comScore Inc.

08/14/2026 | Press release | Distributed by Public on 08/14/2026 15:34

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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 should be read in conjunction with our Condensed Consolidated Financial Statements and the related Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, or 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events in future periods may differ materially from those anticipated or implied in these forward-looking statements as a result of many factors, including those discussed under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 10-K"), under Item 1A, "Risk Factors" in this 10-Q and elsewhere in this 10-Q. See also "Cautionary Note Regarding Forward-Looking Statements" at the beginning of this 10-Q.
Overview
We are a global information and analytics company that measures advertising, content, and the consumer audiences of each, across media platforms. We create our products using a global data platform that combines information on digital platforms (connected televisions, mobile devices, tablets and computers), televisions and direct to consumer applications with demographics and other descriptive information. We have developed proprietary data science that enables measurement of person-level and household-level audiences, removing duplicated viewing across devices and over time. This combination of data and methods enables a common standard for buyers and sellers to transact on advertising. This helps companies across the media ecosystem better understand and monetize their audiences and develop marketing plans and products to more efficiently and effectively reach those audiences. Our ability to unify behavioral and other descriptive data enables us to provide audience ratings, advertising verification and granular consumer segments that describe hundreds of millions of consumers. Our customers include digital publishers, television networks, content owners, brand advertisers, agencies and technology providers.
The platforms we measure include televisions, mobile devices, computers, tablets and CTV devices. The information we analyze crosses geographies, types of content and activities, including websites, mobile and over-the-top applications, video games, television programming, e-commerce and advertising.
Divestiture of Movies Business
On May 27, 2026, we entered into and closed an Equity Purchase Agreement with an affiliate of Advaya Capital, Flix Buyer Inc. (the "Purchaser"), pursuant to which we sold our box office measurement, reporting and analytics business and our Hollywood Software business (collectively, the "Movies Business") to the Purchaser for an aggregate base purchase price of $70.0 million in cash, subject to customary adjustments and other terms as set forth in the Equity Purchase Agreement (the "Movies Transaction").
Management Changes
Effective May 28, 2026, our Board of Directors appointed Matthew McLaughlin as our Chief Executive Officer. In connection with Mr. McLaughlin's appointment, our former Chief Executive Officer Jon Carpenter transitioned to a senior advisor position and resigned from the Board of Directors. Effective June 9, 2026, Greg Dale, our then Chief Operating Officer, departed the Company.
Results of Operations
The following table sets forth selected Condensed Consolidated Statements of Operations and Comprehensive Loss data as a percentage of revenues for each of the periods indicated. Percentages may not add due to rounding.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(In thousands) Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue
Revenues $ 79,246 100.0 % $ 89,389 100.0 % $ 164,568 100.0 % $ 175,098 100.0 %
Cost of revenues 50,982 64.3 % 53,099 59.4 % 103,970 63.2 % 104,846 59.9 %
Selling and marketing 14,778 18.7 % 16,663 18.6 % 30,434 18.5 % 31,466 18.0 %
Research and development 7,154 9.0 % 7,804 8.7 % 14,940 9.1 % 15,922 9.1 %
General and administrative 14,998 18.9 % 12,872 14.4 % 27,778 16.9 % 25,347 14.5 %
Amortization of intangible assets 632 0.8 % 632 0.7 % 1,264 0.8 % 1,264 0.7 %
Loss on divestiture of business, net 2,682 3.4 % - - % 2,682 1.6 % - - %
Total expenses from operations 91,226 115.1 % 91,070 101.8 % 181,068 110.0 % 178,845 102.1 %
Loss from operations (11,980) (15.1) % (1,681) (1.9) % (16,500) (10.0) % (3,747) (2.1) %
Gain (loss) from foreign currency transactions 520 0.7 % (3,803) (4.3) % 1,760 1.1 % (5,546) (3.2) %
Other income, net 417 0.5 % - - % 417 0.3 % - - %
Interest expense, net (1,021) (1.3) % (1,553) (1.7) % (2,771) (1.7) % (3,311) (1.9) %
Loss on extinguishment of debt (3,608) (4.6) % - - % (3,970) (2.4) % - - %
Loss before income taxes (15,672) (19.8) % (7,037) (7.9) % (21,064) (12.8) % (12,604) (7.2) %
Income tax benefit (provision) 887 1.1 % (2,455) (2.7) % 31 - % (881) (0.5) %
Net loss $ (14,785) (18.7) % $ (9,492) (10.6) % $ (21,033) (12.8) % $ (13,485) (7.7) %
Revenues
Our products and services are organized around two solution groups:
•Content & Ad Measurement represents the measurement portion of our business - measuring audiences across content and advertisements for linear TV, CTV, desktops, laptops, tablets and mobile devices. Product offerings reported in this solution group include our legacy subscription-based syndicated offerings that measure audiences for linear TV (national and local), digital and streaming, as well as theatrical box office receipts prior to the Movies Transaction. Also included in this solution group are our transaction-based cross-platform products - Proximic by Comscore ("Proximic"), our Activation solution suite, and Cross-Platform Campaign Results ("CCR"), along with our subscription-based cross-platform product, Comscore Content Measurement ("CCM"). These syndicated and cross-platform products are used as currency to plan and execute ad campaigns, measure the outcome of ad campaigns, optimize ad campaigns that are in-flight, activate programmatic campaigns, and make content easier for programmatic advertisers to reach.
