MNTN Inc.
02/19/2026 | Press release | Distributed by Public on 02/19/2026 05:03
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and present business environment and is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-K. Some of the numbers included herein have been rounded for the convenience of presentation. Some of the information included in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Cautionary Note Regarding Forward-Looking Statements and Summary Risk Factors" and "Risk Factors" sections of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
MNTN is on a mission to transform CTV into a next-generation performance marketing channel.
Our revolutionary PTV software platform allows marketers, for the first time, to combine the powerful storytelling format of TV advertising with the targeting and measurement capabilities of paid search and social advertising. Our self-serve software enables marketers to precisely target audiences and then directly tie each view to a purchase or other action. Marketers set performance goals, such as ROAS, and our algorithms continuously optimize a campaign around key metrics to drive higher performance. Since we launched our PTV platform, our company has experienced rapid growth due to the robust performance our platform delivers to our customers.
From emerging companies to large brands, marketers can easily manage CTV campaigns with minimal dedicated resources. Our self-serve platform provides a single user interface across campaign setup, audience targeting, programmatic bidding, ad serving, attribution and reporting.
Our company was founded in 2009 by Mark Douglas, a pioneer and thought leader in the performance marketing industry. We set out to help marketers target households with performance display advertisements across desktop, mobile and other devices. In 2018, we saw an opportunity in CTV, and we began developing purpose-built CTV technologies leveraging our existing audience targeting and measurement expertise. Since the launch of our PTV offering, we have quickly advanced our key technological capabilities (e.g., data integration, algorithms, user interface, reporting, etc.).
Initial Public Offering
On May 23, 2025, we closed our initial public offering ("IPO"), in which 8,400,000 shares of our Class A common stock were issued and sold at $16.00 per share ("IPO Price"). We received net proceeds of $114.8 million after deducting underwriting discounts and commissions of $9.1 million and offering costs of approximately $10.6 million. Certain of our existing stockholders ("Selling Stockholders") offered and sold an additional 3,300,000 shares of our Class A common stock at the IPO Price in a secondary offering, for which we received no proceeds, and all net proceeds were received by the Selling Stockholders. In connection with the secondary offering, on May 23, 2025, the underwriters for the IPO purchased an additional 1,755,000 shares of Class A common stock pursuant to the exercise of their option in full to purchase additional shares from the Selling Stockholders at the IPO Price less underwriting discounts and commissions, with all net proceeds going to the Selling Stockholders.
Business Model
Customers use our PTV software platform to drive performance marketing outcomes measured by ROAS. Customers set the parameters of their campaign, including budget, duration and desired performance goals, and our platform automatically executes the campaign using proprietary algorithms based on the parameters defined by our customers. Our leading PTV technology and business model help drive our ability to efficiently attract new customers to our platform, retain them, and increase their ad spend. We expect our revenue to continue to increase as CTV adoption expands and more brands increase their PTV spend.
We generate and grow our revenue primarily by driving new customers to our platform and through existing customers increasing their spend on our platform. Our initial focus was on mid-sized businesses, and subsequently, we began expanding our focus to small businesses, many of whom have never advertised on TV before.
Over the last several years, we made significant investments in our long-term growth. We invested in technology, development and operations to enhance platform features in our infrastructure, including our information technology, financial and administrative systems and controls, to support our operations, and in sales and marketing to acquire new customers and grow usage by existing customers. We believe the initial benefits of these investments were realized in our 2024 and 2025 financial results. We plan to continue to invest in the long-term growth of the Company, including development of cutting-edge technology, as well as continued investment in customer acquisition and customer growth. Given the operating leverage in our business and the investments that we have made, we expect to continue to improve our Adjusted EBITDA margin in the long term as our revenue continues to scale.
Key Performance Indicator and Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements, we use the following key performance indicator and non-GAAP financial measures to evaluate the health of our business, measure our performance, identify trends affecting our growth, formulate goals and objectives and make strategic decisions. Accordingly, we believe our key performance indicator and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. Our key performance indicator and non-GAAP financial measures are presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled metrics or measures presented by other companies.
PTV Customers
PTV Customers refers to the aggregate number of unique customers that use our PTV platform as part of their CTV campaigns in the twelve-month period preceding the date indicated. We believe the number of PTV Customers is an important key performance indicator for investors because it helps assess the reach of our PTV platform as well as our brand awareness.
The following table summarizes our key performance indicator for each period presented below:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
|
PTV Customers
|
3,632 | 2,225 | |||||||||
Since 2019, our PTV Customers increased from 142 to 3,632 in the year ended December 31, 2025. Our PTV Customers increased 63.2% in the year ended December 31, 2025 from the year ended December 31, 2024. We attribute this growth to new customer acquisitions due to continued customer adoption of PTV and our continued expansion of our overall SMB footprint, including small businesses.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table sets forth Adjusted EBITDA and Adjusted EBITDA margin for the periods set forth below and their most directly comparable GAAP measures:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net loss (in thousands) | $ | (6,426) | $ | (32,877) | |||||||
|
Adjusted EBITDA (in thousands)(1)
|
$ | 67,986 | $ | 38,803 | |||||||
| Net loss margin | (2.2) | % | (14.6) | % | |||||||
|
Adjusted EBITDA margin(1)
|
23.4 | % | 17.2 | % | |||||||
(1) See section "Non-GAAP Financial Measures" for more information and a reconciliation to the most directly comparable GAAP financial measure.
