideration payable - current	1,466	1,453
Total current liabilities	63,841	53,051
Long-term debt	254,358	254,573
Deferred tax liabilities	1,662	1,112
Operating lease liabilities - non-current	1,734	2,232
Warrant liabilities	13,031	600
Contingent consideration payable - non-current	2,457	0
Total liabilities	337,083	311,568
Preferred stock, $0.0001 par value, 100,000 shares authorized; 80 Series A and 60 Series B convertible redeemable issued and outstanding, respectively	4,993	0
Stockholders' deficit:
Additional paid-in capital	(16,614)	(14,054)
Treasury stock, at cost, 138 and 0 shares, respectively	(181)	(181)
Cumulative deficit	(45,494)	(32,896)
Total stockholders' deficit	(62,282)	(47,124)
Non-controlling interest	(40,987)	(36,823)
Total deficit	(103,269)	(83,947)
Total liabilities, preferred stock and stockholders' deficit	238,807	227,621
Class A Common Stock
Stockholders' deficit:
Common stock	4	4
Class B Common Stock
Stockholders' deficit:
Common stock	3	3
Class C common stock
Stockholders' deficit:
Common stock	$ 0	$ 0

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

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 loss per share of Class A common stock:


	Three Months Ended March 31,
		2023		2022
Numerator:
Net loss		$	(20,701)	$	(5,357)

Net loss attributable to non-controlling interest		(8,103)		(2,223)
Net loss attributable to Digital Media Solutions, Inc.- basic and diluted		$	(12,598)	$	(3,134)





Denominator:






Weighted average shares - basic and diluted		39,957		35,576

Net loss per common share:
Basic and diluted		$	(0.32)	$	(0.09)

Consolidated Statements of Changes in Preferred Stock and Stockholders’ Deficit (Parenthetical)
shares in Thousands, $ in Thousands

3 Months Ended

Mar. 31, 2022

USD ($)

Unpaid distributions | $

$ 10

Common Stock | Smarter Chaos | Class A Common Stock

Stock issued during period, conversion of convertible securities (in shares) | shares

153

^[1]

[1]

On January 17, 2022, the Sellers of SmarterChaos redeemed their remaining non-controlling interest held through DMSH Units in exchange for 154 thousand shares of 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.

Reportable Segments

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Reportable Segments

Reportable SegmentsThe 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 loss from operations (in thousands):


	Three Months Ended March 31,
		2023 (1)		2022
Net revenue		$	90,313	$	109,110
Brand Direct		55,403		61,228
Marketplace		37,288		58,806
Technology Solutions		2,336		2,336
Intercompany eliminations		(4,714)		(13,260)
Cost of revenue (exclusive of depreciation and amortization)		68,042		77,834
Brand Direct		42,816		48,448
Marketplace		29,338		42,380
Technology Solutions		602		266
Intercompany eliminations		(4,714)		(13,260)
Gross profit (exclusive of depreciation and amortization)		22,271		31,276
Brand Direct		12,587		12,780
Marketplace		7,950		16,426
Technology Solutions		1,734		2,070
Salaries and related costs		12,226		13,705
General and administrative expenses		12,856		11,107
Depreciation and amortization		5,082		7,060

Acquisition costs		2,345		13
Change in fair value of contingent consideration liabilities		13		2,591
Loss from operations		$	(10,251)	$	(3,200)

____________________

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

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

+ Details

Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net loss	$ (20,701)	$ (5,357)
Net loss attributable to non-controlling interest	(8,103)	(2,223)
Net loss attributable to Digital Media Solutions, Inc.- basic and diluted	$ (12,598)	$ (3,134)
Denominator:
Weighted average shares - basic (in shares)	39,957	35,576
Weighted-average shares - diluted (in shares)	39,957	35,576
Net loss per common share:
Basic (usd per share)	$ (0.32)	$ (0.09)
Diluted (usd per share)	$ (0.32)	$ (0.09)

Employee and Director Incentive Plans (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Jul. 15, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 1.3	$ 1.9
2020 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capital shares reserved for future issuance (in shares)			11.6

Acquisitions - Changes in Fair Value (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended
	Jun. 30, 2022	Mar. 31, 2023	Mar. 31, 2022	Mar. 30, 2023	Dec. 31, 2022	May 10, 2022
Business Acquisition [Line Items]
Goodwill		$ 83,445			$ 77,238
Change in fair value of contingent consideration liabilities		13	$ 2,591
ClickDealer
Business Acquisition [Line Items]
Goodwill			6,207	$ 6,207
Contingent consideration liability				2,457
Working capital accounts				3,320
ClickDealer \| Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired			5,010	5,010
ClickDealer \| Customer relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired			20,400	20,400
ClickDealer \| Brand
Business Acquisition [Line Items]
Finite-lived intangible assets acquired			2,840	$ 2,840
ClickDealer \| Non-competition agreements
Business Acquisition [Line Items]
Finite-lived intangible assets acquired			0
Traverse
Business Acquisition [Line Items]
Goodwill		735	735			$ 444
Goodwill, measurement period adjustment	$ 291
Contingent consideration liability		431				428
Change in fair value of contingent consideration liabilities	3
Working capital accounts		284				(49)
Fair Value Mark-to-Market changes, Working capital accounts	333
Traverse \| Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		2,470	2,470			2,500
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired	(30)
Traverse \| Customer relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		50	50			50
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired	0
Traverse \| Brand
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		60	60			59
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired	1
Traverse \| Non-competition agreements
Business Acquisition [Line Items]
Finite-lived intangible assets acquired		$ 0	$ 0			$ 3
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired	$ (3)

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 11, 2023
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity Registrant Name	Digital Media Solutions, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38393
Entity Tax Identification Number	98-1399727
Entity Address, Address Line One	4800 140th Avenue N.
Entity Address, Address Line Two	Suite 101
Entity Address, City or Town	Clearwater
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33762
City Area Code	877
Local Phone Number	236-8632
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Central Index Key	0001725134
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Class A Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Class A common stock, $0.0001 par value per share
Trading Symbol	DMS
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		40,041,025
Class B Common Stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		25,699,464
Redeemable warrants to acquire Class A common stock
Entity Information [Line Items]
Title of 12(b) Security	Redeemable warrants to acquire Class A common stock
Trading Symbol	DMS WS
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		28,443,522

Leases - Operating Leases Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating lease costs	$ 284
Short-term lease costs	153
Sub-lease income	(179)	$ (100)
Total lease costs, net	$ 258

