ias-20210930


(IN THOUSANDS, EXCEPT SHARE AND UNIT DATA)	September 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	63,777	$	51,734
Restricted cash	213		187
Accounts receivable, net	45,589		45,418
Unbilled receivables	27,128		28,083
Prepaid expenses and other current assets	10,154		4,101
Total current assets	146,861		129,523
Property and equipment, net	1,417		2,243
Internal use software, net	17,511		12,322
Intangible assets, net	265,303		243,348
Goodwill	649,780		458,586
Other long-term assets	4,010		3,557
Total assets	$	1,084,882	$	849,579
LIABILITIES AND MEMBERS’/STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	43,099	$	38,789
Due to related party	62		150
Capital leases payable	50		325
Deferred revenue	568		1,144
Total current liabilities	43,779		40,408
Accrued rent	1,754		1,827
Net deferred tax liability	53,035		24,794
Long-term debt	232,682		351,071
Total liabilities	331,250		418,100
Commitments and Contingencies (Note 14)
Members’/Stockholders’ Equity
Units, $4.1322314 par value, 0 units authorized at September 30, 2021, 0 units and 134,039,494 issued and outstanding at September 30, 2021 and December 31, 2020, respectively	—		553,717
Preferred Stock, $0.001 par value, 50,000,000 shares authorized at September 30, 2021; 0 shares issued and outstanding at September 30, 2021 and December 31, 2020	—		—
Common Stock, $0.001 par value, 500,000,000 shares authorized at September 30, 2021, 153,940,553 shares issued and outstanding at September 30, 2021; 0 shares issued and outstanding at December 31, 2020	154		—
Additional paid-in-capital(1)	762,470		—
Accumulated other comprehensive income	788		4,523
Accumulated deficit(1)	(9,780)		(126,761)
Total members’/stockholders’ equity	753,632		431,479
Total liabilities and members’/stockholders’ equity	$	1,084,882	$	849,579


	Three Months Ended September 30,				Nine Months Ended September 30,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)	2021		2020		2021		2020
Revenue	$	79,014	$	59,964	$	221,041	$	162,326
Operating expenses:
Cost of revenue (excluding depreciation and amortization shown below)	13,846		10,180		38,191		28,091
Sales and marketing	19,574		13,519		63,387		48,643
Technology and development	14,609		11,107		47,554		36,169
General and administrative	16,089		6,863		57,680		22,449
Depreciation and amortization	16,100		16,434		45,098		49,185
Total operating expenses	80,218		58,103		251,910		184,537
Operating income (loss)	(1,204)		1,861		(30,869)		(22,211)
Interest expense, net	(5,753)		(7,795)		(17,880)		(23,748)
Loss on extinguishment of debt	(3,721)		—		(3,721)		—
Net loss before benefit from income taxes	(10,678)		(5,934)		(52,470)		(45,959)
Benefit from income taxes	898		1,486		4,855		10,616
Net loss	$	(9,780)	$	(4,448)	$	(47,615)	$	(35,343)
Net loss per share – basic and diluted (1):	$	(0.06)	$	(0.03)	$	(0.34)	$	(0.26)
Basic and diluted weighted average shares outstanding	151,988,054		134,039,202		140,016,260		134,047,188
Other comprehensive income (loss):
Foreign currency translation adjustments	(2,549)		1,761		(3,735)		1,037
Total comprehensive loss	$	(12,329)	$	(2,687)	$	(51,350)	$	(34,306)


	Common Stock
(IN THOUSANDS, EXCEPT UNITS AND SHARES)	Shares	Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total stockholders’ equity
Balance, July 1, 2021	134,203,403	$	134	$	430,368	$	3,337	$	—	$	433,839
RSUs vested	26,931	—		150		—		—		150
Stock-based compensation	—	—		7,984		—		—		7,984
Foreign currency translation adjustment	—	—		—		(2,549)		—		(2,549)
Net loss	—	—		—		—		(9,780)		(9,780)
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	16,821,330	17		274,340		—		—		274,357
Issuance of common stock for the acquisition of Publica	2,888,889	3		49,628		—		—		49,631
Balance, September 30, 2021	153,940,553	$	154	$	762,470	$	788	$	(9,780)	$	753,632


	Member’s Interest			Common Stock
(IN THOUSANDS, EXCEPT UNITS AND SHARES)	Units (1)	Amount		Shares	Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total members’/ stockholders’ equity
Balance, January 1, 2021	134,039,494	$	553,717	—	$	—	$	—	$	4,523	$	(126,761)	$	431,479
Repurchase of units	(99,946)	(413)		—	—		—		—		(791)		(1,204)
Units vested	17,486			—	—		—		—		—		—
Option exercises	246,369	1,075		—	—		3,360		—		—		4,435
Foreign currency translation adjustment	—	—		—	—		—		(3,735)		—		(3,735)
Net loss prior to corporate conversion	—	—		—	—		—		—		(37,832)		(37,832)
Conversion to Delaware corporation (Note 1)	(134,203,403)	(554,379)		134,203,403	134		388,860		—		165,385		—
Stock-based compensation	—	—		—	—		46,132		—		—		46,132
RSUs vested	—	—		26,931	—		150		—		—		150
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	—	—		16,821,330	17		274,340		—		—		274,357
Issuance of common stock for the acquisition of Publica	—	—		2,888,889	3		49,628		—		—		49,631
Net loss	—	—		—	—		—		—		(9,780)		(9,780)
Balance, September 30, 2021	—	$	—	153,940,553	$	154	$	762,470	$	788	$	(9,780)	$	753,632


	Member’s Interest
(IN THOUSANDS, EXCEPT UNITS AND SHARES)	Units(1)	Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total members’ equity
Balance, January 1, 2020	134,034,604	$	553,862	$	—	$	175	$	(94,365)	$	459,672
Repurchase of units	(35,090)	(145)		—		—		(22)		(167)
Units vested	36,300	—		—		—		—		—
Foreign currency translation adjustment	—	—		—		1,037		—		1,037
Net loss	—	—		—		—		(35,343)		(35,343)
Balance, September 30, 2020	134,035,814	$	553,717	$	—	$	1,212	$	(129,730)	$	425,199


	Nine Months Ended September 30,
(IN THOUSANDS)	2021		2020
Cash flows from operating activities:
Net loss	$	(47,615)	$	(35,343)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	45,098		49,185
Stock-based compensation	49,673		—
Deferred tax benefit	(9,966)		(12,431)
Extinguishment of debt	3,721		—
Amortization of debt issuance costs	1,020		1,024
Allowance for doubtful accounts	764		1,647
Non-cash interest expense	394		3,351
Changes in operating assets and liabilities, net of acquired business:
Decrease in accounts receivable	774		2,581
Decrease in unbilled receivables	703		1,542
Increase in prepaid expenses and other current assets	(6,151)		(86)
Decrease (increase) in other long-term assets	(574)		81
Increase in accounts payable and accrued expenses	220		6,644
Decrease in due to related party	(62)		(587)
Increase in accrued rent	220		162
Decrease in deferred revenue	(563)		(1,112)
Net cash provided by operating activities	37,656		16,659
Cash flows from investing activities:
Payment for the acquisition of Publica, net of acquired cash	(166,204)		—
Purchase of property and equipment	(636)		(447)
Acquisition and development of internal use software	(10,011)		(7,568)
Net cash used in investing activities	(176,851)		(8,015)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts and commissions	281,589		—
Payments for offering costs	(4,728)		—
Repayment of long-term debt	(355,934)		—
Proceeds from the New Revolver	235,000		—
Payments for debt issuance costs	(2,318)		—
Principal payments on capital lease obligations	(275)		(1,333)
Cash paid for unit repurchases	(1,202)		(167)
Exercise of stock options	1,075		—
Net cash provided by (used in) financing activities	153,207		(1,500)
Net increase in cash, cash equivalents and restricted cash	14,012		7,144
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,042)		551
Cash, cash equivalents and restricted cash at beginning of period	54,721		30,370
Cash, cash equivalents, and restricted cash, at end of period	$	66,691	$	38,065
Supplemental Disclosures:
Cash paid during the period for:
Interest	$	17,109	$	15,224
Taxes	$	1,438	$	674
Non-cash investing and financing activities:
Deferred offering costs accrued, not yet paid	$	2,506	$	—
Assets acquired under capital leases	$	—	$	212
Property and equipment acquired included in accounts payable	$	11	$	88
Internal use software acquired included in accounts payable	$	682	$	894
Conversion of members’ equity to additional paid-in capital	$	165,385	$	—

Total expenses incurred by the Company for A Cloud Guru, Inc. (“A Cloud Guru”) (the Vista equity Partners related party) were $4 and $4, respectively, for the three months ended September 30, 2021 and 2020. Total expenses incurred by the Company for A Cloud Guru were $11 and $15, respectively, for the nine months ended September 30, 2021 and 2020. These costs were included in technology and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to A Cloud Guru as of September 30, 2021 and December 31, 2020 were $0 and $15, respectively.