Non-GAAP Financial Measures
In this Form 10-K, we use certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin. EBITDA is defined as net loss adjusted to exclude depreciation and amortization expense, interest income (expense), net and income tax provision. Adjusted EBITDA is defined as net loss adjusted to exclude depreciation and amortization expense, interest income (expense), net and income tax provision, as further adjusted to exclude stock-based compensation expense, fair value adjustments on outstanding warrants, contingent liabilities, embedded derivatives and convertible debt, acquisition costs including legal costs associated with prior acquisitions, legal settlements and loss on debt extinguishment, which are items that we believe are not indicative of our core operating performance. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue.
Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures of our performance, are not defined by or presented in accordance with GAAP and should not be considered in isolation or as an alternative to net loss, net loss margin or any other performance measure prepared in accordance with GAAP. Adjusted EBITDA and Adjusted EBITDA margin are presented because we believe that they provide useful supplemental information to investors, analysts, and rating agencies regarding our operating performance and our capacity to incur and service debt and are frequently used by these parties in evaluating companies in our industry. By presenting Adjusted EBITDA and Adjusted EBITDA margin, we provide a basis for comparison of our business operations between periods by excluding items that we do not believe are indicative of our core operating performance. We believe that investors' understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Additionally, management uses Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of our performance because they assist us in comparing the operating performance of our business on a consistent basis between periods, as described above.
Although we use Adjusted EBITDA and Adjusted EBITDA margin as described above, Adjusted EBITDA and Adjusted EBITDA margin have significant limitations as analytical tools. Some of these limitations include:
• such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
• such measures do not reflect changes in, or cash requirements for, our working capital needs;
• such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
• such measures do not reflect our tax expense or the cash requirements to pay our taxes;
• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
• other companies in our industry may calculate such measures differently than we do, thereby further limiting their usefulness as comparative measures.
Due to these limitations, Adjusted EBITDA and Adjusted EBITDA margin should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted EBITDA and Adjusted EBITDA margin includes adjustments for items that we believe are not indicative of our core operating performance. It is reasonable to expect that these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period-to-period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results between periods and with the operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. Nevertheless, because of the limitations described above, management does not view Adjusted EBITDA and Adjusted EBITDA margin in isolation and also uses other measures, such as revenue, operating loss and net loss, to measure operating performance.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable GAAP financial performance measure, which is net loss:
| Years Ended December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Net loss | $ | (6,426) | $ | (32,877) | |||||||
| Interest (income) expense, net | (3,485) | 6,920 | |||||||||
|
Income tax provision
|
(9,574) | 5,786 | |||||||||
| Depreciation and amortization expense | 9,870 | 8,345 | |||||||||
| EBITDA | (9,615) | (11,826) | |||||||||
| Stock-based compensation expense | 31,694 | 31,199 | |||||||||
| Fair value adjustments | 17,149 | 18,574 | |||||||||
| Acquisition costs | 2,252 | 542 | |||||||||
| Legal settlements | 70 | 314 | |||||||||
| Loss on debt extinguishment | 26,436 | - | |||||||||
| Adjusted EBITDA | $ | 67,986 | $ | 38,803 | |||||||
| Revenue | $ | 290,093 | $ | 225,571 | |||||||
| Net loss | (6,426) | (32,877) | |||||||||
| Net loss margin | (2.2) | % | (14.6) | % | |||||||
| Revenue | $ | 290,093 | $ | 225,571 | |||||||
| Adjusted EBITDA | 67,986 | 38,803 | |||||||||
| Adjusted EBITDA margin | 23.4 | % | 17.2 | % | |||||||
Factors Affecting Our Performance
Growth of the CTV Ad Market and Marketers Using CTV as a Performance Marketing Channel
Our growth and operating results will be impacted by the overall growth of the CTV ad market, which relies upon the continued consumer adoption of CTV and the proliferation of marketing budgets for TV. CTV has grown rapidly in recent years, and we expect that any acceleration, or deceleration, of this trend may affect demand for our platform.
Our success also depends on marketers using CTV as a performance marketing channel. As the first brand-direct performance marketing platform for TV, we believe we are defining the PTV market and are uniquely positioned to benefit from this transition. We anticipate our market opportunity will expand over time as our outcome-based platform attracts performance marketers to TV for the first time.
Ability to Acquire New Customers and Increase Sales to Existing Customers
We focus our new customer acquisition primarily on SMB companies that currently engage in performance marketing through paid search and social channels, many of whom have never advertised on TV before, as well as existing TV marketers seeking greater targeting, attribution and reporting capabilities. We also leverage relationships with agencies and
other partners to bring additional marketers onto the platform. We gain new customers primarily through our direct sales and marketing efforts. The majority of our new customers come to MNTN through inbound leads. Our ability to add new customers is dependent upon our ability to reach and message future customers through our PTV platform. Our ability to add new customers is also dependent upon our ability to optimize our sales process. These efforts have led to significant growth of our PTV Customers. We believe we have significant growth opportunity as we continue to expand our overall SMB footprint, including small businesses. We are continuously focusing on driving innovation to improve the performance of our platform, the customer experience, and their success on our platform to drive increased spend.