•Research & Insight Solutions represents the custom solutions we provide that are tailored to our clients' specific needs. These offerings include custom TV, digital and cross-platform data feeds, as well as other data integrations. They also include our survey business, our Consumer Brand Health business, and other bespoke research, data and insight deliverables that help our clients better understand their business, competitive landscape, clients and market.
We categorize our revenue along these two solution groups; however, our cost structure is tracked at the corporate level and not by our solution groups. These shared costs include employee costs, purchased data, operational overhead, data storage and technology that support both solution groups.
Revenues for the three months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Variance % Variance
Content & Ad Measurement
Syndicated Audience $ 55,249 69.7 % $ 63,953 71.5 % $ (8,704) (13.6) %
Cross-Platform 12,528 15.8 % 12,800 14.3 % (272) (2.1) %
Total Content & Ad Measurement 67,777 85.5 % 76,753 85.9 % (8,976) (11.7) %
Research & Insight Solutions 11,469 14.5 % 12,636 14.1 % (1,167) (9.2) %
Total revenues $ 79,246 100.0 % $ 89,389 100.0 % $ (10,143) (11.3) %
Content & Ad Measurement revenue decreased primarily due to a decline in revenue from our Syndicated Audience offerings, driven by the divestiture of the Movies Business, as described in Footnote 3, Divestiture of Movies Business, and lower renewals and lost business in our TV and syndicated digital products. Cross-Platform revenue also declined, primarily driven by lower usage in Proximic, partially offset by growth from new business in CCM.
Research & Insight Solutions revenue decreased primarily due to lower renewals and lower deliveries of certain custom digital products.
Revenues for the six months ended June 30, 2026 and 2025 were as follows:
Six Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Variance % Variance
Content & Ad Measurement
Syndicated Audience $ 115,760 70.3 % $ 127,457 72.8 % $ (11,697) (9.2) %
Cross-Platform 25,130 15.3 % 22,462 12.8 % 2,668 11.9 %
Total Content & Ad Measurement 140,890 85.6 % 149,919 85.6 % (9,029) (6.0) %
Research & Insight Solutions 23,678 14.4 % 25,179 14.4 % (1,501) (6.0) %
Total revenues $ 164,568 100.0 % $ 175,098 100.0 % $ (10,530) (6.0) %
Content & Ad Measurement revenue decreased due to a decline in revenue from our Syndicated Audience offerings, primarily related to lower renewals and lost business in our TV and syndicated digital products, along with the divestiture of the Movies Business, as described in Footnote 3, Divestiture of Movies Business. This decrease was offset by growth in our Cross-Platform revenue, primarily driven by increased usage of our Proximic and CCR products and continued adoption of our CCM offering.
Research & Insight Solutions revenue decreased primarily due to lower renewals and lower deliveries of certain custom digital products.
Cost of Revenues
Cost of revenues consists primarily of expenses related to producing our products, operating our network infrastructure, and the recruitment, maintenance and support of our consumer panels. These expenses include employee costs for salaries, benefits, stock-based compensation and other related personnel costs of network operations, survey operations, custom analytics and technical support, all of which are expensed as they are incurred. Cost of revenues also includes costs to obtain MVPD data sets and panel, census-based and other data sets used in our products as well as operational costs associated with our data centers, including depreciation expense associated with computer equipment and internally developed software that supports our panels and systems. Additionally, cost of revenues includes allocated overhead, lease expense and other facilities-related costs, and depreciation expense generated by general purpose equipment and software.