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results or our plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our IPO prospectus, as well as in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this Quarterly Report in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in the section titled “Risk Factors” included in our final IPO prospectus filed with the Securities and Exchange Commission (“SEC”) on July 1, 2021. These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full fiscal year or any other period. Unless the context otherwise requires, the terms “Company,” “Integral Ad Science Holding Corp.,” “IAS,” “we,” “us,” “our,” or similar terms refer to Integral Ad Science Holding LLC and its consolidated subsidiaries before the corporate conversion, and Integral Ad Science Holding Corp. and, where appropriate, its subsidiaries after the Corporate Conversion.

We are a leading digital advertising verification company by revenue. With our cloud-based technology platform and the actionable insights it provides, we deliver independent measurement and verification of digital advertising across all devices, channels, and formats, including desktop, mobile, connected TV (“CTV”), social, display, and video. Our proprietary and Media Rating Council (the “MRC”) accredited Quality Impressions® metric is designed to verify that digital ads are served to a real person rather than a bot, viewable on-screen, and appear in a brand-safe and suitable environment in the correct geography.

Without an independent evaluation of digital advertising quality, brands and their agencies previously relied on a wide range of publishers and ad platforms to self-report and measure the effectiveness of campaigns without a global benchmark to understand success. We are an independent, trusted partner for buyers and sellers of digital advertising to increase accountability, transparency, and effectiveness in the market. We help advertisers optimize their ad spend and better measure consumer engagement with campaigns across platforms, while enabling publishers to improve their inventory yield and revenue.

As a leading ad verification partner, we have deep integrations with all the major advertising and technology platforms including Amazon, Facebook, Google, Instagram, LinkedIn, Microsoft, Pinterest, Snap, Spotify, TikTok, The Trade Desk, Twitter, Xandr, Yahoo, and YouTube. Our platform uses advanced artificial intelligence (“AI”) and machine learning (“ML”) technologies to process over 100 billion daily web transactions on average. With this data, we deliver real-time insights and analytics to our global customers through IAS Signal, out easy-to-use unified reporting platform that helps brands, agencies, and publishers improve media quality and campaign performance.

Our pre-bid and post-bid verification solutions enable advertisers to measure campaign performance and value across viewability, ad fraud prevention, brand safety and suitability, and contextual targeting for ads on desktop, mobile in-app, social, and CTV platforms. Our pre-bid programmatic solution is directly integrated with DSPs to help optimize return on ad spend (“ROAS”) by directing budget to the best available inventory. With our Context Control solution, advertisers can leverage more than 300 contextual segments from the Company on a pre-bid basis to avoid undesirable content or target towards content that is more suitable for their campaigns. Additionally, our Total Visibility® offering provides marketers with actionable insights to optimize their campaign spend and drive higher yield by focusing on the most efficient and cost effective pathways. Our solutions help hundreds of publishers globally deliver high quality ad inventory that is fraud free, viewable, brand safe and suitable, and geographically targeted.

In addition, to date, we have not experienced a material increase in customers’ cancellations, or requests for more favorable contractual terms, or concessions, and we have not experienced a significant deterioration in the collectability of our receivables or a material negative impact from our vendors and third-party service providers. Further, we have not incurred impairment losses in the carrying values of our assets as result of the pandemic and are not aware of any specific events or circumstances that would require a revision to the estimates reflected in our consolidated financial statements.

However, the severity, magnitude and duration of the current COVID-19 pandemic continues to be uncertain, rapidly changing, and hard to predict and depends on events beyond our knowledge or control. The COVID-19 pandemic could have the effect of heightening many of the risks described in the section entitled “Risk Factors” in our IPO prospectus, such as those relating to our reputation, product sales, results of operations or financial condition. We might not be able to predict or respond to all impacts on a timely basis to prevent near- or long-term adverse impacts to our results. As a result, we cannot at this time predict the ultimate impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Our ability to acquire new customers and increase our market share is dependent upon a number of factors, including the effectiveness of our solutions, marketing and sales to drive new business prospects and execution, client digital marketing investment adoption, new products and feature offerings, global reach and the growth of the market for digital ad verification. There is a market opportunity to provide advertisers directly or through advertising agencies with verification services, specifically around ad viewability, ad fraud prevention and brand safety and suitability. Based on a March 2021 analysis by Frost & Sullivan, we estimate the global market opportunity for our ad verification solutions to be $9.5 billion and expect it to grow at a 16.2% CAGR from 2021 to 2025. We plan to work with the top 500 global advertisers by targeting high-spend verticals and brands with a natural sensitivity for brand safety, brand suitability, and ROAS needs. We believe we will increase our market share by strengthening our work with the leading social platforms, enhancing our programmatic solutions, deriving

Our ability to expand our customer base internationally is dependent upon a number of factors, including effectively implementing our business processes and go-to-market strategy, our ability to adapt to market or cultural differences, the general competitive landscape, our ability to invest in our sales and marketing channels, the maturity and growth trajectory of our services by region and our brand awareness and perception. Global marketers are becoming increasingly cognizant of the value of sophisticated verification strategies and, as such, we believe there is growing demand for our services internationally. Our investments in international markets resulted in an 18% growth in revenue year-over-year. We believe that Latin America and Southeast Asia may represent substantial growth opportunities, and we are investing in developing our business in those markets by way of expanded in-market customer service investment and by leveraging our global relationships. We aim to continue to grow outside the U.S. in Europe and other established markets such as Australia and Japan, and view ourselves as best positioned to continue penetrating these markets given our market-leading global footprint.

We experience fluctuations in revenue that coincide with seasonal fluctuations in the digital ad spending of our customers. The global advertising industry experiences seasonal trends that affect the vast majority of participants in the digital advertising ecosystem. Most notably, advertisers have historically spent relatively more in the fourth quarter of the calendar year to coincide with the holiday shopping season, and relatively less in the first quarter. We expect seasonality trends to continue, and our ability to manage our resources in anticipation of these trends will affect our operating results. Consequently, the fourth quarter usually reflects the highest level of measurement activity, and the first quarter reflects the lowest level of activity. Our revenue, cash flow, operating results and other key operating and performance metrics may vary from quarter to quarter due to the seasonal nature of our clients’ spending on advertising campaigns. While our revenue is highly re-occurring, seasonal fluctuations in ad spend may impact quarter-over-quarter results. We believe that the year-over-year comparison of results more appropriately reflects the overall performance of the business.

We define net revenue retention of advertising customers as a metric to reflect the expansion or contraction of our advertising customers’ revenue by measuring the period-over-period change in trailing-twelve-month revenues from customers who were also advertising customers in the prior trailing twelve-month period. As such, this metric includes the impact of any churned, or lost, advertising customers from the prior trailing-twelve-month period as well as any increases or decreases in their spend, including the positive revenue impacts of selling new services to an existing advertising customer. The numerator and denominator include revenue from all advertising customers that we served and from which we recognized revenue in the earlier of the two trailing-twelve-month periods being compared. For purposes of discussing our key business metrics, we define an advertising customer as any advertiser account that spends at least $3,000 in the applicable trailing twelve-month period. We calculate our net revenue retention of advertising customers as follows:

Our net revenue retention of advertising customers increased from 107% as of September 30, 2020 to 129% as of September 30, 2021. The increase in the net revenue retention of advertising customers as of September 30, 2020 compared to September 30, 2021 was primarily due to the COVID-19 pandemic, which began in the second quarter of 2020 and impacted the remainder of the year ended December 31, 2020. In the quarters subsequent to the second quarter of 2020, the underlying demand for the Company’s services has stabilized. Revenue increased by 32% for the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

We view the number of advertising customers as a key indicator of our scale and growth and the adoption of our platform. We determine our number of advertising customers by counting the total number of advertiser accounts who have spent at least $3,000 in the trailing twelve months. The total number of advertising customers has limitations as an operating metric as it does not reflect the product mix chosen by our advertising customers, the order frequency, or the purchasing behavior of our advertising customers. Because of these and other limitations, we consider, and you should consider, advertising customers in conjunction with our other metrics, including net revenue retention, net loss, Adjusted EBITDA, and average revenue per advertising customer.

Historically our revenue has been driven primarily by a subset of large advertising customers who have leveraged our platform substantially from a usage standpoint. Increasing awareness of our solutions, further developing our sales and marketing expertise and partner ecosystem, and continuing to build solutions that address the unique identity needs of the top 500 global advertisers have increased our number of large advertising customers. We determine our number of large advertising customers by counting the total number of advertising accounts who have spent at least $200,000 per year. We believe the recruitment and cultivation of large advertising customers is critical to our long-term success. Our total number of large advertising customers increased from 160 as of September 30, 2020 to 183 as of September 30, 2021, primarily due to economic recoveries and improved macroeconomic conditions since the prior year. The third quarter of 2020 was largely impacted by the COVID-19 pandemic. As macro-economic conditions fluctuate, including inflationary pressures due to the COVID-19 pandemic, there is no guarantee that we will continue to see an increase of large advertising customers.