Our success depends on our ability to achieve and maintain customers' ROAS and other campaign goals and increase incremental usage and spend on our platform. We seek to increase our share of advertising spend from existing customers by increasing the value our platform provides them, driving larger and more frequent campaigns through our platform. We plan to continue to invest in research and development to introduce new products and features to enhance our platform and to acquire additional sources of data that further accelerate our methodologies.
Investment in Innovation
We believe our commitment to product innovation is a key driver to building and deepening relationships with our customers and fueling growth. We have in the past invested, and plan to continue to invest, substantially in our platform to maintain our market-leading position in PTV by continuing to improve our targeting, usability of data, measurement, attribution and campaign optimization capabilities, refine our algorithms and increase automation. We continuously introduce new features, functionalities and integrations to enhance our platform's value to customers and our overall competitiveness. Our ability to successfully innovate and integrate new technologies by assessing customer needs, industry trends, and competitors' alternatives is critical to our success.
Investment in Talent
As of December 31, 2025, we had 534 full-time team members. Hiring productive and diverse talent is a key driver of our success and we expect to continue to grow headcount as our business scales. We plan to further invest in research and development to extend our data and technology lead and to enhance our platform. We also expect to incur additional general and administrative expenses to support our growth as a publicly traded company. Our headcount may increase through direct hires or through acquisitions of companies or teams.
Seasonality
We experience seasonal fluctuations in revenue due to increased customer spend during the fourth quarter holiday season and around notable consumer viewing events and reduced customer spend during the first quarter, immediately after the holiday season. This trend is especially relevant for direct-to-consumer and e-commerce brands, many of which use our platform to advertise on TV. Fourth quarter revenue comprised 30.0% and 30.9% of our revenue for the years ended December 31, 2025 and 2024, respectively. First quarter revenue comprised 22.2% and 19.4% of our revenue for the years ended December 31, 2025 and 2024, respectively. We expect revenue to fluctuate in the future based on seasonal and event-driven factors; however, historical trends may not be indicative of future results given evolving industry dynamics, changes to consumer spending patterns, expansion of our customer base into new verticals, or potential changes to our business model.
Macroeconomic factors
Macroeconomic factors, such as labor shortages, inflation, interest rate volatility, changes in foreign currency exchange rates, instability in the global financial system, supply chain disruptions, increased tariffs and other trade barriers, uncertainty about economic recovery or growth, and instability in political or market conditions generally have affected, and continue to have an effect, on our markets and industry. Any worsening of macroeconomic conditions in future periods could have a negative effect on our financial results.
Components of Our Results of Operations
We have one primary business activity and operate in one operating and reportable segment.
Revenue
Our revenue is primarily generated through usage-based fees from customers based on their level of ad spend on our platform, net of amounts paid to suppliers for the cost of advertising inventory. We expect our revenue to continue to increase as CTV adoption expands and more brands increase their PTV ad spend. Additionally, we generate revenue through the QuickFrame creative marketplace provided to our customers, and generated revenue through Maximum Effort Marketing's creative services prior to its divestiture on April 1, 2025.
Cost of Revenues
Cost of revenues consists primarily of hosting costs, data costs, third-party service fees, and personnel costs. Personnel costs included in cost of revenues include salaries, benefits, bonuses, and stock-based compensation and are primarily attributable to personnel who support our platform and who design and manage the production of video ads. We capitalize costs associated with software that is developed or obtained for internal use and amortize the costs associated with our revenue-producing platform in cost of revenues over their estimated useful lives. Although we expect that the long-term cost of revenues will remain relatively consistent as a percentage of revenues it may fluctuate from period-to-period as a result of the level and timing of costs to support our platform.
Technology and Development Expense
Technology and development expense consists of personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) and SaaS and other tools related to the development and operation of our platform. 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 sheets. We expect that our technology and development expense will increase in absolute dollars as our business grows and we continue to invest in optimization and feature expansion of our platform as well as technology improvements to support and drive efficiency in our operations.
Sales and Marketing Expense
Sales and marketing expense consists of personnel-related costs (including salaries, commissions, bonuses, benefits, stock-based compensation), as well as costs related to promotional activities such as online advertising, branding products and trade shows as well as fees paid to third parties for marketing and product research. Commission costs are expensed as incurred. We expect sales and marketing expenses to grow in absolute dollars as we add personnel to increase the number of customers and expand their adoption of our platform. Sales and marketing expense as a percentage of revenue may fluctuate from period-to-period based on revenue levels and the timing of our investments, which may be impacted by the revenue seasonality in our industry and business as described further above.