Equity	3 Months Ended
Equity	Mar. 31, 2023
Equity [Abstract]
Equity	Equity Preferred Stock The Board has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series, and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of Preferred Stock of the Company could have the effect of decreasing the trading price of Company Common Stock, restricting dividends on the capital stock of the Company, diluting the voting power of the Company Common Stock, impairing the liquidation rights of the capital stock of the Company, or delaying or preventing a change in control of the Company. The Company is authorized to issue 100,000,000 preferred shares with such designations, voting, and other rights and preferences as may be determined from time to time by the Board. March 2023 Offering On March 29, 2023, the Company entered into a Securities Purchase Agreement with certain investors, pursuant to which the Company sold (i) 80,000 shares of Series A Preferred Stock accompanied with warrants to purchase 8,253,968 Class A Common Stock (“Series A Warrant”) and (ii) 60,000 shares of Series B Preferred Stock accompanied with warrants to purchase 6,190,476 shares of Class A Common Stock (“Series B Warrants”). One share of Series A Preferred Stock with the accompanying warrants (“Series A Unit”) and one share of Series B Preferred Stock with the accompanying warrants (“Series B Unit”) were sold at $100 per unit. Although the Preferred Stock are mandatorily redeemable, the Preferred Stock have a substantive conversion feature; and therefore, are not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity. However, as the Preferred Stock are mandatorily redeemable, redeemable in certain circumstances at the option of the holder, and redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, the Company has classified the Preferred Stock as mezzanine equity in the consolidated balance sheets. The Company measures the Preferred Stock at its maximum redemption value plus dividends not currently declared or paid but which will be payable upon redemption. The fair value of the preferred stock at issuance was recognized using the discount method, which accounts for the 11% discount of the stated value and a pro-rata allocation of the proceeds between the preferred shares and the warrants, less a pro-rata amount of the transaction costs. Dividend Rights The holders are entitled to cumulative dividends at a 4.0% rate, which is accrued and compound annually whether or not declared. These dividends are payable in cash or Class A Common Stock upon conversion or redemption of the underlying preferred stock. Additionally, the holders are also entitled to participate in dividends declared or paid on Class A Common Stock on an as-converted basis. Conversion Rights Each holder has the right, at its option, to convert its Preferred Stock into Class A Common Stock at either, at the option of the holder, (1) the Conversion Price, which is equal to $0.56 per share or (2) the Alternate Conversion Price, which is equal to the lesser of (i) 90% of the arithmetic average of the three lowest daily VWAPs (as defined in the Securities Purchase Agreement) of the 20 trading days prior to the applicable conversion date or (ii) 90% of the VWAP of the trading day prior to the applicable conversion date. Both the Conversion Price and the Alternate Conversion Price are subject to a floor price of $0.484 (“Floor Price”). However, for the Series A Preferred Stock only, if redemption of the Series A Preferred Stock is accelerated by either the Company or the holder (see the Accelerated Redemption provisions defined below), (i) any cash payment required to be made is not made, and (ii) the existing investors have defaulted under their obligations to purchase the Series A pursuant to the terms of a side letter, then the Floor Price shall be $0.161. The Conversion Price is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, subdivisions, combinations, recapitalization, or similar events, and subject to price-based adjustment in the event of any issuances of Class A Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). Additionally, the Conversion Price is subject to adjustment for any increase or decrease to the exercise price or conversion price to any outstanding options or convertible securities the Company has issued. Pursuant to the terms of the Securities Purchase Agreement, unless and until approval of our stockholders is obtained as contemplated by NYSE listing rules, the holders may not convert shares of Series A Preferred Stock into shares of Class A Common Stock if and solely to the extent that such conversion would result in the holders beneficially owning in excess of 20% of the then outstanding voting power or the common stock outstanding before the issuance (“20% Threshold”). For the number of Class A Common Stock that are not able to be delivered upon conversion due to exceeding this 20% Threshold, the Company is required to redeem those excess shares of Class A Common Stock in cash at their closing price on the trading day preceding the notice of conversion. Further, under the Securities Purchase Agreement, the Company is prohibited from effecting a conversion of Series A, and the holder is not allowed to convert the Series A if, upon conversion of the Series A, the holder would beneficially own more than 4.99% (or upon election by the holder prior to the issuance of the Series A, 9.99%) of the Class A Common Stock outstanding. Additionally, unless and until approval of our stockholders is obtained as contemplated by NYSE listing rules, no holder may convert shares of Series B Preferred Stock into shares of Class A Common Stock if and solely to the extent that such conversion would result in the holder beneficially owning in excess of 1% of the then outstanding voting power or the common stock outstanding before the issuance (“1% Threshold”). For the number of Class A Common Stock that are not able to be delivered upon conversion due to exceeding this 1% Threshold, the Company is required to redeem those excess shares of Class A Common Stock in cash at their closing price on the trading day preceding the notice of conversion. The Company determined that the nature of the Preferred Stock was more akin to an equity instrument than a debt instrument because the Preferred Stock are subject to a substantive Conversion Option that is in-the-money and the Company has the ultimate authority to settle redemption of the Preferred Warrants upon the Mandatory Redemption or Accelerated Redemption (all defined below) by issuing shares of Class A Common Stock rather than paying cash. Further, such potential share settlement will be at the lower of the Conversion Price or based on the Company’s VWAP allowing for the holder to be exposed to the risks and returns of the underlying Class A Common Stock. Accordingly, the economic characteristics and risks of the embedded option to convert the Preferred Stock at the Conversion Price (the “Conversion Option”) was clearly and closely related to the host contract. As such, the Conversion Option was not required to be bifurcated from the host under ASC 815, Derivatives and Hedging. Redemption Rights In addition to the share-settled redemption feature discussed above in the Conversion Rights section (e.g., conversion of the Preferred Stock at the Alternate Conversion Price), the Preferred Warrants are subject to several redemption features. Mandatory Redemption – On and after June 29, 2023, the Preferred Stock are required to redeem 1/10th of the number of the issued shares of Preferred Stock on a monthly basis (“Installments”). The redemption price is paid, at the option of the Company: (i) in cash at an amount that is approximately 116% of the $100 per share purchase price plus all accrued and unpaid dividends and any other amounts due (the “Mandatory Redemption Price”), (ii) in a variable number shares of Class A Common Stock based on a share price equal to the lesser of (1) the prevailing Conversion Price, (2) 90% of the arithmetic average of the three lowest daily VWAPs of the 20 Trading Days prior to the applicable mandatory redemption date, or (3) 90% of the VWAP of the trading day prior to the applicable mandatory redemption date, provided that such share price used will not be below the Floor Price, or (iii) in a combination thereof. Installments may be deferred or reallocated to other dates at the Preferred Stockholders’ discretion. Accelerated Redemption – The holders of the Preferred Stock have the right to require redemption of all or any part of the Preferred Stock at any time after June 15, 2023. Additionally, the Company has the option to elect redemption of all Series A shares at any time on or after June 15, 2023. The redemption price, as elected by the holder, is paid in either (i) the Mandatory Redemption Price in cash, (ii) in a variable number of shares of Common Stock based on a share price equal to the lesser of (1) the prevailing Conversion Price, (2) 90% of the arithmetic average of the three lowest daily VWAPs of the 20 Trading Days prior to the applicable accelerated redemption date or (3) 90% of the VWAP of the trading day prior to the applicable accelerated redemption date, provided that such share price used will not be below the Floor Price, or (iii) a combination thereof. Triggered Optional Redemption – If the Company closes a debt or equity financing, then each holder has the right to require the Company to use 30% of the proceeds from the financing to repurchase a pro rata portion of that holder's Preferred Stock in cash at the Mandatory Redemption Price. Default Redemption – Upon certain default events in which the Company defaults on its covenants, promises, or obligations under the Securities Purchase Agreement or defaults on any of its other obligations, the holder has the option to redeem the Preferred Stock for a cash amount equal to 115% of the Mandatory Redemption Price. Bankruptcy Redemption – If the Company is subject to a bankruptcy event, then the Company is required to immediately redeem the outstanding Preferred Stock for cash. The redemption price paid shall equal 115% of the Mandatory Redemption Price. Change of Control Redemption – Upon change of control events (as defined in the Securities Purchase Agreement), the holders have the option to require the Company to redeem the Preferred Stock for cash. The redemption price paid shall equal the greater of (i) the product of 115% multiplied by the Mandatory Redemption Price and (ii) the prevailing Conversion Price plus all accrued but unpaid dividends. If upon an Accelerated Redemption, Triggered Optional Redemption, or Default Redemption, any cash payment required to be made is not made, then the holder can elect to retain its shares of Preferred Warrants that have not been redeemed for cash and sell the shares of Preferred Stock to a third party. Additionally, if such an election is not made by the holder, the Company has the authority to pay to the holder the unpaid cash redemption payment in duly authorized, validly issued, fully paid and non-assessable shares of Class A Common Stock. As noted above, the Company determined that the nature of the Preferred Stock were more akin to an equity instrument than a debt instrument. The Company determined that the economic characteristics and risks of the embedded redemption features discussed above were not clearly and closely related to the host contract. However, the Company assessed these items further and determined they did not meet the definition of a derivative under ASC 815, Derivatives and Hedging. Liquidation Rights Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), prior and in preference to the common stock and the Series B Preferred Stock, the holders of Series A Preferred Stock are entitled to receive out of the assets available for distribution to stockholders an amount equal in cash to approximately 128% of the $100 per share purchase price plus all accrued and unpaid dividends and any other amounts due. After the payment of all preferential amounts required to be paid to the Series A holders, the Series B holders shall be entitled to receive out of the assets available for distribution to stockholders an amount equal in cash to approximately 128% of the $100 per share purchase price plus all accrued and unpaid dividends and any other amounts due. Voting Rights Holders of the Preferred Stock are entitled to vote with the holders of the ordinary shareholders on an as-converted basis. Holders of the Preferred Stock are entitled to a separate class vote with respect to (i) altering or changing the powers, preferences, or rights of the Preferred Stock so as to affect them adversely, (ii) amending the Certificate of Incorporation or other charter documents in a manner adverse to the holders, (iii) increasing the number of authorized shares of Preferred Stock, or (iv) entering into any agreement with respect to any of the foregoing.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Employee and Director Incentive Plans	3 Months Ended
Employee and Director Incentive Plans	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Employee and Director Incentive Plans	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 and repurchase 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, are 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 related costs were approximately $1.3 million and $1.9 million for the three months ended March 31, 2023 and 2022, respectively, and are included in “Salaries and related costs” within the consolidated statements of operations. Fair value of stock-based compensation is based on the closing trading price of the Company’s stock on the grant date. Restricted Stock Units For the three months ended March 31, 2023 and 2022, respectively, there were no new RSU awards.

Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands

Mar. 31, 2023

Dec. 31, 2022

Allowance for credit loss

$ 4,785

$ 4,656

Common stock outstanding (in shares)

25,699,000

Treasury stock (in shares)

138,000

Preferred Stock

Preferred stock outstanding (in shares)

^[1]

140,000

Series A Preferred Stock

Preferred stock par value (usd per share)

$ 0.0001

Preferred stock, authorized (in shares)

100,000,000

Series A Preferred Stock | Preferred Stock

Preferred stock issued (in shares)

80,000

Preferred stock outstanding (in shares)

80,000

Series B Preferred Stock | Preferred Stock

Preferred stock issued (in shares)

60,000

Preferred stock outstanding (in shares)

60,000

Class A Common Stock

Common stock par value (usd per share)

$ 0.0001

Common stock authorized (in shares)

500,000,000

Common stock issued (in shares)

39,957,000

Common stock outstanding (in shares)

39,957,000

Class B Common Stock

Common stock par value (usd per share)

$ 0.0001

Common stock authorized (in shares)

60,000,000

Common stock issued (in shares)

25,699,000

Class C common stock

Common stock par value (usd per share)

$ 0.0001

Common stock authorized (in shares)

40,000,000

Common stock issued (in shares)

Common stock outstanding (in shares)

[1]	See Note 8. Fair Value Measurements and Note 9. Equity.

Acquisitions

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

ClickDealer

On March 30, 2023, the Company completed a transaction to acquire the HomeQuote.io home services marketplace from Customer Direct Group, along with the supporting media and technology assets of the ClickDealer international ad network, ("ClickDealer"). ClickDealer’s international performance ad network and the HomeQuote.io marketplace connects consumers with brands within the home improvement and related home services sector.

The Company paid cash consideration of $35.0 million upon closing of the transaction. The transaction also included up to $10.0 million in contingent consideration, subject to the achievement of certain revenue and net margin based milestones in two subsequent one-year measurement periods, payable in cash or in Class A Common Stock at the election of the Company. The Estimated Net Working Capital adjustment upon closing was $0.32 million.

During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. All recognized assets and liabilities are preliminary, including any foreign jurisdiction taxation, if any, and except for the contingent consideration.