We deliver our products and solutions to serve two customer types (i) buy-side (advertisers and agencies) and (ii) sell-side (publishers, advertising/audience networks, and supply side platforms). We generally generate revenue by charging a CPM based on the volume of purchased digital ads that we measure and optimize on behalf of these customers. There are no separate fees to access our platform. Depending on our customer needs, our contracts have (i) usage-based pricing, or (ii) monthly, quarterly or annual minimum commitments, or (iii) fixed fees. Usage based pricing is our primary contracting model. For minimum commitment contracts, the customer is billed based on usage. If usage is less than the minimum commitment, the shortfall is billed at the end of the contract term. Alternatively, a customer that uses more impressions than the minimum, would be billed based on actual usage including an then an overage fee if applicable is applied on such usage. Fixed fees contracts are recognized pro-rata over the contract term.

We recognize revenue when control of the promised services is transferred to customers. Revenue from the cloud-based technology platform is primarily recognized based on impressions delivered to customers. An “impression” is delivered when an advertisement appears on pages viewed by users. A significant majority (i.e., over 90%) of the Company’s contracts are usage-based contracts with no substantive minimum commitments. We have certain contracts for which pricing is variable through tiered pricing arrangements or include annual base fees that do not coincide with the calendar year, requiring an estimate of the transaction price attributable to each year. The majority of our contracts have a duration of one year or less.

Cost of revenue. Cost of revenue consists of data center costs, hosting fees, revenue share with our DSP partners and personnel costs. Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, primarily attributable to our customer operations group. Our customer operations group is responsible for onboarding, integration of new clients and providing support for existing customers, including technical support for our technology platform and product offering. We allocate overhead such as rent and occupancy and information technology infrastructure charges based on headcount.

Technology and development. Technology and development expense consists primarily of personnel costs of our engineering, product, and data sciences activities. Personnel costs including salaries, bonuses, stock-based compensation and employee benefits costs, third-party consultant costs associated with the ongoing development and maintenance of our technology platform and product offering. We allocate overhead such as rent and occupancy and information technology infrastructure charges based on headcount. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in internal use software, net on our consolidated balance sheet.

Depreciation and amortization. Depreciation and amortization expense consists primarily of depreciation and amortization expenses related to customer relationships, developed technologies, trademarks, favorable leases, equipment, leasehold improvements and other tangible and intangible assets. We depreciate and amortize our assets in accordance with our accounting policies. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred. Intangible assets are amortized on a straight-line basis over their estimated useful lives or using an accelerated method.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
(in thousands except percentages)
Revenue	$	79,014		$	59,964		$	221,041		$	162,326
Operating expenses:
Cost of revenue (excluding depreciation and amortization shown below)	13,846			10,180			38,191			28,091
Sales and marketing	19,574			13,519			63,387			48,643
Technology and development	14,609			11,107			47,554			36,169
General and administrative	16,089			6,863			57,680			22,449
Depreciation and amortization	16,100			16,434			45,098			49,185
Total operating expenses	80,218			58,103			251,910			184,537
Operating income (loss)	(1,204)			1,861			(30,869)			(22,211)
Interest expense, net	(5,753)			(7,795)			(17,880)			(23,748)
Loss on extinguishment of debt	(3,721)			—			(3,721)			—
Net loss before benefit from income taxes	(10,678)			(5,934)			(52,470)			(45,959)
Benefit from income taxes	898			1,486			4,855			10,616
Net loss	$	(9,780)		$	(4,448)		$	(47,615)		$	(35,343)
Net loss margin	(12)		%	(7)		%	(22)		%	(22)		%


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	100	%	100	%	100	%	100	%
Operating expenses:
Cost of revenue (excluding depreciation and amortization shown below)	18	%	17	%	17	%	18	%
Sales and marketing	25	%	23	%	29	%	30	%
Technology and development	18	%	19	%	22	%	22	%
General and administrative	20	%	11	%	26	%	14	%
Depreciation and amortization	20	%	27	%	20	%	30	%
Total operating expenses	102	%	97	%	114	%	114	%
Operating income (loss)	(2)	%	3	%	(14)	%	(14)	%
Interest expense, net	(7)	%	(13)	%	(8)	%	(15)	%
Loss on extinguishment of debt	(5)	%	—	%	(2)	%	—	%
Net loss before benefit from income taxes	(14)	%	(10)	%	(24)	%	(28)	%
Benefit from income taxes	1	%	2	%	2	%	7	%
Net loss	(12)	%	(7)	%	(22)	%	(22)	%


	Three Months Ended September 30,
	2021			2020			$ change			% change
(in thousands except percentages)
Revenue	$	79,014		$	59,964		$	19,050		32	%
Operating expenses:
Cost of revenue (excluding depreciation and amortization shown below)	13,846			10,180			3,666			36	%
Sales and marketing	19,574			13,519			6,055			45	%
Technology and development	14,609			11,107			3,502			32	%
General and administrative	16,089			6,863			9,226			134	%
Depreciation and amortization	16,100			16,434			(334)			(2)	%
Total operating expenses	80,218			58,103			22,115			38	%
Operating income (loss)	(1,204)			1,861			(3,065)			(165)	%
Interest expense, net	(5,753)			(7,795)			2,042			(26)	%
Loss on extinguishment of debt	(3,721)			—			(3,721)			(100)	%
Net loss before benefit from income taxes	(10,678)			(5,934)			(4,744)			80	%
Benefit from income taxes	898			1,486			(588)			(40)	%
Net loss	$	(9,780)		$	(4,448)		$	(5,332)		120	%
Net loss margin	(12)		%	(7)		%	(5)		%	67	%

Total revenue increased primarily due to a significant increase in our programmatic revenue of $11.1 million, or 49%, attributable to growth in volume of impressions of 16% and an increase of 28% in average CPMs. The increase in average CPMs was attributable to the launch of our Context Control solution in early 2020. Revenue from our advertiser direct customers increased $4.4 million, or 15%, reflecting volume growth in volume of impressions of 34% as well as the acquisition of a number of new large customers. These increases were partially offset by a decrease of 13% in average CPMs due to changes in mix from open web towards social platforms. Revenue from our supply side customers increased $3.5 million, or 48%, primarily due to the acquisition of Publica.

Cost of Revenue. Cost of revenue increased by $3.7 million, or 36%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was driven by a $1.4 million increase in data center and hosting fees resulting from overall revenue growth and migration of data centers to Amazon Web Services (“AWS”) cloud and an increase of $2.9 million in revenue share to our DSP partners on account of our growth in programmatic revenue. These increases were partially offset by a decrease in compensation expense of $0.5 million, and a decrease in allocated overhead expense of $0.1 million as a result of workforce reductions in 2020.

Sales and marketing. Sales and marketing expenses increased by $6.1 million, or 45%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily due to a $2.4 million stock-based compensation expense, which we did not incur in the 2020 fiscal year, an increase in sales commissions of $1.5 million due to higher revenue growth, an increase in compensation expenses of $0.7 million to support our growth and international expansion, an increase in restructuring costs of $0.9 million, and an increase of $0.5 million in marketing and advertising expenses. Expenses for the three months ended September 30, 2020 were impacted by COVID-19. While we have incurred significantly lower travel related expenses as a result of the COVID-19 pandemic, it is unclear whether such expenses will return to pre-COVID-19 levels given the continued uncertainty around travel restrictions and office openings.

Technology and development. Technology and development expenses increased by $3.5 million, or 32%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily due to a $1.8 million stock-based compensation expense, which we did not incur in the 2020 fiscal year, an increase in compensation expenses of $1.9 million, hosting and license fees of $0.7 million to support our growth, and an increase in allocated overhead expense of $0.2 million as a result of increased headcount in 2021. These increases were partially offset by a $1.0 million increase in internally developed costs capitalized, driven by the increase in compensation expenses.

General and administrative. General and administrative expenses increased by $9.2 million, or 134%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily due to a $3.9 million stock-based compensation expense, which we did not incur in the 2020 fiscal year, an increase in compensation expenses of $1.5 million due to increased headcount, costs of $1.4 million related to the acquisition of Publica, an increase in insurance costs of $1.2 million related to public company costs, an increase of $0.9 million in professional fees incurred for audit and tax services, and an increase in reserves for bad debts of $0.2 million.

Depreciation and amortization. Depreciation and amortization expenses decreased by $0.3 million, or 2%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This decrease results from decreased depreciation of our property and equipment of $0.3 million and decreased amortization of our intangible assets of $2.2 million, resulting from the use of the accelerated method to amortize the asset. These decreases were offset by an increase in amortization from the Publica acquisition of $1.4 million and increased amortization expense related to our internal-use software of $0.8 million.


	Nine Months Ended September 30,
	2021			2020			$ change			% change
(in thousands)
Revenue	$	221,041		$	162,326		$	58,715		36	%
Operating expenses:
Cost of revenues (excluding depreciation and amortization shown below)	38,191			28,091			10,100			36	%
Sales and marketing	63,387			48,643			14,744			30	%
Technology and development	47,554			36,169			11,385			31	%
General and administrative	57,680			22,449			35,231			157	%
Depreciation and amortization	45,098			49,185			(4,087)			(8)	%
Total operating expenses	251,910			184,537			67,373			37	%
Operating loss	(30,869)			(22,211)			(8,658)			39	%
Interest expense, net	(17,880)			(23,748)			5,868			(25)	%
Loss on extinguishment of debt	(3,721)			—			(3,721)			(100)	%
Net loss before benefit from income taxes	(52,470)			(45,959)			(6,511)			14	%
Benefit from income taxes	4,855			10,616			(5,761)			(54)	%
Net loss	$	(47,615)		$	(35,343)		$	(12,272)		35	%
Net loss margin	(22)		%	(22)		%	—		%	—	%

Total revenue increased primarily due to a significant increase in our programmatic revenue of $34.6 million, or 60%, attributable to growth in volume of impressions of 32% and an increase of 21% in average CPMs. The increase in average CPMs, was attributable to the launch of our Context Control solution in early 2020. Revenue from our advertiser direct customers increased $18.8 million, or 23%, reflecting growth in volume of impressions of 40% as well as the acquisition of a number of new large customers. These increases were partially offset by a decrease of 12% in average CPMs due to changes in mix from open web towards social platforms. Supply side revenue increased $5.3 million, or 25%, primarily attributable to the acquisition of Publica.

