Basis of Presentation and Consolidation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Basis of Presentation and Consolidation and Summary of Significant Accounting Policies

Schedule of share-based payment award, stock options, valuation assumptions

	Year Ended December 31,
	2023			2022
Grant date fair value	$	2.44		$	1.01
Expected term		6.0			6.0
Expected volatility		69	%		63	%
Risk-free interest rate		3.70	%		3.25	%
Exercise price	$	3.78		$	1.68
Dividend yield		—			—

Schedule of changes in the provision for credit losses

The following table presents the changes in the provision for credit losses (in thousands):

	December 31,
	2023		2022
Beginning balance	$	4	$	41
Provision for credit losses		369		10
Write-offs, net of recoveries		(29)		(47)
Ending balance	$	344	$	4

Schedule of accrued liabilities

The components of accrued liabilities on the balance sheet as of December 31, 2023 and 2022 are as follows (in thousands):

	December 31,
	2023		2022
Accrued compensation and benefits	$	2,789	$	3,129
Accrued expenses		631		207
Accrued severance		189		—
Accrued litigation settlement (1)		171		429
Accrued interest		36		13
Total accrued liabilities	$	3,816	$	3,778

(1) In July 2022, the Company entered into a litigation settlement agreement with a vendor of Huddled Masses related to a delinquent balance from 2019 and agreed to pay a total of $0.5 million with monthly installment payments over 24 months beginning September 1, 2022.

Schedule of correction of immaterial error in prior consolidated financial statements

The following tables reflect the impact of the correction of these immaterial errors (in thousands):

Consolidated Balance Sheet as of December 31, 2022	As Reported		As Revised
Accrued liabilities	$	4,778	$	3,778
Total current liabilities	$	25,572	$	24,572
Total liabilities	$	53,531	$	52,531
Class A Common Stock Units		3,253		2,900
Class A Common Stock Amount	$	3	$	3
Additional paid-in capital	$	8,224	$	2,611
Accumulated deficit	$	(3,643)	$	(344)
Total stockholders’ equity attributable to Direct Digital Holdings, Inc.	$	4,595	$	2,281
Noncontrolling interest	$	—	$	3,314
Total stockholders’ equity	$	4,595	$	5,595
Consolidated Statement of Operations for the Twelve Months Ended December 31, 2022	As Reported		As Revised
Net income attributable to non-controlling interests	$	—	$	3,962
Net income attributable to Direct Digital Holdings, Inc.	$	4,167	$	205
Basic net income per share	$	0.33	$	0.11
Diluted net income per share	$	0.33	$	0.11
Weighted-average number of shares of common stock outstanding - basic		12,638		2,848
Weighted-average number of shares of common stock outstanding - dilutive		12,638		2,891
Consolidated Statement of Changes in Stockholders' Equity as of December 31, 2022	As Reported		As Revised
Class A Common Stock Units		3,253		2,900
Class A Common Stock Amount	$	3	$	3
Additional Paid-in Capital	$	8,224	$	2,611
Accumulated Deficit	$	(3,643)	$	(344)
Noncontrolling Interest	$	—	$	3,314
Total Stockholders’ Equity	$	4,595	$	5,595
Consolidated Statement of Changes in Stockholders' Equity for the Twelve Months Ended December 31, 2022
Distributions to members (Accumulated Deficit)	$	(3,141)	$	—
Distributions to holders of LLC Units (NCI)	$	—	$	(3,141)
Issuance of restricted stock units		378		—
Restricted stock forfeitures units		(25)		—
Net loss prior to Organizational Transactions	$	—	$	(464)
Net income (Accumulated Deficit)	$	4,167	$	669
Net income (NCI)	$	—	$	3,962