Future further analysis of the forecast and refinements to the significant assumptions in the valuation models used to value the intangibles and contingent consideration liabilities may be needed to adjust their fair value throughout the measurement period.

As of March 30, 2023, the acquisition date, the fair value of the intangibles, contingent consideration liability and working capital accounts are as follows (in thousands):


ClickDealer	Acquisition Date Fair Value
Goodwill	$	6,207
Intangible Assets:
Technology	$	5,010
Customer relationships	$	20,400
Brand	$	2,840


Contingent consideration liability	$	2,457

Working capital accounts	$	3,320

The Company primarily used Income Approach methodologies, 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 excluded in the Company’s results of operations since the acquisition date of March 30, 2023, as they were immaterial. Under 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. Fair value of the ClickDealer and Homequote.io brands was determined using the Income Approach and Relief from Royalty Method, fair value of the technology was determined using the Relief from Royalty Method, and fair value of customer relationships was determined using the Multi Period Excess Earnings Method.

The Goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of ClickDealer and will be included in the Brand Direct reportable segment. The goodwill expected to be deductible for tax purposes is being evaluated. Intangible assets primarily consist of brand, technology and customer relationships with an estimated useful life of five years for brand, seven years for technology and fifteen years for customer relationships.

Traverse

On May 10, 2022, the Company acquired Traverse Data, Inc. (“Traverse”). Traverse is a marketing and advertising technology company. The Company paid cash consideration of $2.5 million upon closing of the transaction. The transaction also includes up to $0.5 million in contingent consideration, subject to the achievement of certain milestones, which is payable in cash 15 months after the acquisition date.

Determining the fair value of assets acquired and liabilities assumed requires management's judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. As the result of the completed valuation of the assets acquired (including intangibles) and liabilities assumed, as well as the contingent consideration liabilities, as of the acquisition dates, the following adjustments were recorded related to further analysis of the forecast (for example, items that occurring in the pre-acquisition period that should have been factored into the forecast as of the acquisition date) and refinements to the significant assumptions in the valuation models used to value the intangibles and contingent consideration liabilities. As a result, we have made adjustment to the initial and subsequent fair value of our intangible asset, goodwill, contingent consideration and working capital. The impact of these adjustments are as follows (in thousands):


Traverse	Acquisition Date Fair Value		Fair Value Mark-to-Market Changes		Revised Acquisition Date Fair Value
Goodwill	$	444	$	291	$	735
Intangible Assets:
Technology	$	2,500	$	(30)	$	2,470
Customer relationships	$	50	$	—	$	50
Brand	$	59	$	1	$	60
Non-competition agreements	$	3	$	(3)	$	—

Contingent consideration liability	$	428	$	3	$	431

Working capital accounts	$	(49)	$	333	$	284

The Company primarily used Income Approach methodologies, 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 May 10, 2022. 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 technology, brand, customer relationships and non-competition agreements. Fair value of the technology was determined using the Multi Period Excess Earnings Approach; fair value of the customer relationships was determined using the Excess Earnings Method utilizing distributor inputs; fair value of the brand was determined using the Relief from Royalty Method; and fair value of the non-competition agreements was determined using the Discounted Cash Flow Approach.

The Goodwill related to this transaction reflects the synergies expected from combining the operations of Traverse and is included in the Technology Solutions reportable segment. Goodwill is expected to be deductible for tax purposes. Intangible assets primarily consist of technology, brand and customer relationships with an estimated useful life of five years for technology, three years for brand and five years for customer relationships.

Crisp Results

On April 1, 2021, the Company completed a transaction to purchase the assets of Crisp Marketing, LLC (“Crisp Results” or “Crisp”). 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 1.6 million Class A Common Stock valued at $20.0 million. The transaction also included up to $10.0 million in contingent consideration, and a $5.0 million deferred payment, to be paid 18 months after the acquisition date. Accounting for the acquisition was completed on March 31, 2022. The Company paid the contingent consideration on July 1, 2022 in the form of 2.99 million unregistered shares of Class A Common Stock, priced at $3.3455, the average closing price of the Class A common stock during the twenty trading-day period ended March 31, 2022. The $5.0 million deferred consideration became due on October 1, 2022, which the Company paid on October 4, 2022.

Aimtell, Aramis and PushPros

On February 1, 2021, the Company acquired Aimtell, Inc. (“Aimtell”), PushPros, Inc. (“PushPros”) and Aramis Interactive (“Aramis”, and together with Aimtell and PushPros, “AAP”). Aimtell and PushPros are leading providers of technology-enabled digital performance advertising solutions that connect 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 of $20.0 million upon closing of the transaction, consisting of $5.0 million in cash and approximately 1.29 million shares of Class A Common Stock valued at $15.0 million. The transaction also included up to $15.0 million in contingent consideration to be earned over the three years following the acquisition, subject to the achievement of certain milestones. The contingent consideration can be paid in cash or Class A Common Stock at the election of the Company. Accounting for the acquisition was completed on March 31, 2022.

The contingent consideration for the Aramis acquisition was finalized on December 31, 2022, the end of the earnout period, and will become payable during the second quarter of 2023, in the form of cash or Class A Common Stock, at the election of the Company. The contingent consideration for the Aimtell / PushPros acquisition will finalize on December 31, 2023, the end of the earnout period.

Acquisitions’ Fair Value Measurement and Pro Forma Information

The acquisition date fair value of assets acquired and liabilities assumed from the AAP, Crisp Results and Traverse acquisitions consist of the following (in thousands):


	Expected Useful Life	AAP		Crisp Results		Traverse		ClickDealer
		2021		2021		2022		2023
Cash		$	—	$	—	$	232	$	—
Goodwill		9,761		21,894		735		6,207
Technology	4 to 7	3,900		—		2,470		5,010
Customer relationships	4 to 15	7,690		19,600		50		20,400
Accounts receivable		3,100		2,610		276		7,452
Brand	1 to 7	208		7,400		60		2,840
Non-competitive agreements	1 to 3	83		—		—		—
Property and equipment	3 to 5	250		220		—		—
Accounts payable		(2,887)		(1,593)		(232)		(4,357)
Other assets acquired and liabilities assumed, net (1)		740		1		7		225
Net assets and liabilities acquired		$	22,845	$	50,132	$	3,598	$	37,777

____________________

(1)Other assets acquired and liabilities assumed, net includes prepaids and other current assets, partially offset by other current liabilities (e.g., Travel and expense payables, payroll liabilities, tax liabilities, and transition services payable).

The weighted average amortization period for AAP acquisition technology is 4 years, customer relationships is 4.1 years, brand is 2.1 years and non-compete agreements is 3 years. The weighted average amortization period for Crisp Results acquisition customer relationships is 6 years, and brand is 7 years. The weighted average amortization period for Traverse acquisition technology is 5 years, customer relationships is 5 years, brand is 3 years and non-compete agreements is 1 year. The weighted average amortization period for ClickDealer acquisition technology is 7 years, customer relationships is 15 years and brand is 5 years. In total, the weighted average amortization period for AAP is 4 years, Crisp Results is 5.6 years, Traverse is 5 years and ClickDealer is 13 years.

The following schedule represents the amounts of net revenue and net loss from operations related to Traverse, AAP and Crisp Results acquisitions which have been included in the consolidated statements of operations for the periods indicated subsequent to the acquisition date in the period of acquisition (in thousands):


	Three Months Ended March 31, 2023 (1)
		Traverse
Net revenue		$	824
Net income from operations		$	220

____________________

(1)ClickDealer net revenue and net income from operations for the one day between March 30, 2023 and March 31, 2023 were considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023.


	Three Months Ended March 31, 2022
		AAP		Crisp Results
Net revenue		$	4,073	$	8,238
Net income (loss) from operations		$	(731)	$	839

Pro Forma Information

The following 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 (in thousands):


	Three Months Ended March 31, 2023
	(unaudited)
	DMS		ClickDealer		Pro Forma
Net revenue	$	90,313	$	19,865	$	110,178
Net income (loss) from operations	$	(10,251)	$	1,704	$	(8,547)


	Three Months Ended March 31, 2022
	(unaudited)
	DMS		ClickDealer		Traverse		Pro Forma
Net revenue	$	109,110	$	18,550	$	722	$	128,382
Net income from operations	$	(3,200)	$	1,580	$	17	$	(1,603)

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.

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

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, approximate fair value because of the short-term maturity of those instruments.

Series A and Series B Preferred Warrants

On March 29, 2023, the Company completed a securities purchase agreement (the “SPA”) with certain investors to purchase 80 thousand shares of Series A convertible redeemable Preferred stock (“Series A Preferred stock”) and 60 thousand shares of Series B convertible redeemable Preferred stock (“Series B Preferred stock”, and together with Series A Preferred stock, “Preferred Warrants”) for an aggregate purchase price of $14.0 million, including $6.0 million of related party participation. The Company also issued the purchasers in the Preferred Offering warrants to acquire 14.4 million shares of Class A Common Stock.

The Preferred Warrants are exercisable for shares of the Company’s Class A Common Stock at any time at the option of the holder and expire five years from the date of issuance. The Preferred Warrants are exercisable on a cashless basis or for cash at an exercise price of $0.6453 per share of Class A Common Stock. The exercise price of the Preferred Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, subdivisions, combinations, reclassifications, or similar events affecting the Company’s Common Stock. The Preferred Warrants contain a put feature providing the right to the holder for a net cash settlement in the event of a fundamental transaction, which is defined as instances where the Company (i) effects any merger or consolidation of the Company, (ii) effects any sale, lease, license, assignment, transfer, conveyance, or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) completes any purchase offer, tender offer, or exchange offer that has been accepted by the holders of at least 50% of the outstanding Class A Common Stock, (iv) effects any reclassification, reorganization, or recapitalization of the Class A Common Stock or any compulsory share exchange pursuant to which the Class A Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) consummates a stock or share purchase agreement or other business combination in which more than 50% of the outstanding shares of Class A Common Stock is acquired. Under such a fundamental transaction, the holder can require the Company to purchase any unexercised warrant shares at the pro-rata share of the sales price or calculated value less the exercise price of the Warrant share.