General and Administrative Expense
General and administrative expense consists of personnel-related costs (including salaries, bonuses, benefits, stock-based compensation) related to our executive, finance and accounting, human resources and administrative departments. General and administrative expense also includes fees for third-party professional services, including consulting, legal and accounting services, merchant service fees, charitable contributions and other employee-related costs. We expect that our general and administrative expense will increase in absolute dollars as we invest in corporate infrastructure and incur additional expenses associated with our operations as a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs associated with developing the requisite infrastructure required for sufficient internal controls.
Amortization of Acquired Intangibles
Amortization of acquired intangibles consists of the amortization expense associated with the intangible assets purchased through our prior acquisitions.
Other Income (Expense)
Interest Income (Expense), Net. Interest Income (Expense), Net consists of interest expense incurred on our outstanding borrowings under our 2023 Convertible Notes, Revolving Credit Facility, and the short-term note payable incurred in connection with the QuickFrame Acquisition, as well as accretion of debt discount on our 2023 Convertible Notes, offset by interest income earned on our cash and cash equivalents and short-term notes receivable.
Other Expense, Net. Other Expense, Net primarily consists of non-operating gains or losses, including fair value adjustments related to outstanding warrants, embedded derivative liabilities, convertible debt and contingent liabilities, and gains or losses on debt extinguishment.
Income Tax Provision
Our income tax provision primarily consists of U.S. federal and state income taxes, adjusted for allowable credits, deductions, and valuation allowance against deferred tax assets. Our effective tax rate is affected by tax rates in the jurisdictions in which
we operate and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as share-based compensation, and changes in our valuation allowance against deferred tax assets.
Results of Operations for the Year Ended December 31, 2025, Compared with the Year Ended December 31, 2024
The following table sets forth our consolidated results of operations for the periods presented:
|
(dollars in thousands)
|
Years Ended December 31, |
Change
|
|||||||||||||||||||||
| 2025 | 2024 |
$
|
%
|
||||||||||||||||||||
| Revenue | $ | 290,093 | $ | 225,571 | $ | 64,522 | 28.6 | % | |||||||||||||||
| Cost of revenues | 66,153 | 64,051 | 2,102 | 3.3 | % | ||||||||||||||||||
| Gross profit | 223,940 | 161,520 | 62,420 | 38.6 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Technology and development | 49,239 | 32,662 | 16,577 | 50.8 | % | ||||||||||||||||||
| Sales and marketing | 90,370 | 76,102 | 14,268 | 18.7 | % | ||||||||||||||||||
| General and administrative | 57,657 | 51,772 | 5,885 | 11.4 | % | ||||||||||||||||||
| Amortization of acquired intangibles | 2,630 | 2,630 | - | - | % | ||||||||||||||||||
| Total operating expenses | 199,896 | 163,166 | 36,730 | 22.5 | % | ||||||||||||||||||
| Operating income (loss) | 24,044 | (1,646) | 25,690 | (1560.8) | % | ||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income (expense), net | 3,485 | (6,920) | 10,405 | (150.4) | % | ||||||||||||||||||
| Other expense, net | (43,529) | (18,525) | (25,004) | 135.0 | % | ||||||||||||||||||
|
Total other income (expense)
|
(40,044) | (25,445) | (14,599) | 57.4 | % | ||||||||||||||||||
| Loss before income tax provision | (16,000) | (27,091) | 11,091 | (40.9) | % | ||||||||||||||||||
|
Income tax provision
|
(9,574) | 5,786 | (15,360) | (265.5) | % | ||||||||||||||||||
| Net loss | $ | (6,426) | $ | (32,877) | $ | 26,451 | (80.5) | % | |||||||||||||||
The following table sets forth our consolidated results of operations for the specified periods as a percentage of our revenue for those periods presented:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Revenue | 100.0 | % | 100.0 | % | |||||||
| Cost of revenues | 22.8 | 28.4 | |||||||||
| Gross profit | 77.2 | 71.6 | |||||||||
| Operating expenses: | |||||||||||
| Technology and development | 17.0 | 14.5 | |||||||||
| Sales and marketing | 31.2 | 33.7 | |||||||||
| General and administrative | 19.9 | 23.0 | |||||||||
| Amortization of acquired intangibles | 0.9 | 1.2 | |||||||||
| Total operating expenses | 68.9 | 72.3 | |||||||||
| Operating income (loss) | 8.3 | (0.7) | |||||||||
| Other income (expense): | |||||||||||
| Interest income (expense), net | 1.2 | (3.1) | |||||||||
| Other expense, net | (15.0) | (8.2) | |||||||||
|
Total other income (expense)
|
(13.8) | (11.3) | |||||||||
| Loss before income tax provision | (5.5) | (12.0) | |||||||||
|
Income tax provision
|
(3.3) | 2.6 | |||||||||
| Net loss | (2.2) | % | (14.6) | % | |||||||
Revenue
Revenue increased $64.5 million, or 28.6%, to $290.1 million for the year ended December 31, 2025, compared to $225.6 million for the year ended December 31, 2024. The increase was due primarily to an increase of $76.6 million in revenue generated from PTV, driven by a 63.2% increase in active PTV Customers between the periods in comparison, partially
offset by a decrease in average spend per customer, as we continued to expand our overall SMB footprint, including small businesses. This was offset by decreases in creative and production revenues of $9.4 million and $2.3 million, respectively, primarily due to the divestiture of Maximum Effort Marketing on April 1, 2025.