Cost of Revenue. Cost of revenue increased by $10.1 million, or 36%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was driven by a $4.3 million increase in data center and hosting fees resulting from overall revenue growth and migration of data centers to AWS cloud and an increase of $8.8 million in revenue share to our DSP partners on account of our growth in programmatic revenue. These increases were partially offset by a decrease in compensation expense of $2.3 million and a decrease in allocated overhead expense of $0.6 million as a result of workforce reductions in 2020.

Technology and development. Technology and development expenses increased by $11.4 million, or 31%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily due to $8.8 million of stock-based compensation expense, which we did not incur in the 2020 fiscal year, increase in restructuring expense of $0.8 million due to termination of certain employees, increases of $1.8 million for compensation expenses and increase in server, hosting and license fees of $1.9 million to support our growth. These increases were partially offset by a decrease of $0.9 million incurred in the prior period related to purchase of certain technology and an increase in internally developed costs capitalized of $1.1 million.

General and administrative. General and administrative expenses increased by $35.2 million, or 157%, for the nine months September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily due to $27.6 million of stock-based compensation expense, which we did not incur in the 2020 fiscal year, increase in professional fees of $2.3 million for IPO related assistance and audit and tax services, increase of $1.2 million insurance costs related to public company costs, increase in compensation expenses of $4.0 million to support the Company’s growth and public company infrastructure, costs of $1.9 million related to the Publica acquisition, and an increase in $0.9 million caused due to lower allocation of overhead costs. These increases were partially offset by a $0.9 million decrease in reserves for bad debts, and a $1.6 million decrease in professional fees incurred in the nine months ended September 30, 2020 for automation and process improvement initiatives.

Depreciation and amortization. Depreciation and amortization expenses decreased by $4.1 million, or 8%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This decrease results from decreased depreciation of our property and equipment of $1.0 million and decreased amortization of our intangible assets of $7.0 million, resulting from the use of the accelerated method to amortize the asset. These decreases were partially offset by increased amortization expense related to our internal-use software of $2.5 million and increase in amortization expense of $1.4 million due to the Publica acquisition.

We use supplemental measures of our performance, which are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with GAAP. Adjusted EBITDA is the primary financial performance measure used by management to evaluate our business and monitor ongoing results of operations. Adjusted EBITDA is defined as earnings (loss) before depreciation and amortization, stock-based compensation, interest expense, benefit from income taxes, acquisition, restructuring and integration costs, IPO readiness costs and other one-time, non-recurring costs such as losses due to extinguishment of debt. Adjusted EBITDA margin represents the Adjusted EBITDA for the applicable period divided by the revenue for that period presented in accordance with GAAP.

We use non-GAAP financial measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our shareholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period-to-period comparisons. Although we believe these measures are useful to investors and analysts for the same reasons they are useful to management, as discussed below, these measures are not a substitute for, or superior to, U.S. GAAP financial measures or disclosures. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net income (loss) prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliation of Adjusted EBITDA to its most directly comparable GAAP financial measure, net loss, is presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Net loss	$	(9,780)		$	(4,448)		$	(47,615)		$	(35,343)
Depreciation and amortization	16,100			16,434			45,098			49,185
Stock-based compensation	8,141			—			49,673			—
Interest expense, net	5,753			7,795			17,880			23,748
Benefit from income taxes	(898)			(1,486)			(4,855)			(10,616)
Acquisition, restructuring and integration costs	2,314			171			4,893			2,022
IPO readiness costs	56			—			1,094			—
Loss on extinguishment of debt	3,721			—			3,721			—
Adjusted EBITDA	$	25,407		$	18,466		$	69,889		$	28,996
Revenue	$	79,014		$	59,964		$	221,041		$	162,326
Net loss margin	(12)		%	(7)		%	(22)		%	(22)		%
Adjusted EBITDA margin	32		%	31		%	32		%	18		%

As of September 30, 2021, our principal sources of liquidity were cash and cash equivalents totaling $63.8 million, which was held for working capital purposes, as well as the available balance under our New Revolver, described further below. We expect that the $274.4 million of proceeds from the IPO (net of underwriting discounts and offering costs) together with operating cash flows and our cash and cash equivalents on hand at September 30, 2021, will enable us to continue to make investments in the future. We expect our operating cash flows to further improve as we increase our operational efficiency and experience economies of scale.

We believe our existing cash and cash equivalents, availability under our New Revolver and cash provided by operations will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months. Our future capital requirements will depend on many factors including our growth rate, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced products and services offerings, the continuing market acceptance of our products. In the future, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

Some of our customers pay in advance for subscriptions, a portion of which is recorded as deferred revenue. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is later recognized as revenue in accordance with our revenue recognition policy. As of September 30, 2021 and December 31, 2020, we had deferred revenue of $0.6 million and $1.1 million, respectively, all of which was recorded as a current liability and is expected to be recorded as revenue in the next twelve months, provided all other revenue recognition criteria have been met.

On July 19, 2018, we entered into the Prior Credit Agreement with a syndicate of lenders, comprised of the $325.0 million (“Term Loan”) and the $25.0 million (“Revolving Loan”), with maturity dates of July 19, 2024 and July 19, 2023, respectively. Pursuant to the Incremental Facility Assumption Agreement No. 1, dated as of November 19, 2019 (the “ Prior Credit Agreement Amendment”), the Term Loan was increased to $345.0 million. As explained below, on September 29, 2021, the Company repaid the outstanding balances and terminated the Prior Credit Agreement.

In addition to the cash pay interest, the Prior Credit Agreement included PIK interest at a rate of 1.25% per annum. All PIK interest due was paid by capitalizing such interest and adding such applicable PIK interest to the principal amount of the outstanding Term Loan. Effective February 1, 2021, and subject to maintaining a total leverage ratio less than 6.50 to 1.00, additional PIK interest was not accrued pursuant to the Prior Credit Agreement. The interest rate during the period prior to the repayment was 6.0%.

On September 29, 2021, we entered into a new credit agreement with various lenders (the “New Credit Agreement” or the “New Revolver”), provides for an initial $300.0 million in commitments for revolving credit loans, which amount may be increased or decreased under specific circumstances, with a $30.0 million letter of credit sublimit and a $100.0 million alternative currency sublimit. In addition, the New Credit Agreement provides for the ability to request incremental term loan facilities, in a minimum amount of $5.0 million for each facility. Borrowings under to the New Credit Agreement may be used for working capital and other general corporate purposes, including for acquisitions permitted under the New Credit Agreement.

The interest rates applicable to revolving borrowings under the New Credit Agreement are, at our option, either (i) in the case of U.S. dollar loans, (x) a base rate, which is equal to the greater of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5%, and (c) the Adjusted LIBOR (subject to a floor of 0.0%) for a one month Interest Period (each term as defined in the New Credit Agreement) plus 1%, or (y) the Adjusted LIBOR (subject to a floor of 0.0%) equal to the LIBOR (as defined in the New Credit Agreement) for the applicable Interest Period multiplied by the Statutory Reserve Rate (each term as defined in the New Credit Agreement) or (ii) in the case of RFR Loans (as defined in the New Credit Agreement) denominated in sterling or euro, (x) the applicable RFR (as defined in the New Credit Agreement) or (y) the applicable Term RFR (as defined in the New Credit Agreement), plus in the case of each of clauses (i) and (ii), the Applicable Rate (as defined in the New Credit Agreement). The Applicable Rate (i) for base rate loans range from 0.75% to 1.50% per annum, (ii) for LIBOR loans range from 1.75% to 2.50% per annum, (iii) for RFR Loans denominated in sterling range from 1.7826% to 2.5326%, and (iv) for RFR Loans denominated in euro range from 1.7965% to 2.5456%, in each case, based on the Senior Secured Net Leverage Ratio (as defined in the New Credit Agreement). Base rate borrowings may only be made in dollars. A commitment fee during the term of the New Credit Agreement ranging from 0.20% to 0.35% per annum of the average daily undrawn portion of the revolving commitments based on the Senior Secured Net Leverage Ratio (as defined in the New Credit Agreement). The interest rate at September 30, 2021 was 2.2%.