Due to the tender offer provision, the Preferred Warrants are classified as a derivative liability measured at fair value, with changes in fair value reported each period in earnings. The fair value of the warrant is estimated using the Black-Scholes pricing model. The fair value of the Preferred Warrants of approximately $8.7 million was estimated at the date of issuance using the following weighted average assumptions. Transaction costs incurred attributable to the issuance of the Preferred Warrants were part of the preferred shares issuance costs that were 0.9 million.

During the three months ended March 31, 2023, the Company recorded a loss of approximately $4.0 million related to the change in fair value of the warrant liability. The fair value of the Preferred Warrants of approximately $12.7 million was estimated at March 31, 2023.

The fair value of the derivative Preferred Warrants is considered a Level 3 valuation and is determined using the Black-Scholes-Merton valuation model. The change in the value of the derivative Preferred Warrants are shown in the accompanying consolidated statements of operations as “Change in fair value of derivative liabilities”.

The significant assumptions were as follows:


	March 29, 2023			March 31, 2023
	(Issuance Date)			(Fair Value)
Preferred Warrants Fair Value Per Share	$	0.60		$	0.88
Preferred Warrant valuation inputs:
Stock price - DMS Inc. Class A Common Stock	$	0.80		$	1.12

Remaining contractual term in years	5.00			5.00
Estimated volatility	90.0		%	90.0		%
Dividend yield	0.0		%	0.0		%
Risk free interest rate	3.64		%	3.57		%

Private Placement Warrants

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

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

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

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

We record the fair value of the Private Placement Warrants as a liability in our consolidated balance sheet as of March 31, 2023 and 2022, respectively. 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 fair value of warrant liabilities on the consolidated statements of operations. As of March 31, 2023, the Company has approximately 4.0 million Private Placement Warrants outstanding.

The significant assumptions were as follows:


	March 31, 2023
Private Placement Warrants Fair Value Per Share	$	0.08
Private Placement Warrant valuation inputs:
Stock price - DMS Inc. Class A Common Stock	$	1.12

Remaining contractual term in years	2.29
Estimated volatility	90.0		%
Dividend yield	0.0		%
Risk free interest rate	3.95		%

Contingent consideration payable related to acquisitions

The fair value of the contingent considerations payable for the AAP, Traverse and ClickDealer acquisitions (described in Note 5. Acquisitions) were determined using a Monte Carlo fair value analysis and a scenario-based methodology, respectively, 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 “Change in fair value of contingent consideration liabilities” on the consolidated statements of operations.

The contingent consideration payable for the Crisp acquisition was finalized on April 1, 2022, the end of the earnout period. As the full target was met, the payment was made on July 1, 2022 in the form of Class A Common Stock.(See Note 5. Acquisitions).

The following table presents the contingent consideration assumptions.


	Aimtell / PushPros
Revenue Volatility	25	%
Iteration (actual)	100,000
Risk adjustment discount rate	10.50	%
Risk free / Credit risk	12.00	%
Days gap from period end to payment	90

	Traverse
CYE2023 Earnout Successful Probability	95.0	%

Risk free / Credit risk	12.00	%
Days gap from period end to payment	90





	ClickDealer
Revenue Volatility	50	%
Iteration (actual)	100,000
Risk Adjustment Discount Rate	24.75	%
Risk free / Credit risk	12.00	%
Days gap from period end to payment	90

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


		March 31, 2023
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Private placement warrants - Class B common stock	Warrant liabilities	$	—	$	—	$	320	$	320
Preferred warrants - Series A preferred stock	Warrant liabilities	—		—		8,997		8,997
Preferred warrants - Series B preferred stock	Warrant liabilities	—		—		3,714		3,714

Contingent consideration - Aramis	Contingent consideration payable - current	—		—		1,000		1,000
Contingent consideration - Traverse	Contingent consideration payable - current	—		—		466		466
Contingent consideration - ClickDealer	Contingent consideration payable - non-current	—		—		2,457		2,457
Total		$	—	$	—	$	16,954	$	16,954


		March 31, 2022
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Private placement warrants - Class B common stock	Warrant liabilities	$	—	$	—	$	2,120	$	2,120
Contingent consideration - Crisp Results	Contingent consideration payable - current	—		—		10,000		10,000
Contingent consideration - Aramis	Contingent consideration payable - non-current	—		—		917		917

Contingent consideration - Aimtell/PushPros	Contingent consideration payable - non-current	—		—		113		113
Total		$	—	$	—	$	13,150	$	13,150

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


	Private Placement Warrants		Series A and B Preferred Warrants		Contingent Consideration
Balance, January 1, 2023	$	600	$	—	$	1,453
Additions	—		8,667		2,457
Changes in fair value	(280)		4,044		13

Balance, March 31, 2023	$	320	$	12,711	3,923


	Private Placement Warrants		Contingent Consideration
Balance, January 1, 2022	$	3,960	$	8,439

Changes in fair value	(1,840)		2,591

Balance, March 31, 2022	$	2,120	$	11,030

- Definition

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

+ References + Details

Debt - Debt Maturity Schedule (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
2023	$ 1,688
2024	2,250
2025	2,250
2026	254,875
Total debt	$ 261,063	$ 261,625

Fair Value Measurements - Contingent Consideration Assumptions (Details)	Mar. 31, 2023 d
Aimtell / PushPros \| Revenue Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.25
Aimtell / PushPros \| Iteration (actual)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	100,000
Aimtell / PushPros \| Risk adjustment discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.1050
Aimtell / PushPros \| Risk free / Credit risk
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.1200
Aimtell / PushPros \| Days gap from period end to payment
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	90
Traverse \| Risk free / Credit risk
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.1200
Traverse \| Days gap from period end to payment
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	90
Traverse \| CYE2023 Earnout Successful Probability
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.950
ClickDealer \| Revenue Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.50
ClickDealer \| Iteration (actual)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	100,000
ClickDealer \| Risk adjustment discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.2475
ClickDealer \| Risk free / Credit risk
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	0.1200
ClickDealer \| Days gap from period end to payment
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration assumptions	90

Goodwill and Intangible Assets - Amortization Expense (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2023	$ 9,239
2024	10,789
2025	6,264
2026	5,574
2027	4,401
Thereafter	$ 16,562

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Income Tax Examination [Line Items]
Income tax (benefit) expense	$ (13)	$ 310
Effective tax rate	0.10%	(6.10%)
Amount required to be paid to sellers	85.00%
Refund of preclosing taxes to be paid to Sellers	100.00%
Refund of preclosing taxes to be paid to Sellers, period after closing	2 years
Current tax receivable agreement	$ 164		$ 164
DMSH \| DMSH
Income Tax Examination [Line Items]
Equity method investment, ownership percentage	60.90%

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (20,701)	$ (5,357)
Adjustments to reconcile net loss to net cash used in operating activities
Allowance for credit losses	563	532
Depreciation and amortization	5,082	7,060
Amortization of right-of-use assets	242	0
Lease restructuring charges	0	(126)
Stock-based compensation, net of amounts capitalized	1,258	1,842
Amortization of debt issuance costs	390	453
Deferred income tax provision (benefit), net	550	(392)
Change in fair value of contingent consideration	13	2,591
Change in fair value of warrant liabilities	3,764	(1,840)
Loss from preferred warrants issuance	553	0
Change in income tax receivable and payable	(570)	732
Change in accounts receivable	(1,371)	(7,368)
Change in prepaid expenses and other current assets	(657)	1,150
Change in accounts payable and accrued expenses	6,638	(1,263)
Change in operating lease liabilities	(537)	0
Change in other liabilities	0	38
Net cash used in operating activities	(4,783)	(1,948)
Cash flows from investing activities
Additions to property and equipment	(1,215)	(1,617)
Acquisition of business, net of cash acquired	(35,320)	0
Net cash used in investing activities	(36,535)	(1,617)
Cash flows from financing activities
Payments of long-term debt and notes payable	(562)	(563)
Proceeds from preferred shares and warrants issuance, net	13,107	0
Distributions to non-controlling interest holders	0	(563)
Net cash provided by (used in) financing activities	12,545	(1,126)
Net change in cash and cash equivalents	(28,773)	(4,691)
Cash and cash equivalents, beginning of period	48,839	26,394
Cash and cash equivalents, end of period	20,066	21,703
Supplemental Disclosure of Cash Flow Information
Interest	6,349	3,218
Income taxes	7	0
Non-Cash Transactions:
Contingent and deferred acquisition consideration	2,457	2,591
Stock-based compensation capitalized in property and equipment	121	100
Capital expenditures included in accounts payable	$ 176	$ 216

Acquisitions - Net Revenue and Net Income (Loss) Attributable to DMS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Traverse
Business Acquisition [Line Items]
Net revenue	$ 824
Net income (loss) from operations	$ 220
AAP
Business Acquisition [Line Items]
Net revenue		$ 4,073
Net income (loss) from operations		(731)
Crisp Results
Business Acquisition [Line Items]
Net revenue		8,238
Net income (loss) from operations		$ 839

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

The following table summarizes the maturities of undiscounted cash flows of operating lease liabilities reconciled to total lease liability as of March 31, 2023 (in thousands):


	Lease Amounts
2023	$	1,638
2024	1,851
2025	546
Total	4,035
Less: Imputed interest	(126)
Present value of operating lease liabilities	$	3,909

As of March 31, 2023, the operating lease weighted average remaining lease term is 1.9 years and the operating lease weighted average remaining discount rate is 3.74%.