Cost of Revenues
Cost of revenues increased $2.1 million, or 3.3%, to $66.2 million for the year ended December 31, 2025, compared to $64.1 million for the year ended December 31, 2024. The increase was primarily due to a $2.3 million increase in hosting fees as a result of increased processing volume driven by the development and release of new products, including bidding-related software, a $2.9 million increase in platform fees driven by the increase in revenue volume, a $2.9 million increase in data fees as a result of increased volume and changes to our data vendors, and a $1.5 million increase in amortization expense for internal use software. Offsetting these increases was a $7.8 million decrease in creative costs related to the divestiture of Maximum Effort Marketing on April 1, 2025.
Technology and Development Expense
Technology and development expense increased $16.6 million, or 50.8%, to $49.2 million for the year ended December 31, 2025, compared to $32.7 million for the year ended December 31, 2024. The increase was primarily due to a $13.8 million increase in personnel costs attributable to increased headcount to maintain and support further development of our platform. Average technology and development headcount increased by 31% between the periods in comparison as we continue to grow our engineering team to support the growth of our product. The remaining increase was primarily driven by higher SaaS costs of $1.6 million, and investment in incremental tools and consulting fees to support the development of the platform.
Sales and Marketing Expense
Sales and marketing expense increased $14.3 million, or 18.7%, to $90.4 million for the year ended December 31, 2025, compared to $76.1 million for the year ended December 31, 2024. This was primarily due to an increase in third party marketing spend of $12.4 million to drive customer and overall revenue volume, an increase in brand marketing costs of $2.3 million, and investment in SaaS tools of $2.3 million to support the growth of revenue. These increases were partially offset by lower personnel costs of $1.5 million driven by lower headcount.
General and Administrative Expense
General and administrative expense increased $5.9 million, or 11.4%, to $57.7 million for the year ended December 31, 2025, compared to $51.8 million for the year ended December 31, 2024. The increase was primarily due to an increase in legal costs of $2.9 million related to transactions and litigation work and increased merchant service fees of $2.3 million driven by increased revenue volume. Additionally, insurance expense increased $0.7 million due to public company director and officer insurance that became effective upon our initial public offering in May 2025. Accounting and consulting fees increased by $0.5 million related to transactions and personnel costs increased by $0.5 million. Offsetting these increases was a $1.0 million decrease in stock-based compensation expense, which was primarily due to the full vesting of awards granted in 2021 and partially offset by $5.5 million of one-time charges, of which $4.6 million is related to the forgiveness of 2021 partial recourse promissory notes with executive officers that were issued to facilitate the early exercise of stock options, $0.5 million was related to the acceleration of awards to option holders, and $0.4 million was related to option cancellations.
Amortization of Acquired Intangibles
Amortization of acquired intangibles remained flat at $2.6 million for both the year ended December 31, 2025 and December 31, 2024, as there were no changes to acquired intangibles year-over-year.
Interest Income (Expense), Net
Interest income (expense), net changed favorably by $10.4 million, or 150.4%, to income of $3.5 million for the year ended December 31, 2025, compared to expense of $6.9 million for the year ended December 31, 2024. The favorable change was primarily due to a $7.0 million decrease in interest expense as a result of the Convertible Note amendment in May 2024 and April 2025, which resulted in the modification and removal of the previous unamortized debt discount. Additionally, the Convertible Note was settled on May 23, 2025 in connection with the IPO, resulting in partial interest expense for the period. Contributing to the change was an increase in interest income of $3.4 million due to the increase in the interest bearing cash balance, which increased as a result of the IPO proceeds and increase in operating cash.
Other Expense, Net
Other expense, net primarily consists of fair value adjustments on our warrants, embedded derivatives, convertible debt and contingent liabilities, and a loss on extinguishment of debt. Other expense, net increased by $25.0 million to $43.5 million for the year ended December 31, 2025, compared to $18.5 million for the year ended December 31, 2024. The increase was due primarily to the $26.4 million loss on the extinguishment of the Convertible Notes when they were modified on April 1, 2025, $4.4 million in losses due to the increase in fair value of the Convertible Notes prior to extinguishment, an increase of $0.6 million in losses due to the increase in fair value adjustments of our embedded derivative liabilities, and $0.5 million in losses due to the increase in the fair value of our contingent liabilities. These losses were partially offset by a gain of $6.9 million due to the decrease in the fair value of the Series D Warrants and common stock warrants prior to their settlement and exercise, respectively.
Income Tax Provision
Income tax provision changed favorably by $15.4 million to a benefit of $9.6 million for the year ended December 31, 2025, compared to expense of $5.8 million for the year ended December 31, 2024. The favorable change was primarily driven by the release of the valuation allowance on our deferred tax assets during the year ended December 31, 2025. This was partially offset by an increase in income tax expense as a result of non-deductible stock based compensation expense and covered officer compensation.