The New Credit Agreement contains covenants requiring certain financial information to be submitted quarterly and annually. In addition, we are also required to comply with certain financial covenants such as maintaining a Net Leverage Ratio (as defined in the New Credit Agreement) of 3.50:1.00 or lower and maintaining a minimum Interest Coverage Ratio (as defined in the New Credit Agreement) of 2.50 to 1.00. As of September 30, 2021, the Company was in compliance with all covenants contained in the New Credit Agreement. Based upon current facts and circumstances, we believe existing cash coupled with the cash flows generated from operations will be sufficient to meet our cash needs and comply with covenants.


	Nine Months Ended September 30,
	2021		2020
Net cash provided by operating activities	$	37,656	$	16,659
Net cash used in investing activities	(176,851)		(8,015)
Net cash provided by (used in) financing activities	153,207		(1,500)
Net increase in cash and cash equivalents, and restricted cash	$	14,012	$	7,144
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(2,042)		551
Cash, cash equivalents, and restricted cash, at beginning of period	54,721		30,370
Cash, cash equivalents and restricted cash, at end of period	$	66,691	$	38,065

For the nine months ended September 30, 2021, net cash provided by operating activities was $37.7 million, resulting from a net loss of $47.6 million adjusted for non-cash expenses of depreciation and amortization of $45.1 million, stock-based compensation of $49.7 million, a loss on the extinguishment of debt of $3.7 million, amortization of debt issuance costs of $1.0 million, bad debt expense of $0.8 million, and non-cash interest expense of $0.4 million, partially offset by a decrease in working capital of $5.4 million, and a deferred tax provision of $10.0 million.

Cash provided by financing activities was $153.2 million for the nine months ended September 30, 2021, reflecting proceeds from the IPO, net of underwriting discounts and commissions of $281.6 million, issuance of new debt of $235.0 million, and $1.1 million in stock options exercised. This was offset by a repayment of outstanding debt of $355.9 million, $1.2 million in common stock repurchases, $4.7 million in deferred offering costs, payments for debt issuance costs of $2.3 million and $0.3 million in principal payment on our capital leases.

Our principal commitments consist of obligations under operating leases for office space, our purchase commitments related to hosting and data services and repayments of long-term debt. We lease office space under operating leases, which expire on various dates through March 2027 and the total non-cancelable payments under these leases were $29.7 million as of September 30, 2021. Total non-cancelable purchase commitments related to hosting services as of September 30, 2021 were $57.5 million for periods through 2024. The New Revolver matures in 2026.

In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, in connection with the completion of this offering we intend to enter into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows.

We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act. For as long as we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions, impacting our reported results of operations and financial condition

The functional currencies of our foreign subsidiaries are the respective local currencies. Most of our sales are denominated in U.S. dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the U.S., U.K., France, Germany, Italy, and Singapore. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments. During the three and nine months ended September 30, 2021, a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our consolidated financial statements.

Our primary market risk exposure is changing eurodollar-based interest rates. Interest rate risk is highly sensitive due to many factors, including E.U. and U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. The New Revolver carries interest at an applicable margin, for U.S. dollar loans equal to the greater of (a) the rate last quoted by The Wall Street Journal as the “prime rate” in the U.S., (b) the Federal Funds Rate in effect on such day plus 0.5%, or the Adjusted LIBOR (subject to a floor of 0.0%) for a one month interest period on such day multiplied by the Statutory Reserve Rate. For eurodollar borrowings, the New Revolver carries interest at an applicable margin equal to applicable RFR or the applicable Term RFR, plus (i) the Applicable Rate for base rate loans range from 0.75% to 1.50% per annum, (ii) for LIBO Rate loans range from 1.75% to 2.50% per annum, (iii) for RFR Loans denominated in sterling range from 1.7826% to 2.5326%, and (iv) for RFR Loans denominated in euro range from 1.7965% to 2.5456%, in each case, based on the Senior Secured Net Leverage Ratio. In addition, we will pay a commitment fee during the term of the Credit Agreement ranging from 0.20% to 0.35% per annum of the average daily undrawn portion of the revolving commitments based on the Senior Secured Net Leverage Ratio.

We previously identified material weaknesses in our internal control over financial reporting that continue to exist. We did not design policies to maintain evidence of the operation of key control procedures, nor were monitoring controls evidenced at a sufficient level to provide the appropriate oversight of activities related to our internal control over financial reporting. Additionally, we did not design and maintain controls to ensure (i) appropriate segregation of duties in the operation of manual controls and (ii) account reconciliations, journal entries, and balance sheet and income statement fluctuation analyses were reviewed at the appropriate level of precision. In addition, the Company did not design and maintain effective controls over information technology, or IT, general controls for information systems that are relevant to the preparation of the consolidated financial statements. Specifically, we did not design and maintain (i) program change management controls for financial systems to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately, (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate personnel, (iii) computer operations to ensure that critical batch jobs are monitored, privileges are appropriately granted, and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements for financially relevant IT systems.

We are implementing measures to remediate the identified material weaknesses. The measures include (i) formalizing the Company’s accounting policies with respect to maintaining evidence in the operation of control procedures, (ii) improving our control framework to include both the appropriate segregation of duties and definition around the appropriate levels of precision for controls, including account reconciliations, journal entries, and balance sheet and income statement fluctuation analyses, and (iii) designing and documenting the execution of IT general controls for systems and applications impacting internal control over financial reporting, specifically related to user access, change management, computer operations, and program development controls.

While we are performing remediation activities to strengthen our controls, the material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. We will continue to monitor the effectiveness of our remediation measures in connection with our future assessments of the effectiveness of internal control over financial reporting and disclosure controls and procedures, and we will make any changes to the remediation plan and take such other actions that we deem appropriate given the circumstances.

On July 2, 2021, we closed our IPO in which we sold 15,000,000 shares of common stock at a public offering price of $18.00 per share. We received approximately $244.0 million in net proceeds after deducting underwriting discounts and commissions of $18.9 million and offering costs of $7.1 million. On July 28, 2021, the underwriters exercised their option to purchase 1,821,330 shares of common stock and we received additional proceeds of $30.4 million, net of underwriters’ discount and commissions, and offering costs. We used all the proceeds received from the IPO to repay outstanding debt and finance the acquisition of Publica.


*			Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be furnished to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any document so furnished.

**			The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.


Delaware						83-0731995
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

95 Morton St., 8th Floor New York, NY						10014
(Address of principal executive offices)						(Zip Code)


Large accelerated filer	☐	Accelerated filer	☐

Smaller reporting company	☐	Non-accelerated filer	☒

		Emerging growth company	☒


	September 30, 2021		September 30, 2020
Balance, beginning of period	$	4,257	5,843
Additional provision	764		1,647
Receivables written off	(640)		(1,975)
Balance, end of period	$	4,381	5,515


	September 30, 2021			September 30, 2020 (1)
Estimated fair value	$8.16	-	$14.04	$2.29
Expected volatility (%)	65%	-	80%	70%	-	75%
Expected term (in years)	3.00	-	10.00	3.25	-	6.63
Risk-free interest rate (%)	0.46%	-	0.98%	0.26%	-	0.55%
Dividend yield	—			—


		Fair Value
Assets acquired:
Cash and cash equivalents	$	4,482
Accounts receivable		2,391
Property, plant and equipment		46
Prepaid expenses		64
Security deposits		12
Intangible assets:
Developed technology		15,200
Trademarks		2,200
Customer relationships		42,800
Total intangible assets		60,200
Total identifiable assets acquired	$	67,195
Liabilities assumed:
Accounts payable	$	561
Other current liabilities		2
Taxes payable		421
Deferred tax liability		37,615
Total liabilities assumed		38,599
Goodwill		191,721
Total purchase consideration	$	220,317


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three months ended				Nine months ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Revenue	$	80,780	$	61,312	$	229,085	$	164,432
Net loss	$	(12,351)	$	(6,257)	$	(58,566)	$	(42,553)


	Estimated useful life (in years)			September 30, 2021		December 31, 2020
Computer and office equipment	1	-	3	$	9,687	$	9,167
Computer software	3	-	5	237		236
Leasehold improvements	Various			2,119		2,120
Furniture	5 years			335		317
Total property and equipment				12,378		11,840
Less: accumulated depreciation				(10,961)		(9,597)
Total property and equipment, net				$	1,417	$	2,243


	September 30, 2021
	Estimated useful life			Gross book value		Accumulated amortization		Net book value		Weighted average remaining useful life
Customer relationships	5	-	15 years	$	302,060	$	(74,327)	$	227,733	10.7 years
Developed technology	4	-	5 years	130,734		(106,232)		24,502		3.7 years
Trademarks	5	-	9 years	19,700		(6,725)		12,975		5.6 years
Favorable leases	6 years			198		(105)		93		2.8 years
Total				$	452,692	$	(187,389)	$	265,303

	December 31, 2020
	Estimated useful life			Gross book value		Accumulated amortization		Net book value		Weighted average remaining useful life
Customer relationships	5	-	15 years	$	259,329	$	(55,282)	$	204,047	12.5 years
Developed technology	4	-	5 years	115,921		(89,219)		26,702		2.1 years
Trademarks	9 years			17,500		(5,018)		12,482		6.5 years
Favorable leases	6 years			198		(81)		117		3.5 years
Total				$	392,948	$	(149,600)	$	243,348



Goodwill as of December 31, 2020	$	458,586
Publica acquisition	191,721
Impact of exchange rates	(527)
Goodwill as of September 30, 2021	$	649,780