The discount rate for each lease represents the incremental borrowing rate that the Company would incur at commencement of the lease to borrow on a collateralized basis over a similar term and amount equal to lease payments in a similar economic environment.

The following table represents the Company’s aggregate lease costs, by lease classification (in thousands):

Category

Statement of Operations Location

March 31, 2023

Operating lease costs

General and administrative expenses

284

Short-term lease costs

General and administrative expenses

153

Sub-lease income

General and administrative expenses

(179)

Total lease costs, net

258

The rental expense for the three months ended March 31, 2023 and 2022 was $0.4 million and $0.3 million, respectively. As of March 31, 2023 the cash paid for amounts included in the measurement of operating leases was $0.5 million. As part of the Company’s restructuring costs reduction plan, the Company subleased a certain portion of its leased office space. Income from the sublease was $0.2 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively, which is included within General and administrative expenses in the consolidated statements of operations.

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurement Inputs and Valuation Techniques

The significant assumptions were as follows:


	March 29, 2023			March 31, 2023
	(Issuance Date)			(Fair Value)
Preferred Warrants Fair Value Per Share	$	0.60		$	0.88
Preferred Warrant valuation inputs:
Stock price - DMS Inc. Class A Common Stock	$	0.80		$	1.12

Remaining contractual term in years	5.00			5.00
Estimated volatility	90.0		%	90.0		%
Dividend yield	0.0		%	0.0		%
Risk free interest rate	3.64		%	3.57		%

The significant assumptions were as follows:


	March 31, 2023
Private Placement Warrants Fair Value Per Share	$	0.08
Private Placement Warrant valuation inputs:
Stock price - DMS Inc. Class A Common Stock	$	1.12

Remaining contractual term in years	2.29
Estimated volatility	90.0		%
Dividend yield	0.0		%
Risk free interest rate	3.95		%

The following table presents the contingent consideration assumptions.


	Aimtell / PushPros
Revenue Volatility	25	%
Iteration (actual)	100,000
Risk adjustment discount rate	10.50	%
Risk free / Credit risk	12.00	%
Days gap from period end to payment	90

	Traverse
CYE2023 Earnout Successful Probability	95.0	%

Risk free / Credit risk	12.00	%
Days gap from period end to payment	90





	ClickDealer
Revenue Volatility	50	%
Iteration (actual)	100,000
Risk Adjustment Discount Rate	24.75	%
Risk free / Credit risk	12.00	%
Days gap from period end to payment	90

Fair Value Measurements, Recurring and Nonrecurring

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


		March 31, 2023
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Private placement warrants - Class B common stock	Warrant liabilities	$	—	$	—	$	320	$	320
Preferred warrants - Series A preferred stock	Warrant liabilities	—		—		8,997		8,997
Preferred warrants - Series B preferred stock	Warrant liabilities	—		—		3,714		3,714

Contingent consideration - Aramis	Contingent consideration payable - current	—		—		1,000		1,000
Contingent consideration - Traverse	Contingent consideration payable - current	—		—		466		466
Contingent consideration - ClickDealer	Contingent consideration payable - non-current	—		—		2,457		2,457
Total		$	—	$	—	$	16,954	$	16,954


		March 31, 2022
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Liabilities:
Private placement warrants - Class B common stock	Warrant liabilities	$	—	$	—	$	2,120	$	2,120
Contingent consideration - Crisp Results	Contingent consideration payable - current	—		—		10,000		10,000
Contingent consideration - Aramis	Contingent consideration payable - non-current	—		—		917		917

Contingent consideration - Aimtell/PushPros	Contingent consideration payable - non-current	—		—		113		113
Total		$	—	$	—	$	13,150	$	13,150

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):


	Private Placement Warrants		Series A and B Preferred Warrants		Contingent Consideration
Balance, January 1, 2023	$	600	$	—	$	1,453
Additions	—		8,667		2,457
Changes in fair value	(280)		4,044		13

Balance, March 31, 2023	$	320	$	12,711	3,923


	Private Placement Warrants		Contingent Consideration
Balance, January 1, 2022	$	3,960	$	8,439

Changes in fair value	(1,840)		2,591

Balance, March 31, 2022	$	2,120	$	11,030

- Definition

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

+ References + Details

Fair Value Measurements - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Mar. 29, 2023	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt instrument, face amount	$ 14,000
Warrants, term		5 years
Issuance costs		$ 900
Warrant exercise price (usd per share)		$ 0.01
Minimum number of redemption days		30 days
Trading day threshold		20 days
Trading day period		30 days
Convertible Debenture \| Convertible Debt
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt instrument, face amount	$ 6,000
Class A Common Stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Preferred stock (in shares)	14,400,000
Warrants, term	5 years
Common stock par value (usd per share)	$ 0.6453	$ 0.0001
Acceptance percentage threshold	50.00%
Threshold percentage of shares acquired	50.00%
Share price (usd per share)		$ 18.00
Series B Preferred Stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Preferred stock outstanding (in shares)		60,000		60,000
Preferred stock issued (in shares)		60,000		60,000
Class A Common Stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Number of securities called by each warrant		1
Warrant exercise price (usd per share)		$ 11.50
Series A and B Preferred Warrants
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Additions		$ 8,667
Changes in fair value		4,044
Preferred warrants		12,711		$ 0
Private placement warrants - Class B common stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Additions		0
Changes in fair value		(280)	$ (1,840)
Preferred warrants		$ 320	$ 2,120	$ 600	$ 3,960
Warrants outstanding (in shares)		4,000,000

Acquisitions - Net Assets And Liabilities Acquired (Details) - USD ($) $ in Thousands			3 Months Ended
	Mar. 30, 2023	May 10, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Expected Useful Life			8 years
Goodwill			$ 83,445		$ 77,238
Minimum
Business Acquisition [Line Items]
Expected useful life of acquired property, plant and equipment				3 years
Maximum
Business Acquisition [Line Items]
Expected useful life of acquired property, plant and equipment				5 years
Technology
Business Acquisition [Line Items]
Expected Useful Life			6 years
Technology \| Minimum
Business Acquisition [Line Items]
Expected Useful Life			4 years
Technology \| Maximum
Business Acquisition [Line Items]
Expected Useful Life			7 years
Customer relationships
Business Acquisition [Line Items]
Expected Useful Life			10 years
Customer relationships \| Minimum
Business Acquisition [Line Items]
Expected Useful Life				4 years
Customer relationships \| Maximum
Business Acquisition [Line Items]
Expected Useful Life				15 years
Brand
Business Acquisition [Line Items]
Expected Useful Life			6 years
Brand \| Minimum
Business Acquisition [Line Items]
Expected Useful Life				1 year
Brand \| Maximum
Business Acquisition [Line Items]
Expected Useful Life				7 years
Non-competition agreements
Business Acquisition [Line Items]
Expected Useful Life			3 years
Non-competition agreements \| Minimum
Business Acquisition [Line Items]
Expected Useful Life			1 year
Non-competition agreements \| Maximum
Business Acquisition [Line Items]
Expected Useful Life			3 years
AAP
Business Acquisition [Line Items]
Expected Useful Life			4 years
Cash						$ 0
Goodwill						9,761
Accounts receivable						3,100
Property and equipment						250
Accounts payable						(2,887)
Other assets acquired and liabilities assumed, net						740
Net assets and liabilities acquired						22,845
AAP \| Technology
Business Acquisition [Line Items]
Expected Useful Life			4 years
Finite-lived intangible assets acquired						3,900
AAP \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life			4 years 1 month 6 days
Finite-lived intangible assets acquired						7,690
AAP \| Brand
Business Acquisition [Line Items]
Expected Useful Life			2 years 1 month 6 days
Finite-lived intangible assets acquired						208
AAP \| Non-competition agreements
Business Acquisition [Line Items]
Expected Useful Life			3 years
Finite-lived intangible assets acquired						83
Crisp Results
Business Acquisition [Line Items]
Expected Useful Life			5 years 7 months 6 days
Cash						0
Goodwill						21,894
Accounts receivable						2,610
Property and equipment						220
Accounts payable						(1,593)
Other assets acquired and liabilities assumed, net						1
Net assets and liabilities acquired						50,132
Crisp Results \| Technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired						0
Crisp Results \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life			6 years
Finite-lived intangible assets acquired						19,600
Crisp Results \| Brand
Business Acquisition [Line Items]
Expected Useful Life			7 years
Finite-lived intangible assets acquired						7,400
Crisp Results \| Non-competition agreements
Business Acquisition [Line Items]
Finite-lived intangible assets acquired						$ 0
Traverse
Business Acquisition [Line Items]
Expected Useful Life			5 years
Cash				$ 232
Goodwill		$ 444	$ 735	735
Accounts receivable				276
Property and equipment				0
Accounts payable				(232)
Other assets acquired and liabilities assumed, net				7
Net assets and liabilities acquired				3,598
Traverse \| Technology
Business Acquisition [Line Items]
Expected Useful Life		5 years	5 years
Finite-lived intangible assets acquired		$ 2,500	$ 2,470	2,470
Traverse \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life		5 years	5 years
Finite-lived intangible assets acquired		$ 50	$ 50	50
Traverse \| Brand
Business Acquisition [Line Items]
Expected Useful Life		3 years	3 years
Finite-lived intangible assets acquired		$ 59	$ 60	60
Traverse \| Non-competition agreements
Business Acquisition [Line Items]
Expected Useful Life			1 year
Finite-lived intangible assets acquired		$ 3	$ 0	0
ClickDealer
Business Acquisition [Line Items]
Expected Useful Life			13 years
Cash				0
Goodwill	$ 6,207			6,207
Accounts receivable				7,452
Property and equipment				0
Accounts payable				(4,357)
Other assets acquired and liabilities assumed, net				225
Net assets and liabilities acquired				37,777
ClickDealer \| Technology
Business Acquisition [Line Items]
Expected Useful Life	5 years		7 years
Finite-lived intangible assets acquired	$ 5,010			5,010
ClickDealer \| Customer relationships
Business Acquisition [Line Items]
Expected Useful Life	15 years		15 years
Finite-lived intangible assets acquired	$ 20,400			20,400
ClickDealer \| Brand
Business Acquisition [Line Items]
Expected Useful Life	7 years		5 years
Finite-lived intangible assets acquired	$ 2,840			2,840
ClickDealer \| Non-competition agreements
Business Acquisition [Line Items]
Finite-lived intangible assets acquired				$ 0