Liquidity and Capital Resources
Overview
Since inception, we have financed operations to date primarily through cash flow from operating activities, net proceeds received from sales of equity securities and borrowings under our Revolving Credit Facility and other indebtedness. We have historically incurred losses from operations and have an accumulated deficit of $261.1 million as of December 31, 2025. As of December 31, 2025, we had cash and cash equivalents of $210.2 million, no borrowings outstanding under our Revolving Credit Facility and up to $49.4 million of borrowing capacity available thereunder.
We believe that our existing cash and cash equivalents, together with cash flow from operations and borrowings under our Revolving Credit Facility, will be sufficient to support our working capital requirements for at least the next 12 months. We utilize Insured Cash Sweep services to reduce exposure of our cash and cash equivalents balances that exceed FDIC limits at any one financial institution. Our long-term cash requirements will depend on many factors, including our revenue growth, the timing and extent of product development efforts and other investments to support our growth (including through acquisitions), the expansion of sales and marketing activities, and increases in general and administrative costs. To the extent our current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. In the event additional financing is required from outside sources, we may not be able to negotiate terms acceptable to us or at all. In particular, the recent global macroeconomic trends have caused disruption in the global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.
Revolving Credit Facility
On December 8, 2025, we entered into an Amended and Restated Business Financing Agreement (the "Revolving Credit Agreement") with Western Alliance Bank. The Revolving Credit Agreement provides for a senior secured asset-based revolving credit facility (the "Revolving Credit Facility"), pursuant to which we may initially incur up to $50.0 million aggregate principal amount of revolver borrowings and have the option to request from time to time up to an additional $30.0 million in borrowings. The Revolving Credit Facility matures on May 28, 2029. The amount of borrowing availability under the Revolving Credit Facility is based on our accounts receivable balance, reduced by reserves. As of December 31, 2025, we had no outstanding borrowings under the Revolving Credit Facility and up to $49.4 million of borrowings available, respectively.
Borrowings under the Revolving Credit Facility bear interest at a floating per annum rate equal to SOFR plus 3.00%, with a floor of 1.00%. Interest is payable on the revolving borrowings on a monthly basis.
The Revolving Credit Facility contains customary conditions to borrowings, events of default and covenants, including, without limitation, covenants that restrict our ability to sell assets, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, make distributions or redeem or repurchase capital stock or make other investments, engage in transactions with affiliates and make payments in respect of subordinated debt. The Revolving Credit Facility also requires us to maintain compliance with an Adjusted Quick Ratio (defined as unrestricted cash maintained with the lender plus eligible receivables divided by the sum of outstanding loans plus accounts payable aged over 60 days from the invoice date) covenant at least 1.35 to 1.00 if the unrestricted cash balance with the lender is less than $35.0 million and there are outstanding borrowings. Such covenant will be tested as of the last day of the most recently completed fiscal period for which financial statements have been delivered and for each fiscal period thereafter until the unrestricted cash balance is above $35.0 million and there are outstanding borrowings. We are also required to maintain $75.0 million of depository and operating accounts with Western Alliance Bank, subject to certain exceptions. Our obligations under the Revolving Credit Facility are collateralized by a pledge of substantially all of our assets, including accounts receivable, deposit accounts, intellectual property, investment property and equipment. See Note 8, "Debt" to our consolidated financial statements included elsewhere in this Form 10-K.
Cash Flows
The following table summarizes our cash flows for the periods presented:
| Years Ended December 31, | |||||||||||
|
(dollars in thousands)
|
2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 56,471 | $ | 42,548 | |||||||
| Net cash used in investing activities | (17,114) | (9,949) | |||||||||
| Net cash provided by (used in) financing activities | 88,241 | (5,005) | |||||||||
| Net increase in cash and cash equivalents | $ | 127,598 | $ | 27,594 | |||||||
Operating Activities
Net cash provided by operating activities consists of net loss adjusted for certain non-cash items and changes in operating assets and liabilities. Our cash flows from operating activities are primarily impacted by growth in our operations, increases or decreases in collections from our customers and related payments to third parties for ad inventory and data. Our collection and payment cycles can vary from period-to-period.
Net cash provided by operating activities was $56.5 million for the year ended December 31, 2025, as compared to net cash provided by operating activities of $42.5 million for the year ended December 31, 2024, an increase in cash provided of $13.9 million. This fluctuation was primarily due to a $26.5 million decrease in net loss for the year ended December 31, 2025, coupled with an increase in non-cash items of $9.3 million, partially offset by fluctuations in working capital during the year ended December 31, 2025. The net changes in working capital for both periods presented are primarily due to the timing of cash receipts from customers and payments to vendors.
Investing Activities
Net cash used in investing activities primarily consists of investments in capitalized internal use software costs to develop our technology platform and other investment activities. As our business grows, we expect our investments in our platform development to increase as needed to support our platform.