	September 30, 2021		December 31, 2020
Term Loan	$	—	$	345,000
PIK Interest	—		10,539
New Revolver	235,000		—
Less: Unamortized debt issuance costs	(2,318)		(4,468)
Total carrying amount	$	232,682	$	351,071


Year Ending
2021 (remaining three months)	$	—
2022	—
2023	—
2024	—
2025	—
2026	235,000
	$	235,000


	Stock options	Weighted average exercise price		Weighted average remaining contractual life (years)	Aggregate intrinsic value
Outstanding at July 1, 2021	6,725,030	$	7.49	8.38	—
Granted	—	—		—	—
Canceled or forfeited	(48,400)	12.40		—	—
Exercised	—	—		—	—
Outstanding at September 30, 2021	6,676,630	$	7.45	8.12	$	88,397
Vested and expected to vest at September 30, 2021	6,676,630	$	7.45	8.12	—
Exercisable as of September 30, 2021	2,652,032	$	4.17	7.38	$	43,644


	Restricted Stock Units
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of July 1, 2021	1,017,758	$	17.59
Granted (1)	1,353,000	19.86
Canceled or forfeited	(106,777)	17.96
Vested	(26,931)	5.57
Outstanding as of September 30, 2021	2,237,050	$	19.09
Expected to vest as of September 30, 2021	2,237,050


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	48	$	—	$	48	$	—
Sales and marketing	2,419		—		13,227		—
Technology and development	1,820		—		8,829		—
General and administrative	3,854		—		27,569		—
Total	$	8,141	$	—	$	49,673	$	—



Total minimum lease payments	$	50
Less: Amount representing interest	—
Total	$	50


	Three and Nine months ended September 30,
	2021	2020
Options to purchase common stock/member units	6,676,630	5,258,956
Restricted stock units	2,237,050	26,931
Total	8,913,680	5,285,887


	September 30,
	2021		2020
Net Revenue retention of advertising customers (%) (as of the end of the period)	129	%	107	%
Total advertising customers (as of the end of the period)	2,045		1,836
Total number of large advertising customers (as of the end of the period)	183		160


Exhibit Number						Description

2.1*						Securities Purchase Agreement, dated August 9, 2021, by and among Integral Ad Science, Inc., Publica LLC, Publica Investors LLC, NBIC Finance Sarl, Alpine Road Investors LLC and certain individuals thereto (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on August 10, 2021).

3.1						Certificate of Incorporation of Integral Ad Science Holding Corp., dated June 29, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on July 2, 2021).

3.2						Bylaws of Integral Ad Science Holding Corp., dated June 29, 2021 (incorporated by reference to the Company’s Exhibit 3.2 to the Company’s Form 8-K filed on July 2, 2021).

4.1						Registration Rights Agreement, dated July 2, 2021, by and among the Company and the other signatories party thereto (incorporated by reference to the Company’s Exhibit 4.1 to the Company’s Form 8-K filed on July 2, 2021).

10.1						Director Nomination Agreement, dated as of July 2, 2021, by and among the Company and the other signatories party thereto (incorporated by reference to the Company’s Exhibit 10.1 to the Company’s Form 8-K filed on July 2, 2021).

10.2						Form of Indemnification Agreement (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1/A filed on June 14, 2021).

10.3						Integral Ad Science Holding Corp. 2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 12, 2021).

10.4						Integral Ad Science Holding Corp. Amended and Restated 2018 Non-Qualified Stock Option Plan (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1 (No. 333-256770), filed with the Commission on June 14, 2021)

10.5						Integral Ad Science Holding Corp. 2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form S-8 (333-257619), filed on July 1, 2021).

10.6						Credit Agreement, dated as of September 29, 2021, by and among Integral Ad Science, Inc., as borrower, Kavacha Holdings, Inc., as a guarantor, the other loan parties thereto, the lenders party thereto and PNC Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on September 29, 2021).

31.1						Certification of the Chief Executive Officer pursuant to Exchange Act Rules Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2						Certification of the Chief Financial Officer pursuant to Exchange Act Rules Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1**						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, filed herewith.

32.2**						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, filed herewith.

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


	Integral Ad Science Holding Corp. (Registrant)

Date: November 10, 2021	By:	/s/ Joseph Pergola
		Joseph Pergola
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)



/s/ Lisa Utzschneider
Lisa Utzschneider
Director and Chief Executive Officer

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2021	Nov. 09, 2021
Cover [Abstract]
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001842718
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-40557
Entity Registrant Name	INTEGRAL AD SCIENCE HOLDING CORP.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-0731995
Entity Address, Address Line One	95 Morton St.,
Entity Address, Address Line Two	8th Floor
Entity Address, City or Town	New York,
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10014
City Area Code	646
Local Phone Number	278-4871
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	IAS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		153,940,553

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Member units, par value (in usd per share)	$ 4.1322314	$ 4.1322314
Member units, shares authorized (in shares)	0	0
Member units, shares issued (in shares)	0	134,039,494
Member units, shares outstanding (in shares)	0	134,039,494
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares, issued (in shares)	153,940,553	0
Common stock, shares, outstanding (in shares)	153,940,553	0

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net loss	$ (47,615)	$ (35,343)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	45,098	49,185
Stock-based compensation	49,673	0
Deferred tax benefit	(9,966)	(12,431)
Extinguishment of debt	3,721	0
Amortization of debt issuance costs	1,020	1,024
Allowance for doubtful accounts	764	1,647
Non-cash interest expense	394	3,351
Changes in operating assets and liabilities, net of acquired business:
Decrease in accounts receivable	774	2,581
Decrease in unbilled receivables	703	1,542
Increase in prepaid expenses and other current assets	(6,151)	(86)
Decrease (increase) in other long-term assets	(574)	81
Increase in accounts payable and accrued expenses	220	6,644
Decrease in due to related party	(62)	(587)
Increase in accrued rent	220	162
Decrease in deferred revenue	(563)	(1,112)
Net cash provided by operating activities	37,656	16,659
Cash flows from investing activities:
Payment for the acquisition of Publica, net of acquired cash	(166,204)	0
Purchase of property and equipment	(636)	(447)
Acquisition and development of internal use software	(10,011)	(7,568)
Net cash used in investing activities	(176,851)	(8,015)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts and commissions	281,589	0
Payments for offering costs	(4,728)	0
Repayment of long-term debt	(355,934)	0
Proceeds from the New Revolver	235,000	0
Payments for debt issuance costs	(2,318)	0
Principal payments on capital lease obligations	(275)	(1,333)
Cash paid for unit repurchases	(1,202)	(167)
Exercise of stock options	1,075	0
Net cash provided by (used in) financing activities	153,207	(1,500)
Net increase in cash, cash equivalents and restricted cash	14,012	7,144
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,042)	551
Cash, cash equivalents and restricted cash at beginning of period	54,721	30,370
Cash, cash equivalents, and restricted cash, at end of period	66,691	38,065
Cash paid during the period for:
Interest	17,109	15,224
Taxes	1,438	674
Non-cash investing and financing activities:
Deferred offering costs accrued, not yet paid	2,506	0
Assets acquired under capital leases	0	212
Property and equipment acquired included in accounts payable	11	88
Internal use software acquired included in accounts payable	682	894
Conversion of members’ equity to additional paid-in capital	$ 165,385	$ 0

Description of business	9 Months Ended
Description of business	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of business	Description of business Integral Ad Science Holding Corp. and its wholly-owned subsidiaries (together, the “Company”), formerly known as Kavacha Topco, LLC, is a global digital advertising verification company. The Company’s mission is to be the global benchmark for trust and transparency in digital media quality for the world’s leading brands, publishers, and platforms. The Company’s cloud-based technology platform provides actionable insights and delivers independent measurement and verification of digital advertising across all devices, channels, and formats, including desktop, mobile, connected TV (“CTV”), social, display, and video. The Company’s proprietary and Media Rating Council (the “MRC”) accredited Quality Impressions® metric is designed to verify that digital ads are served to a real person rather than a bot, viewable on-screen, and appear in a brand-safe and suitable environment in the correct geography. The Company is an independent, trusted partner for buyers and sellers of digital advertising to increase accountability, transparency, and effectiveness in the market. The Company helps advertisers optimize their ad spend and better measure consumer engagement with campaigns across platforms, while enabling publishers to improve their inventory yield and revenue. On August 9, 2021, the Company acquired Publica LLC (“Publica”). Publica is a leading CTV ad platform and works with many of the world’s biggest broadcasters, TV manufacturers, and over-the-top apps. With this acquisition, the Company is accelerating its CTV strategy to help publishers better monetize their video programming across CTV devices, while building new tools to provide advertisers with much-needed transparency into the quality of this inventory. The Company has its operations within the United States (“U.S.”) in New York, California, Illinois, Washington, Texas and Virginia. Operations outside the U.S. include offices in the United Kingdom (“U.K.”), Germany, Italy, Spain, Sweden, Singapore, Australia, France, Japan, Canada, Brazil, and India. Corporate conversion and initial public offering On February 23, 2021, the Company amended the certificate of formation of Kavacha Topco, LLC. to change the name of the Company to Integral Ad Science Holding LLC and on June 29, 2021, the Company converted to a Delaware corporation pursuant to a statutory conversion and changed its legal name to Integral Ad Science Holding Corp. All of the outstanding member units were converted into shares of common stock with the same voting rights. On June 29, 2021, the Company priced an initial public offering (“IPO”) of its common stock, which closed on July 2, 2021. In the IPO, the Company issued and sold 15,000,000 shares of common stock at a price per share of $18.00. The Company received aggregate proceeds of $244.0 million from the IPO, net of underwriters’ discounts and commissions, and offering costs. The underwriters were granted a 30-day option to purchase up to an additional 2,250,000 shares of common stock from the Company. On July 28, 2021, the underwriters exercised their option to purchase 1,821,330 shares of common stock and the Company received additional proceeds of $30.4 million, net of underwriters’ discount and commissions, and offering costs. The Company used the proceeds received from the IPO to repay outstanding debt and finance its acquisition of Publica, as discussed in Note 9 and Note 3, respectively.