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Net revenue	$ 90,313	$ 109,110
Cost of revenue (exclusive of depreciation and amortization)	68,042	77,834
Salaries and related costs	12,226	13,705
General and administrative expenses	12,856	11,107
Depreciation and amortization	5,082	7,060
Acquisition costs	2,345	13
Change in fair value of contingent consideration liabilities	13	2,591
Loss from operations	(10,251)	(3,200)
Interest expense	6,699	3,687
Change in fair value of warrant liabilities	3,764	(1,840)
Net loss before income taxes	(20,714)	(5,047)
Income tax (benefit) expense	(13)	310
Net loss	(20,701)	(5,357)
Net loss attributable to non-controlling interest	(8,103)	(2,223)
Net loss attributable to Digital Media Solutions, Inc.	$ (12,598)	$ (3,134)
Weighted-average shares outstanding - basic (in shares)	39,957	35,576
Weighted-average shares outstanding - diluted (in shares)	39,957	35,576
Loss per share attributable to Digital Media Solutions, Inc.:
Basic (usd per share)	$ (0.32)	$ (0.09)
Diluted (usd per share)	$ (0.32)	$ (0.09)

Equity (Details)	Mar. 29, 2023 trading_day $ / shares shares	Mar. 31, 2023 $ / shares shares
Class of Stock [Line Items]
Preferred stock, authorized (in shares) \| shares		100,000,000
Warrant exercise price (usd per share)		$ 0.01
Preferred stock, fair value of discount rate	11.00%
Dividend rate	4.00%
Preferred stock, convertible, conversion price (usd per share)	$ 0.56
Percentage of alternate conversion price	90.00%
Convertible threshold trading days \| trading_day	20
Percentage of trading days prior to conversion rate	90.00%
Conversion floor price	$ 0.484
Conversion effective percentage	4.99%
Issuance of effective percentage	9.99%
Redemption percentage requirement	10.00%
Redemption price percentage	116.00%
Redemption price per share (usd per share)	$ 100
Percentage of accelerated redemption price	90.00%
Mandatory redemption trading days \| trading_day	20
Percentage of trading days prior to mandatory redemption rate	90.00%
Accelerated redemption trading days \| trading_day	20
Percentage of trading days prior to accelerated redemption rate	90.00%
Percentage of triggered optional redemption price	30.00%
Percentage of default redemption price	115.00%
Percentage of bankruptcy redemption price	115.00%
Percentage of change of control redemption price	115.00%
Class A Common Stock
Class of Stock [Line Items]
Number of securities called by each warrant \| shares		1
Warrant exercise price (usd per share)		$ 11.50
Convertible, threshold percentage of stock price	20.00%
Convertible due, threshold percentage	1.00%
Series A Preferred Stock
Class of Stock [Line Items]
Warrants issued (in shares) \| shares	80,000
Conversion floor price	$ 0.161
Liquidation rights of percentage	128.00%
Preferred stock, liquidation preference per share (usd per share)	$ 100
Series B Preferred Stock
Class of Stock [Line Items]
Warrants issued (in shares) \| shares	60,000
Liquidation rights of percentage	128.00%
Preferred stock, liquidation preference per share (usd per share)	$ 100
Class A Common Stock \| Series A Warrant
Class of Stock [Line Items]
Number of securities called by each warrant \| shares	1
Warrants exercised (in shares) \| shares	8,253,968
Warrant exercise price (usd per share)	$ 100
Class A Common Stock \| Series B Warrant
Class of Stock [Line Items]
Number of securities called by each warrant \| shares	1
Warrants exercised (in shares) \| shares	6,190,476

Acquisitions (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Changes in Fair Value of Assets Acquired and Liabilities Assumed as Part of Business Combination

As of March 30, 2023, the acquisition date, the fair value of the intangibles, contingent consideration liability and working capital accounts are as follows (in thousands):


ClickDealer	Acquisition Date Fair Value
Goodwill	$	6,207
Intangible Assets:
Technology	$	5,010
Customer relationships	$	20,400
Brand	$	2,840


Contingent consideration liability	$	2,457

Working capital accounts	$	3,320

The impact of these adjustments are as follows (in thousands):


Traverse	Acquisition Date Fair Value		Fair Value Mark-to-Market Changes		Revised Acquisition Date Fair Value
Goodwill	$	444	$	291	$	735
Intangible Assets:
Technology	$	2,500	$	(30)	$	2,470
Customer relationships	$	50	$	—	$	50
Brand	$	59	$	1	$	60
Non-competition agreements	$	3	$	(3)	$	—

Contingent consideration liability	$	428	$	3	$	431

Working capital accounts	$	(49)	$	333	$	284

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The acquisition date fair value of assets acquired and liabilities assumed from the AAP, Crisp Results and Traverse acquisitions consist of the following (in thousands):


	Expected Useful Life	AAP		Crisp Results		Traverse		ClickDealer
		2021		2021		2022		2023
Cash		$	—	$	—	$	232	$	—
Goodwill		9,761		21,894		735		6,207
Technology	4 to 7	3,900		—		2,470		5,010
Customer relationships	4 to 15	7,690		19,600		50		20,400
Accounts receivable		3,100		2,610		276		7,452
Brand	1 to 7	208		7,400		60		2,840
Non-competitive agreements	1 to 3	83		—		—		—
Property and equipment	3 to 5	250		220		—		—
Accounts payable		(2,887)		(1,593)		(232)		(4,357)
Other assets acquired and liabilities assumed, net (1)		740		1		7		225
Net assets and liabilities acquired		$	22,845	$	50,132	$	3,598	$	37,777

____________________

Schedule of Business Acquisitions, by Acquisition


	Three Months Ended March 31, 2023 (1)
		Traverse
Net revenue		$	824
Net income from operations		$	220

____________________


	Three Months Ended March 31, 2022
		AAP		Crisp Results
Net revenue		$	4,073	$	8,238
Net income (loss) from operations		$	(731)	$	839

Pro Forma Information


	Three Months Ended March 31, 2023
	(unaudited)
	DMS		ClickDealer		Pro Forma
Net revenue	$	90,313	$	19,865	$	110,178
Net income (loss) from operations	$	(10,251)	$	1,704	$	(8,547)


	Three Months Ended March 31, 2022
	(unaudited)
	DMS		ClickDealer		Traverse		Pro Forma
Net revenue	$	109,110	$	18,550	$	722	$	128,382
Net income from operations	$	(3,200)	$	1,580	$	17	$	(1,603)

Fair Value Measurements - Inputs and Valuations (Details)	Mar. 31, 2023 $ / shares yr	Mar. 29, 2023 $ / shares yr
Private Placement Warrants Fair Value Per Share
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.08
Private Placement Warrants Fair Value Per Share \| Series A and B Preferred Warrants
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.88	0.60
Stock price - DMS Inc. Class A Common Stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	1.12
Stock price - DMS Inc. Class A Common Stock \| Series A and B Preferred Warrants
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	1.12	0.80
Remaining contractual term in years
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs \| yr	2.29
Remaining contractual term in years \| Series A and B Preferred Warrants
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs \| yr	5.00	5.00
Estimated volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.900
Estimated volatility \| Series A and B Preferred Warrants
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.900	0.900
Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.000
Dividend yield \| Series A and B Preferred Warrants
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.000	0.000
Risk free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.0395
Risk free interest rate \| Series A and B Preferred Warrants
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants outstanding, measurement inputs	0.0357	0.0364

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

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


	Brand Direct		Marketplace		Technology Solutions		Total
Balance, December 31, 2022	$	18,321	$	54,554	$	4,363	$	77,238
Additions (Note 5)	—		—		6,207		6,207


Balance, March 31, 2023	$	18,321	$	54,554	$	10,570	$	83,445

The carrying amount of Goodwill for all reporting units had no accumulated impairments as of March 31, 2023 and December 31, 2022.

Intangible assets, net

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


		March 31, 2023						December 31, 2022
	Amortization Period (Years)	Gross		Impairment		Accumulated Amortization		Net		Gross		Impairment		Accumulated Amortization		Net
Technology	4 to 7	$	59,326	$	(5,933)	$	(40,865)	$	12,528	$	54,316	$	(5,933)	$	(39,411)	$	8,972
Customer relationships	4 to 15	69,823		(12,387)		(22,424)		35,012		49,423		(12,387)		(21,205)		15,831
Brand	1 to 7	15,009		(3,250)		(6,493)		5,266		12,169		(3,250)		(6,233)		2,686
Non-competition agreements	1	1,898		—		(1,875)		23		1,898		—		(1,868)		30
Total		$	146,056	$	(21,570)	$	(71,657)	$	52,829	$	117,806	$	(21,570)	$	(68,717)	$	27,519

The weighted average amortization period for intangible assets is 8 years in total, and by category is 6 years for technology, 10 years for customer relationships, 6 years for brand, 3 years for non-competition agreements.