Net cash used in investing activities was $17.1 million for the year ended December 31, 2025, as compared to $9.9 million for the year ended December 31, 2024. Net cash used in investing activities for the year ended December 31, 2025 was comprised of $12.5 million of capitalized internal use software costs and $9.6 million of notes receivable issued in April 2025. In December 2025, the Company received payment on $5.0 million of the notes receivable. Net cash used in investing activities for the year ended December 31, 2024 was comprised of $9.9 million of capitalized internal use software costs.
Financing Activities
Net cash provided by financing activities consists of proceeds from the IPO, the exercise of stock options, and our Revolving Credit Facility, offset by payments of IPO costs, settlement of convertible debt, the repurchase of common stock and repayments on our Revolving Credit Facility.
Net cash provided by financing activities was $88.2 million for the year ended December 31, 2025, which was primarily comprised of $125.3 million of proceeds from the IPO and $2.7 million proceeds from the exercise of stock options, offset by $24.0 million of payments on the settlement of the Convertible Notes, $10.0 million for the repurchase of Class A common
stock for the settlement of the Convertible Notes, and $5.7 million of payments on initial public offering costs. Net cash used in financing activities was $5.0 million for the year ended December 31, 2024, which was primarily comprised of $7.5 million of payment on the Revolving Credit Facility, partially offset by $2.5 million of proceeds from the Revolving Credit Facility.
Critical Accounting Policies and Estimates
Our consolidated financial statements and the related notes thereto included elsewhere in this Form 10-K are prepared in accordance with GAAP. The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and the related disclosures. Our management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates set forth in the consolidated financial statements, and the reported amounts of revenue and expenses during the applicable reporting periods. Actual results could differ from those estimates.
We believe that the accounting policies described below require management's most difficult, subjective or complex judgments. Judgments or uncertainties affecting the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. Refer to Note 2, "Summary of Significant Accounting Policies" to the consolidated financial statements included elsewhere in this Form 10-K for additional information regarding these and our other significant accounting policies.
Revenue Recognition
We recognize revenue in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. We generate revenue by charging our customers a variable fee based on the level of ad spend and through charging fees for various ad production activities. We recognize revenue through the following steps:
•identification of the contract, or contracts, with a customer;
•identification of the performance obligations in the contract;
•determination of the transaction price;
•allocation of the transaction price to the performance obligations in the contract; and
•recognition of revenue when, or as, the performance obligations are satisfied.
The determination as to whether revenue should be reported gross of amounts billed to customers (gross basis) or net of payments to suppliers (net basis) requires significant judgment and is based on our assessment of whether we are acting as the principal or an agent in the transaction. We have determined that we do not act as the principal in the purchase and sale of digital advertising inventory because we do not control the advertising inventory and we do not set the price which is the result of an auction within the marketplace. Based on these and other factors, we report revenue from the sale of advertising inventory on our platform on a net basis. We have also determined that we do not act as the principal in our production activities because our role as a facilitator does not give us complete control over the specified goods, are not primarily responsible for the performance of third-party services, cannot redirect those services to fulfill other contracts, do not carry inventory risk, and do not set the price of third-party services used in the production activities. Therefore, we also report revenue from our production activities on a net basis.
We bill our customers on a gross basis, inclusive of the cost of procuring the advertising inventory. We report revenue on a net basis which represents gross billings net of amounts we pay suppliers for the cost of advertising inventory. Our accounts receivable are recorded at the amount of gross billings to customers, net of allowance, for the amounts we are responsible to collect, and our accounts payable are recorded at the amounts payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.
Valuation of Goodwill and Intangibles
The valuation of assets acquired in a business combination and asset impairment reviews require the use of significant estimates and assumptions. The acquisition method of accounting for business combinations requires us to estimate the fair value of assets acquired, liabilities assumed, and any non-controlling interest in an acquired business to properly allocate purchase price consideration between assets that are depreciated or amortized and goodwill.
Long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The valuation is performed at the lowest level of identifiable cash flows independent of other assets. An impairment loss would be recognized when estimated undiscounted future cash flows generated from the assets are less than their carrying amount. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value.
Goodwill recorded represents excess consideration transferred over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is subject to evaluation of impairment in accordance with ASC 350, Intangibles-Goodwill and Otheron an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If no such events or changes in circumstances occur, we perform our annual assessment in the fourth quarter of the year.
In accordance with the applicable guidance, a two-step process is utilized to assess whether or not goodwill may be impaired. The first step is a qualitative assessment that analyzes current economic indicators and other qualitative factors. If the first step indicates that it is more likely than not that the fair value is less than its carrying amount, a quantitative analysis must be performed. The quantitative analysis, if determined to be necessary, compares the estimated fair value of the reporting unit to the carrying value. If this step indicates that the carrying value of the reporting unit is in excess of its fair value, an impairment loss shall be recognized in an amount equal to that excess.
We operate as one segment and have identified a single reporting unit, entirely within the United States. Our chief operating decision maker reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.
Our annual impairment analysis of goodwill was performed as of December 31, 2025. Our qualitative assessment did not result in an identification of indicators of impairment and, based on that assessment, we concluded that the fair value of the reporting unit was substantially in excess of the carrying value. Therefore, a quantitative analysis was not deemed necessary, and no impairment of goodwill was recorded.