Income taxes	9 Months Ended
Income taxes	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income taxes	Income taxes At the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs. The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the Company’s tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision in the quarter in which the change occurs. For the three months ended September 30, 2021 and 2020, the Company recorded an income tax benefit of $898 and $1,486, respectively. The Company’s effective tax rate for the three months ended September 30, 2021 and 2020 was 8.4% and 25%, respectively. For the nine months ended September 30, 2021 and 2020, the Company recorded an income tax benefit of $4,855 and $10,616, respectively. The Company’s effective tax rate for the nine month periods ended September 30, 2021 and 2020 was 9.3% and 23.1%, respectively. The Company's effective tax rate for the three and nine months ended September 2021 is lower than for the respective three and nine month periods ended September 30, 2020 primarily due to non-deductible stock-based compensation in 2021 as the Company became subject to the provisions of Section 162(m) of the Internal Revenue Code as a result of becoming a public company. The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. The Company is not currently under audit in any taxing jurisdiction. As of September 30, 2021, the Company does not have an accrual relating to uncertain tax positions.

Members’/ Stockholders’ equity	9 Months Ended
Members’/ Stockholders’ equity	Sep. 30, 2021
Stockholders' Equity Note [Abstract]
Members’/ Stockholders’ equity	Members’/ Stockholders’ equity As discussed in Note 1, the Company converted to a Delaware corporation, which created new elements of the capital structure at June 30, 2021, and modified existing elements of the capital structure in place at December 31, 2020. Common stock As of September 30, 2021, our authorized common stock consists of 500,000,000 shares of common stock, par value $0.001 per share and 50,000,000 preferred stock, par value $0.001 per share. The Company issued and sold 15,000,000 shares of common stock in connection with the closing of its IPO on July 2, 2021 and 1,821,330 shares of common stock in connection with the exercise of the underwriters' option that closed on July 28, 2021. The Company issued 2,888,889 shares of common stock in connection with its acquisition of Publica on August 9, 2021. For the three months and nine months ended September 30, 2021, the Company also issued 26,931 shares of common stock, respectively for vested RSUs. Members’ equity Prior to the IPO, the Company was an affiliate of Vista, was a single member LLC, and the Company’s Board of Directors, through the Kavacha Topco, LLC Amended and Restated Limited Liability Company Agreement (the “Operating Agreement”), had the authority to admit additional members. Under the terms of the Operating Agreement, the members of the Company were not obligated for debt, liabilities, contracts or other obligations of the Company. Profits and losses are allocated to members as defined in the Operating Agreement. In conjunction with the pricing of the IPO, the Operating Agreement was terminated, and the Company converted from a Delaware domestic limited liability company to a Delaware domestic corporation. All outstanding member units were converted into 134,203,403 shares of common stock of the Company on a proportion of 1 member unit for 242 shares of common stock. For the three months ended September 30, 2021, and 2020, the Company repurchased 0 and 14,762 shares of common stock from members of the Company, for $0 and $71, respectively. The repurchases in excess of par value for the three months ended September 30, 2020 were $10. For the nine months ended September 30, 2021 and 2020, the Company repurchased 99,946 and 35,090 shares of common stock from members of the Company prior to the IPO, for $1,204 and $167, respectively. The repurchases in excess of par value for the nine months ended September 30, 2021 and 2020 were $791 and $22, respectively. The repurchase of shares has been accounted for as a reduction in members’/shareholders’ equity in these condensed consolidated financial statements.

Fair value disclosures	9 Months Ended
Fair value disclosures	Sep. 30, 2021
Fair Value Disclosures [Abstract]
Fair value disclosures	Fair value disclosuresFinancial instrumentsThe carrying value of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximated fair value due to their short maturities. The carrying value of long-term debt approximates its fair value based on Level 2 inputs as the principal amounts outstanding are subject to variable interest rates that are based on market rates (see Note 9).

Related-party transactions	9 Months Ended
Related-party transactions	Sep. 30, 2021
Related Party Transactions [Abstract]
Related-party transactions	Related-party transactions The Company incurs expenses for consulting services and other expenses related to services provided by Vista Consulting Group, LLC (“VCG”). For the three months ended September 30, 2021 and 2020, the Company incurred expenses of $20 and $72, respectively. For the nine months ended September 30, 2021 and 2020, the Company incurred expenses of $153 and $878, respectively. These costs were included in general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to VCG as September 30, of 2021 and December 31, 2020 were $10 and $39, respectively. The Company incurs various travel and other expenses related to services provided by Vista Equity Partners Management, LLC (“VEP”). For the three months ended September 30, 2021 and 2020, the Company incurred expenses of $22 and $18, respectively. For the nine months ended September 30, 2021 and 2020, the Company incurred expenses of $23 and $32, respectively. These costs were included in general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to VEP as of September 30, 2021 and December 31, 2020 were $2 and $101, respectively. The Company has subscription software arrangements with companies owned by Vista Equity Partners as follows: Total expenses incurred by the Company for Mediaocean LLC (“Mediaocean”) (the Vista Equity Partners related party) was $30 for both the three months ended September 30, 2021 and 2020. Total expenses incurred by the Company for Mediaocean was $90 for the nine months ended September 30, 2021 and 2020. These costs were included in cost of revenue. Amounts due to Mediaocean as of September 30, 2021 and December 31, 2020 were both $10. Total expenses incurred by the Company for Navex Global, Inc. (“Navex”) (the Vista equity Partners related party) were $4 and $7, respectively, for the three months ended September 30, 2021 and 2020. Total expenses incurred by the Company for Navex were $16 and $22, respectively, for the nine months ended September 30, 2021 and 2020. These costs were included in general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to Navex as of September 30, 2021 and December 31, 2020 were $0 and $0. There were no training expenses incurred with Cvent, Inc. (“Cvent”) (the Vista Equity Partners related party), for the three months ended September 30, 2021 and 2020. Total training expenses with Cvent, were $20 and $0, respectively, for the nine months ended September 30, 2021 and 2020. These costs were included in sales and marketing expenses. There were no amounts due as of September 30, 2021 and December 31, 2020. Total expenses incurred by the Company for Marketo, Inc. (“Marketo”) (the Vista equity Partners related party) were $39 and $32, respectively, for the three months ended September 30, 2021 and 2020. Total expenses incurred by the Company for Marketo were $108 and $97, respectively, for the nine months ended September 30, 2021 and 2020. These costs were included in sales and marketing expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to Marketo as of September 30, 2021 and December 31, 2020 were $40 and $68, respectively. Total expenses incurred by the Company for Poppulo, Inc. (“Poppulo”) (the Vista equity Partners related party) were $6 and $3, respectively, for the three months ended September 30, 2021 and 2020. Total expenses incurred by the Company for Poppulo were $19 and $10, respectively, for the nine months ended September 30, 2021 and 2020. These costs were included in sales and marketing expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to Poppulo as of September 30, 2021 and December 31, 2020 were $0. Total expenses incurred by the Company for Lucid, Inc. (“Lucid”) (the Vista equity Partners related party) were $2 and $4, respectively, for the three months ended September 30, 2021 and 2020. Total expenses incurred by the Company for Lucid were $5 and $11, respectively, for the nine months ended September 30, 2021 and 2020. The majority of these costs were included in technology and development in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to Lucid as of September 30, 2021 and December 31, 2020 were $0 and $13, respectively. Total expenses incurred by the Company for A Cloud Guru, Inc. (“A Cloud Guru”) (the Vista equity Partners related party) were $4 and $4, respectively, for the three months ended September 30, 2021 and 2020. Total expenses incurred by the Company for A Cloud Guru were $11 and $15, respectively, for the nine months ended September 30, 2021 and 2020. These costs were included in technology and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to A Cloud Guru as of September 30, 2021 and December 31, 2020 were $0 and $15, respectively.