Amortization expense relating to intangible assets subject to amortization for each of the next five years and thereafter is estimated to be as follows (in thousands):


	2023		2024		2025		2026		2027		Thereafter
Amortization expense	$	9,239	$	10,789	$	6,264	$	5,574	$	4,401	$	16,562

Amortization expense for finite-lived intangible assets is recorded on an accelerated straight-line basis. Amortization expense related to finite-lived intangible assets was $2.9 million and $4.9 million for the three months ended March 31, 2023 and 2022, respectively.

Impairment analysis

Related to goodwill impairment, the Company considered if an event occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount noting none in the three months ended March 31, 2023 and 2022, respectively. Related to intangibles impairment, the Company noted no triggering events in the three months ended March 31, 2023 and 2022, respectively.

For the three months ended March 31, 2023 and 2022, respectively, there was no impairment to intangible assets.

Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
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 U.S. Securities and Exchange Commission (“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 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	Business Combination On July 15, 2020, Digital Media Solutions Holding (“DMSH”) consummated the Business Combination with Leo Holdings Corp. (“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 60.9% 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 39.1% 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 2022 Form 10-K/A.
Non-controlling Interest	Non-controlling Interest The non-controlling interest represents the membership interest in DMSH held by holders other than the Company. As of March 31, 2023, the Prism, Clairvest Direct Sellers and SmarterChaos combined ownership percentage in DMSH was 39.1% and as of December 31, 2022 it was 39.1%.
Principles of Consolidation	Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported as separate financial statement line items in the consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the fair value of preferred warrants, private placement warrants, the allowance for credit losses, stock-based compensation, fair value of intangibles acquired in business combinations, loss contingencies, contingent consideration liabilities, asset impairments, and deferred taxes and amounts associated with the Tax Receivable Agreement.
Reclassifications	Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes.
New Accounting Standards	New Accounting Standards Accounting Standards Recently Adopted In June 2016, the FASB issued authoritative guidance ASC 326 Financial Instruments - Credit Losses, regarding the impairment model known as the current expected credit loss (“CECL”) model 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 CECL 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 emerging growth companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2023, which was not material to the consolidated financial statements for the three months ended March 31, 2023. Accounting Standards Not Yet Adopted The Company qualifies as an “emerging growth company” and 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.
Earnings per share	Basic earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. adjusted for the income effects of dilutive instruments by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements.

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

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


	March 31, 2023		December 31, 2022
Term loan	$	221,063	$	221,625
Revolving credit facility	40,000		40,000


Total debt	261,063		261,625
Less: Unamortized debt issuance costs (1)	(4,455)		(4,802)
Debt, net	256,608		256,823
Less: Current portion of long-term debt	(2,250)		(2,250)
Long-term debt	$	254,358	$	254,573

____________________

(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 1.80% or $4.2 million, is 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. The Term Loan bears interest at our option, at either (i) adjusted LIBOR plus 5.00% or (ii) the Base Rate plus 4.00%. Since May 25, 2021 our interest rate is based on LIBOR plus 5.00%. For the three months ended March 31, 2023, the effective interest rate was 10.36%.

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) the 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%. Under the Revolving Facility, DMS LLC pays a 0.50% per annum commitment fee in arrears on the undrawn portion of the revolving commitments.

Since May 25, 2021 our interest rate is based on LIBOR plus 5.00%. The Company drew $5.0 million and $35.0 million on October 4, 2022 and December 29, 2022, respectively. For the three months ended March 31, 2023, the effective interest rate was 8.33%.

The initial $4.2 million debt discount and $3.5 million debt issuance cost related to the Term Loan and Revolving Facility is being amortized over the term of the loan using the effective interest method. As of March 31, 2023, the Term Loan debt discount and debt issuance cost classified as debt had a remaining unamortized balance of $2.7 million and $1.7 million, respectively. As of December 31, 2022, the Term Loan debt discount and debt issuance cost included in the carrying value of the debt had a remaining unamortized balance of $3.7 million and $2.4 million, respectively. At March 31, 2023 and December 31, 2022, the unamortized debt issuance cost of $0.5 million and $0.8 million, respectively, associated with the Revolving Facility is classified and amortized as Other assets within the consolidated balance sheets.

The Company’s ability to borrow amounts under the Credit Facility is conditioned upon its compliance with specified covenants, including certain reporting covenants and financial covenants that, in addition to other items, require the Company to maintain a maximum net leverage ratio (ratio of total debt borrowed by the Company to EBITDA for the four consecutive fiscal quarters most recently ended, subject to certain adjustments set forth in the Credit Facility) not to exceed 4.5:1.0 on the last day of the quarter ended March 31, 2023, which net leverage ratio is adjusted for subsequent quarters as set forth in the Credit Facility. In the event the Company breaches the net leverage ratio, the Company may cure such breach by raising capital through the sale of equity, which capital will be added on a dollar-for-dollar basis to the calculation of EBITDA for purposes of such test period to determine compliance with the financial covenant. As of December 31, 2022, the Company was in breach of the net leverage ratio, which it cured on March 30, 2023 through the funds received in connection with the issuance of Series A and Series B convertible Preferred stock and Warrants. As of March 31, 2023, the Company was in material compliance with all financial covenants.

Debt Maturity Schedule

The scheduled maturities of our total debt are estimated as follows at March 31, 2023 (in thousands):



2023	$	1,688
2024	2,250
2025	2,250
2026	254,875



Total debt	$	261,063

- Definition

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.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended
Reportable Segments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Net revenue	$ 90,313	$ 109,110
Cost of revenue (exclusive of depreciation and amortization)	68,042	77,834
Gross profit (exclusive of depreciation and amortization)	22,271	31,276
Salaries and related costs	12,226	13,705
General and administrative expenses	12,856	11,107
Depreciation and amortization	5,082	7,060
Acquisition costs	2,345	13
Change in fair value of contingent consideration liabilities	13	2,591
Loss from operations	(10,251)	(3,200)
Intercompany eliminations
Segment Reporting Information [Line Items]
Net revenue	(4,714)	(13,260)
Cost of revenue (exclusive of depreciation and amortization)	(4,714)	(13,260)
Brand Direct
Segment Reporting Information [Line Items]
Net revenue	55,403	61,228
Brand Direct \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	55,403	61,228
Cost of revenue (exclusive of depreciation and amortization)	42,816	48,448
Gross profit (exclusive of depreciation and amortization)	12,587	12,780
Marketplace
Segment Reporting Information [Line Items]
Net revenue	37,288	58,806
Marketplace \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	37,288	58,806
Cost of revenue (exclusive of depreciation and amortization)	29,338	42,380
Gross profit (exclusive of depreciation and amortization)	7,950	16,426
Technology Solutions
Segment Reporting Information [Line Items]
Net revenue	2,336	2,336
Technology Solutions \| Operating Segments
Segment Reporting Information [Line Items]
Net revenue	2,336	2,336
Cost of revenue (exclusive of depreciation and amortization)	602	266
Gross profit (exclusive of depreciation and amortization)	$ 1,734	$ 2,070

Business, Basis of Presentation and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business, Basis of Presentation and Summary of Significant Accounting Policies	Business, Basis of Presentation and 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. 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 U.S. Securities and Exchange Commission (“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 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 On July 15, 2020, Digital Media Solutions Holding (“DMSH”) consummated the Business Combination with Leo Holdings Corp. (“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 60.9% 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 39.1% 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 2022 Form 10-K/A. Non-controlling Interest The non-controlling interest represents the membership interest in DMSH held by holders other than the Company. As of March 31, 2023, the Prism, Clairvest Direct Sellers and SmarterChaos combined ownership percentage in DMSH was 39.1% and as of December 31, 2022 it was 39.1%. Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported as separate financial statement line items in the consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the fair value of preferred warrants, private placement warrants, the allowance for credit losses, stock-based compensation, fair value of intangibles acquired in business combinations, loss contingencies, contingent consideration liabilities, asset impairments, and deferred taxes and amounts associated with the Tax Receivable Agreement. Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes. Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in Note 1. Business, Basis of Presentation and Summary of Significant Accounting Policies in our 2022 Form 10-K/A except those related to the accounting and valuation of preferred stock and warrants. See Note 8. Fair Value Measurements and Note 9. Equity. New Accounting Standards Accounting Standards Recently Adopted In June 2016, the FASB issued authoritative guidance ASC 326 Financial Instruments - Credit Losses, regarding the impairment model known as the current expected credit loss (“CECL”) model 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 CECL 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 emerging growth companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2023, which was not material to the consolidated financial statements for the three months ended March 31, 2023. Accounting Standards Not Yet Adopted The Company qualifies as an “emerging growth company” and 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. As of March 31, 2023, there were no new accounting standards that would need to be disclosed.

Revenue - Additional Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Contract with customer, liability	$ 0.5		$ 1.0
Customer1 \| Revenue from Contract with Customer, Product and Service Benchmark \| Customer Concentration Risk
Disaggregation of Revenue [Line Items]
Concentration risk	16.60%	18.10%

Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

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


	Three Months Ended March 31, 2023
	Brand Direct (1)		Marketplace		Technology Solutions		Intercompany eliminations		Total
Net revenue:
Customer acquisition	$	54,020	$	37,288	$	—	$	(4,714)	$	86,594
Managed services	1,383		—		753		—		2,136
Software services	—		—		1,583		—		1,583
Total Net revenue	$	55,403	$	37,288	$	2,336	$	(4,714)	$	90,313

____________________

(1)ClickDealer net revenue for the one day between March 30, 2023 and March 31, 2023 was considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023.