Embedded Derivative Liabilities
We evaluated the terms and features of our Convertible Notes, as defined in Note 9, "Convertible Debt and Warrant Liabilities," to our consolidated financial statements included elsewhere in this Form 10-K, and identified certain embedded features that required bifurcation as these features were not clearly and closely related to the underlying host contract.
On April 1, 2025, the Company and the holders of the Convertible Notes executed an Omnibus Amendment and Note Conversion Agreement (the "Note Conversion Amendment"). The terms of the Note Conversion Amendment were determined to be substantially different than the terms of the Convertible Notes prior to the Note Conversion Amendment, and as such, in accordance with ASC 470, Debtthe modification was accounted for as a debt extinguishment, with the difference between the fair value of the modified Convertible Notes and the net carrying amount of the extinguished Convertible Notes, including the fair value of the embedded derivative liability on date of extinguishment, recognized as a loss on extinguishment within other expense, net on the consolidated statements of operations. The embedded features were then settled or extinguished with the conversion of our Convertible Notes in connection with the closing of the Company's IPO on May 23, 2025.
Accordingly, these embedded features were accounted for separately as an embedded derivative liability in accordance with ASC 815, Derivatives and Hedging. We recorded the fair value of the embedded derivative as of the issuance date as a reduction of the initial carrying amount of the Convertible Note instrument through the debt discount. The embedded derivative liability was adjusted to fair value each reporting period with changes in fair value subsequent to the issuance date recognized within other (expense) income, net in the consolidated statements of operations.
The fair value of the embedded derivative liability was determined using the with-and-without model which compared the estimated fair value of the underlying instrument with the embedded features to the estimated fair value of the underlying instrument without the embedded features, with the difference representing the estimated fair value of the embedded derivative features. The with-and-without model includes significant unobservable estimates, including the timing and probability weighting of potential liquidity events, discount rate, illiquidity discount, and expected volatility. Other assumptions used in the model that are not significant unobservable estimates are interest rate and risk-free rate. Changes in the inputs into the valuation model may have a significant impact on the estimated fair value of the embedded derivative liability.
Stock-Based Compensation
We recognize compensation expense related to employee stock option grants in accordance with ASC 718, Compensation-Stock Compensation. Awards are measured and recognized in the consolidated financial statements based on the fair value of the awards granted.
The fair values of stock option awards are estimated on the grant date using the Black-Scholes option-pricing model, except for the performance options that are estimated using a Monte Carlo simulation model. Both the Black-Scholes option-pricing model and Monte Carlo simulation model require us to make certain assumptions including the fair value of the underlying common stock, the expected term, the expected volatility, the risk-free interest rate, the dividend yield, and the derived service period. The assumptions used represent management's best estimates, which involve inherent uncertainties. The assumptions and estimates are summarized as follows:
Fair Value of the Underlying Common Stock - Prior to the IPO, we estimated the fair value of our stock with the assistance of a third-party valuation specialist, who derived the value using a combination of market and income approach valuation models. Subsequent to the IPO, the fair value of common stock is based on the closing price of the Company's Class A common stock on grant date.
Risk-Free Interest Rate - The risk-free interest rate used is based on the implied yield in effect at the time of grant of U.S. Treasury securities with maturities similar to the expected term of the options.
Expected Term - We calculate the expected term of our employee options based upon the simplified method, which estimates the expected term as the average of the contractual life of the option and its vesting period.
Volatility - The expected volatility is based on the historical volatility of comparable companies from a representative peer group selected based on industry, financial, and market-capitalization data as we do not have sufficient trading history for our Class A common stock.
Dividend Yield - The dividend yield is zero as we have not declared or paid any dividends to date and do not currently expect to do so in the future.
Derived Service Period - For the performance options, the derived service period is the time from the service inception date to the expected date of satisfaction of the market condition. We estimate the derived service period with the assistance of a third-party valuation specialist, utilizing a Monte Carlo simulation representing the median of all paths to vest by tranche.
Stock-based compensation expense related to stock option awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. Stock-based compensation for the performance options is recognized on a graded-vesting basis over a derived service period but may be accelerated if the vesting criteria are fulfilled prior to the estimated performance period. Stock-based compensation expense is recorded net of actual forfeitures. Modifications to stock option awards are remeasured to fair value using the Black-Scholes model at the date of modification, with the incremental increase in fair value being recognized in expense. See Note 13, "Stock-Based Compensation" to our consolidated financial statements included in this Form 10-K for further discussion of our stock-based compensation awards.
Recent Accounting Pronouncements
For information regarding recent accounting pronouncements, refer to Note 2 "Summary of Significant Accounting Policies" to our consolidated financial statements included in this Form 10-K.
Jumpstart Our Business Startups Act of 2012
Under the JOBS Act, an "emerging growth company" can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period until the earlier of the date we (x) are no longer an emerging growth company, or (y) affirmatively and irrevocably opt-out of the extended transition period. As a result, our operating results and consolidated financial statements may not be comparable to the operating results and financial statements of companies that have adopted the new or revised accounting standards.
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