Basis of presentation and summary of significant accounting policies (Policies)	9 Months Ended
	Sep. 30, 2021
Accounting Policies [Abstract]
Basis of presentation	Basis of presentationThe Company’s condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the financial position, results of operations and cash flows for all periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying interim condensed consolidated balance sheet as of September 30, 2021, the condensed consolidated statements of operations and comprehensive loss, of cash flows and of members’/stockholders’ equity for the three and nine months ended September 30, 2021 and 2020, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary to state fairly the consolidated financial position of the Company. All adjustments made were of a normal recurring nature. The results for the three months and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, or for any future period. The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements for the years ended December 31, 2020 and 2019. There have been no significant changes to these policies that have had a material impact on the Company’s condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2021. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our final IPO prospectus filed with the Securities and Exchange Commission (“SEC”) on July 1, 2021.
Basis of consolidation	Basis of consolidationThe condensed consolidated financial statements include the accounts of Integral Ad Science Holding Corp. and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.
Use of estimates	Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates include the allocation of purchase price consideration in the business combination and the related valuation of acquired assets and liabilities, the estimated useful lives of our property and equipment, intangible assets and internal use software, the allowance for doubtful accounts, and goodwill impairment testing; the assumptions used to calculate stock-based compensation; and the realization of deferred tax assets. The Company bases its estimates on past experience, market conditions, and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Beginning in the first quarter of 2020, the COVID-19 pandemic has negatively impacted, and may continue to negatively impact, the macroeconomic environment in the U.S. and globally, as well as the Company’s business, financial condition and results of operations. In the quarters subsequent to the second quarter of 2020, the underlying demand for the Company’s services has stabilized. Due to the evolving and uncertain nature of COVID-19, it is reasonably possible that it could still materially impact the Company’s estimates, particularly those noted above that require consideration of forecasted financial information, in the near to medium term. The ultimate impact of the COVID-19 pandemic will depend on numerous evolving factors that the Company may not be able to accurately predict, including the duration of the pandemic, new variants and their effects, vaccination rates and effectiveness, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic, macro-economic effects, such as supply chain constraints, labor shortages and inflationary pressures, and other economic and operational conditions the Company may face.
Accounts receivable, net	Accounts receivable, net Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts. The allowance is estimated based on management’s knowledge of its customers’ financial condition, credit history, and existing economic conditions. Invoices are typically issued with net 30-days to net 90-days terms. Account balances are considered delinquent if payment is not received by the due date, and the receivables are written off when deemed uncollectible. These costs are recorded in general and administrative expenses.
Stock-based compensation	Stock-based compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures as they occur. The Company used the following assumptions in valuing its time-based service options, which vest over a period of time subject to continued employment (“Time-Based Options”) and return target options (“Return-Target Options”), which vest upon a realized cash return of the equity investment of Vista Equity Partners, the Company’s equity sponsor and funds controlled by Vista Equity Partners (“Vista”) and registration of the shares held by Vista. Expected term — For time-based awards, the estimated expected term of options granted is generally calculated as the vesting period plus the midpoint of the remaining contractual term, as the Company does not have sufficient historical information to develop reasonable expectations surrounding future exercise patterns and post-vesting employment termination behavior. For awards subject to market and performance conditions, the expected term represents the period of time that the options granted are expected to be outstanding. Expected volatility — Since the Company does not have substantive trading history of its common stock, volatility is estimated based upon observed option-implied volatilities for a group of peer companies. The Company believes this is the best estimate of the expected volatility over the weighted-average expected term of its option grants. Risk-free interest rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury instruments with terms approximately equal to the expected term of the option. Expected dividend — The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company currently has no history or expectation of paying cash dividends on its units. Fair value —Prior to the IPO, because there was no public market for the Company’s common stock/units, the board of directors determined the best estimate of the fair value of the Company’s option grants, based on reasonable judgment and numerous objective and subjective factors, including independent third-party valuations of the Company’s common stock/units, operating and financial performance, and general and industry-specific economic outlook, amongst other factors. Following the pricing of the IPO, the Company’s shares are traded in the public market, and accordingly the Company uses the applicable closing price of its common stock to determine fair value.
Deferred offering costs	Deferred offering costs Deferred offering costs are capitalized and consist of fees incurred in connection with our IPO and include legal, accounting, printing, and other IPO-related costs. Upon the completion of our IPO, which occurred on July 2, 2021, these deferred costs were reclassified to members’/stockholders’ equity and recorded against the proceeds from the offering. Deferred offering costs of $7,233 were recognized within additional paid-in capital on the Company's condensed consolidated balance sheets as of September 30, 2021. No such costs were incurred as of December 31, 2020.
Recently adopted accounting pronouncements & Accounting pronouncements not yet adopted	Recently adopted accounting pronouncements In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”) effective January 1, 2021, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company early adopted ASU No. 2019-12, which did not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU No. 2018-15”), which requires customers in a cloud computing arrangement that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets. The guidance requires certain costs incurred during the application development stage to be capitalized and other costs incurred during the preliminary project and post-implementation stages to be expensed as they are incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrange is ready for its intended use. A customer’s accounting for the hosting component of the arrangement is not affected. The Company adopted this guidance on January 1, 2021 on a prospective basis. The adoption of ASU 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements. Accounting pronouncements not yet adoptedIn March 2020, the FASB issued ASU 2020-4, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU No. 2020-4”) which intends to address accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The amendments in ASU No. 2020-4 provide operational expedients and exceptions for applying U. S GAAP to contracts, hedging relationships and other transactions to affected by reference rate reform if certain criteria are met. The amendments in ASU No. 2020-4 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022. The Company intends to elect to apply certain of the optional expedients when evaluating the impact of reference rate reform on its debt instruments that reference LIBOR. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU No. 2016-13”) which is intended to provide more decision-useful information about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU No. 2016-13 revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including, but not limited to accounts receivable. This guidance will be effective for the Company beginning January 1, 2023, including interim periods within that reporting period. Early adoption is permitted and the update allows for a modified retrospective method of adoption. The Company is currently evaluating the potential effect that adopting this guidance will have on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-2, “Leases (Topic 842)” (“ASU No. 2016-2”). Under ASU No. 2016-2, lessees will be required to put most leases on their balance sheets but to recognize expenses in the income statement in a manner similar to current accounting. ASU No. 2016-2 also eliminated the current real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. The updated guidance will be effective for the Company beginning January 1, 2022, with early adoption permitted. Upon adoption, entities will be required to use the modified retrospective approach for leases that exist, or are entered into, after the beginning of the earliest comparative period in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), Targeted Improvements, which allows entities to not apply the new leases standard, including its disclosure requirements, in the comparative periods they present in their financial statements in the year of adoption. The Company expects to elect the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The Company will make a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. The other practical expedients available under the guidance are being evaluated. The Company is evaluating the lease portfolio, process, control and policy change requirements. The Company's evaluation of these requirements has progressed and the Company continues to gather the necessary data elements for the lease population. The Company does not expect the amount or classification of rent expense in its statement of condensed consolidated statements of operations to be affected by the adoption of ASU No. 2016-2. The Company expects that the primary effect of the adoption of ASU No. 2016-2 will be the recognition of a right-of-use asset and lease liability to reflect the Company's rights and obligations under its operating leases. The Company will also be required to provide the additional disclosures stipulated in ASU No. 2016-2. The adoption of ASU No. 2016-2 will not have an impact on the leverage calculation set forth in the agreements governing the outstanding debt of the Company, because the leverage calculations are not affected by the liability that will be recorded upon adoption of the new standard. The Company is continuing to evaluate the potential impacts that adopting this guidance will have on its condensed consolidated financials and expects the adoption of ASU No. 2016-2 will have a material impact on the Company's condensed consolidated balance sheet.

Description of business - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended	9 Months Ended
	Jul. 28, 2021	Jul. 02, 2021	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Subsidiary, Sale of Stock [Line Items]
Proceeds from issuance in IPO				$ 281,589	$ 0
Common Stock
Subsidiary, Sale of Stock [Line Items]
Stock issued during the period (in shares)			16,821,330	16,821,330
Common Stock \| IPO
Subsidiary, Sale of Stock [Line Items]
Stock issued during the period (in shares)		15,000,000
Issue price per share (in usd per share)		$ 18.00
Proceeds from issuance in IPO		$ 244,000
Common Stock \| Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Stock issued during the period (in shares)	1,821,330
Period of underwriter option		30 days
Common stock shares subscribed but not issued (shares)		2,250,000
Additional proceeds from underwriters, net of discount and commissions	$ 30,400

Basis of presentation and summary of significant accounting policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 63,777	$ 51,734
Short term restricted cash	213	187
Long term restricted cash (held in other long-term assets)	2,701	2,800
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows	$ 66,691	$ 54,721	$ 38,065	$ 30,370

Basis of presentation and summary of significant accounting policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 4,257	$ 5,843
Additional provision	764	1,647
Receivables written off	(640)	(1,975)
Balance, end of period	$ 4,381	$ 5,515

Basis of presentation and summary of significant accounting policies - Valuation Assumptions of Stock Options (Details) - $ / shares	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value (in usd per share)		$ 2.29
Dividend yield	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value (in usd per share)	$ 8.16
Expected volatility (%)	65.00%	70.00%
Expected term (in years)	3 years	3 years 3 months
Risk-free interest rate (%)	0.46%	0.26%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value (in usd per share)	$ 14.04
Expected volatility (%)	80.00%	75.00%
Expected term (in years)	10 years	6 years 7 months 17 days
Risk-free interest rate (%)	0.98%	0.55%