	Three Months Ended March 31, 2022
	Brand Direct		Marketplace		Technology Solutions		Intercompany eliminations		Total
Net revenue:
Customer acquisition	$	59,619	$	58,806	$	—	$	(13,260)	$	105,165
Managed services	1,609		—		1,510		—		3,119
Software services	—		—		826		—		826
Total Net revenue	$	61,228	$	58,806	$	2,336	$	(13,260)	$	109,110

Schedule of Allowance for Credit Loss

The activity in the Allowance for credit losses is as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Balance, beginning of period	$	4,656	$	4,930
Additions charged to costs and expenses	483		529
Deductions/write-offs	398		—
ASU 2016-13 (Topic 326) adjustment	44		—
Balance, end of period	$	4,785	$	5,459

Revenue

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

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


	Three Months Ended March 31, 2023
	Brand Direct (1)		Marketplace		Technology Solutions		Intercompany eliminations		Total
Net revenue:
Customer acquisition	$	54,020	$	37,288	$	—	$	(4,714)	$	86,594
Managed services	1,383		—		753		—		2,136
Software services	—		—		1,583		—		1,583
Total Net revenue	$	55,403	$	37,288	$	2,336	$	(4,714)	$	90,313

____________________


	Three Months Ended March 31, 2022
	Brand Direct		Marketplace		Technology Solutions		Intercompany eliminations		Total
Net revenue:
Customer acquisition	$	59,619	$	58,806	$	—	$	(13,260)	$	105,165
Managed services	1,609		—		1,510		—		3,119
Software services	—		—		826		—		826
Total Net revenue	$	61,228	$	58,806	$	2,336	$	(13,260)	$	109,110

Accounts Receivable, net

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its Allowance for credit losses monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers.

The activity in the Allowance for credit losses is as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Balance, beginning of period	$	4,656	$	4,930
Additions charged to costs and expenses	483		529
Deductions/write-offs	398		—
ASU 2016-13 (Topic 326) adjustment	44		—
Balance, end of period	$	4,785	$	5,459

Contract Balances

The Company’s contract liabilities result from payments received from clients in advance of revenue recognition as they precede the Company’s satisfaction of the associated performance obligation. If a customer pays consideration before the Company’s performance obligations are satisfied, such amounts are classified as deferred revenue on the unaudited consolidated balance sheets. As of March 31, 2023 and December 31, 2022, the balance of deferred revenue was $0.5 million and $1.0 million, respectively, and is recorded within “Accrued expenses and other current liabilities” on the unaudited consolidated balance sheets. We expect the majority of the deferred revenue balance at March 31, 2023 to be recognized as revenue during the following quarter.

For the three months ended March 31, 2023 and 2022, one customer accounted for approximately 16.6% and 18.1%, respectively, of our total revenues.

- Definition

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

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+ Details

Fair Value Measurements - Level 3 Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Contingent Consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 1,453	$ 8,439
Additions	2,457
Changes in fair value	13	2,591
Ending balance	3,923	11,030
Private placement warrants - Class B common stock
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	600	3,960
Additions	0
Changes in fair value	(280)	(1,840)
Ending balance	320	$ 2,120
Series A and B Preferred Warrants
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	0
Additions	8,667
Changes in fair value	4,044
Ending balance	$ 12,711

Leases - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
Leases - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating lease, weighted average remaining lease term	1 year 10 months 24 days
Operating lease weighted average remaining discount rate	3.74%
Operating lease expense	$ 400	$ 300
Operating cash flows used in operating leases	500
Sublease income	$ 179	$ 100

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2023
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 60.9% 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 and Traverse, 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, and the activities of UE and Traverse, wholly-owned U.S. corporate subsidiaries 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 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 benefit of $(0.01) million for the three months ended March 31, 2023. The blended effective tax rate for the three months ended March 31, 2023 was 0.1%, which varies from our statutory U.S. tax rate due to taxable income or loss that is allocated to the non-controlling interest and impact of the valuation allowance on DMS, Inc. The Company recorded $0.3 million income tax expense for the three months ended March 31, 2022. The blended effective tax rate for the three months ended March 31, 2022 was (6.1)%, 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 (“TRA”) 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 March 31, 2023 and December 31, 2022, the Company recorded a full valuation allowance on our deferred tax asset (“DTA”) related to the TRA along with the entire DTA inventory at DMS, Inc. and Blocker. At March 31, 2023, the remaining current portion of Tax Receivable Agreement liability of $0.2 million is attributable to carryback claims. We will continue to evaluate the positive and negative evidence in determining the realizability of the Company’s DTAs.

- Definition

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

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+ Details

Goodwill and Intangible Assets - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross	$ 146,056	$ 117,806
Impairment	(21,570)	(21,570)
Accumulated Amortization	(71,657)	(68,717)
Net	52,829	27,519
Technology
Finite-Lived Intangible Assets [Line Items]
Gross	59,326	54,316
Impairment	(5,933)	(5,933)
Accumulated Amortization	(40,865)	(39,411)
Net	$ 12,528	8,972
Technology \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	4 years
Technology \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	7 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross	$ 69,823	49,423
Impairment	(12,387)	(12,387)
Accumulated Amortization	(22,424)	(21,205)
Net	$ 35,012	15,831
Customer relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	4 years
Customer relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization Period (Years)	15 years
Brand
Finite-Lived Intangible Assets [Line Items]
Gross	$ 15,009	12,169
Impairment	(3,250)	(3,250)
Accumulated Amortization	(6,493)	(6,233)
Net	$ 5,266	2,686
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)	1 year
Gross	$ 1,898	1,898
Impairment	0	0
Accumulated Amortization	(1,875)	(1,868)
Net	$ 23	$ 30

Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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


	March 31, 2023		December 31, 2022
Term loan	$	221,063	$	221,625
Revolving credit facility	40,000		40,000


Total debt	261,063		261,625
Less: Unamortized debt issuance costs (1)	(4,455)		(4,802)
Debt, net	256,608		256,823
Less: Current portion of long-term debt	(2,250)		(2,250)
Long-term debt	$	254,358	$	254,573

____________________

(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 March 31, 2023 (in thousands):



2023	$	1,688
2024	2,250
2025	2,250
2026	254,875



Total debt	$	261,063

- Definition

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

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-URI https://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21475-112644

+ Details

Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total debt	$ 261,063	$ 261,625
Less: Unamortized debt issuance costs	(4,455)	(4,802)
Debt, net	256,608	256,823
Less: Current portion of long-term debt	(2,250)	(2,250)
Long-term debt	254,358	254,573
Term loan
Debt Instrument [Line Items]
Total debt	221,063	221,625
Revolving credit facility
Debt Instrument [Line Items]
Total debt	$ 40,000	$ 40,000

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Fair Value Measurements - Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	$ 13,031	$ 600
Contingent consideration payable - current	1,466	1,453
Contingent consideration payable - non-current	2,457	0
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	16,954		$ 13,150
Fair Value, Recurring \| Aramis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	1,000
Contingent consideration payable - non-current			917
Fair Value, Recurring \| Traverse
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	466
Fair Value, Recurring \| ClickDealer
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current	2,457
Fair Value, Recurring \| Crisp Results
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current			10,000
Fair Value, Recurring \| Aimtell / PushPros
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current		113
Fair Value, Recurring \| Private placement warrants - Class B common stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	320		2,120
Fair Value, Recurring \| Preferred warrants - Series A preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	8,997
Fair Value, Recurring \| Preferred warrants - Series B preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	3,714
Fair Value, Recurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0		0
Fair Value, Recurring \| Level 1 \| Aramis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	0
Contingent consideration payable - non-current			0
Fair Value, Recurring \| Level 1 \| Traverse
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	0
Fair Value, Recurring \| Level 1 \| ClickDealer
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current	0
Fair Value, Recurring \| Level 1 \| Crisp Results
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current			0
Fair Value, Recurring \| Level 1 \| Aimtell / PushPros
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current		0
Fair Value, Recurring \| Level 1 \| Private placement warrants - Class B common stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	0		0
Fair Value, Recurring \| Level 1 \| Preferred warrants - Series A preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	0
Fair Value, Recurring \| Level 1 \| Preferred warrants - Series B preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	0
Fair Value, Recurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0		0
Fair Value, Recurring \| Level 2 \| Aramis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	0
Contingent consideration payable - non-current			0
Fair Value, Recurring \| Level 2 \| Traverse
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	0
Fair Value, Recurring \| Level 2 \| ClickDealer
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current	0
Fair Value, Recurring \| Level 2 \| Crisp Results
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current			0
Fair Value, Recurring \| Level 2 \| Aimtell / PushPros
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current		0
Fair Value, Recurring \| Level 2 \| Private placement warrants - Class B common stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	0		0
Fair Value, Recurring \| Level 2 \| Preferred warrants - Series A preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	0
Fair Value, Recurring \| Level 2 \| Preferred warrants - Series B preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	0
Fair Value, Recurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	16,954		13,150
Fair Value, Recurring \| Level 3 \| Aramis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	1,000
Contingent consideration payable - non-current			917
Fair Value, Recurring \| Level 3 \| Traverse
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current	466
Fair Value, Recurring \| Level 3 \| ClickDealer
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current	2,457
Fair Value, Recurring \| Level 3 \| Crisp Results
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - current			10,000
Fair Value, Recurring \| Level 3 \| Aimtell / PushPros
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration payable - non-current		$ 113
Fair Value, Recurring \| Level 3 \| Private placement warrants - Class B common stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	320		$ 2,120
Fair Value, Recurring \| Level 3 \| Preferred warrants - Series A preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	8,997
Fair Value, Recurring \| Level 3 \| Preferred warrants - Series B preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	$ 3,714