Cost of revenues for the three months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30,
(In thousands) 2026 % of Revenue 2025
% of Revenue
$ Change % Change
Data costs $ 16,358 20.6 % $ 16,886 19.0 % $ (528) (3.1) %
Employee costs 9,956 12.6 % 11,276 12.6 % (1,320) (11.7) %
Systems and bandwidth costs 7,394 9.3 % 7,619 8.5 % (225) (3.0) %
Lease expense and depreciation 6,763 8.5 % 7,093 7.9 % (330) (4.7) %
Panel costs 3,676 4.6 % 3,600 4.0 % 76 2.1 %
Royalties and resellers 2,424 3.1 % 1,905 2.1 % 519 27.2 %
Sample and survey costs 1,647 2.1 % 1,529 1.7 % 118 7.7 %
Technology 1,312 1.7 % 1,183 1.3 % 129 10.9 %
Professional fees 1,110 1.4 % 1,690 1.9 % (580) (34.3) %
Other 342 0.4 % 318 0.4 % 24 7.5 %
Total cost of revenues $ 50,982 64.3 % $ 53,099 59.4 % $ (2,117) (4.0) %
Employee costs decreased primarily due to the divestiture of the Movies Business and a decrease in stock compensation expense. Professional fees decreased primarily due to lower consulting fees. Data costs decreased primarily due to declines in our MVPD costs related to declining household counts.
Cost of revenues for the six months ended June 30, 2026 and 2025 were as follows:
Six Months Ended June 30,
(In thousands) 2026 % of Revenue 2025
% of Revenue
$ Change % Change
Data costs $ 33,045 20.2 % $ 34,141 19.4 % $ (1,096) (3.2) %
Employee costs 21,339 13.0 % 21,932 12.5 % (593) (2.7) %
Systems and bandwidth costs 15,032 9.1 % 14,471 8.3 % 561 3.9 %
Lease expense and depreciation 13,831 8.4 % 14,150 8.1 % (319) (2.3) %
Panel costs 7,123 4.3 % 7,099 4.1 % 24 0.3 %
Royalties and resellers 4,981 3.0 % 3,956 2.3 % 1,025 25.9 %
Sample and survey costs 3,076 1.9 % 3,071 1.8 % 5 0.2 %
Technology 2,541 1.5 % 2,359 1.3 % 182 7.7 %
Professional fees 2,338 1.4 % 3,099 1.8 % (761) (24.6) %
Other 664 0.4 % 568 0.3 % 96 16.9 %
Total cost of revenues $ 103,970 63.2 % $ 104,846 59.9 % $ (876) (0.8) %
Data costs decreased primarily due to declines in our MVPD costs related to declining household counts. Professional fees decreased primarily due to a decrease in consulting fees. The decreases were partially offset by an increase in royalties and resellers primarily due to increased sales of products for which we pay royalties.
Selling and Marketing
Selling and marketing expenses consist primarily of employee costs, including salaries, benefits, commissions, stock-based compensation and other related costs for personnel associated with sales and marketing activities, as well as costs related to online and offline advertising, industry conferences, promotional materials, public relations, other sales and marketing programs and allocated overhead, lease expense and other facilities-related costs, and depreciation expense generated by general purpose equipment and software.
Selling and marketing expenses for the three months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Change % Change
Employee costs $ 11,356 14.3 % $ 12,838 14.3 % $ (1,482) (11.5) %
Professional fees 861 1.1 % 701 0.8 % 160 22.8 %
Technology 830 1.0 % 813 0.9 % 17 2.1 %
Marketing and advertising 791 1.0 % 1,242 1.4 % (451) (36.3) %
Lease expense and depreciation 365 0.5 % 521 0.6 % (156) (29.9) %
Other 575 0.7 % 548 0.6 % 27 4.9 %
Total selling and marketing expenses $ 14,778 18.6 % $ 16,663 18.6 % $ (1,885) (11.3) %
Employee costs decreased primarily due to the divestiture of the Movies Business.
Selling and marketing expenses for the six months ended June 30, 2026 and 2025 were as follows:
Six Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Change % Change
Employee costs $ 23,911 14.5 % $ 24,465 14.0 % $ (554) (2.3) %
Professional fees 1,787 1.1 % 1,380 0.8 % 407 29.5 %
Technology 1,777 1.1 % 1,624 0.9 % 153 9.4 %
Marketing and advertising 1,157 0.7 % 1,886 1.1 % (729) (38.7) %
Lease expense and depreciation 854 0.5 % 1,078 0.6 % (224) (20.8) %
Other 948 0.6 % 1,033 0.6 % (85) (8.2) %
Total selling and marketing expenses $ 30,434 18.5 % $ 31,466 18.0 % $ (1,032) (3.3) %
Marketing and advertising costs decreased primarily due to fewer marketing events during the six months ended June 30, 2026. Employee costs decreased primarily due to the divestiture of the Movies Business.
Research and Development
Research and development expenses include product development costs, consisting primarily of employee costs including salaries, benefits, stock-based compensation and other related costs for personnel associated with research and development activities, third-party expenses to develop new products, third-party data costs, allocated overhead, lease expense and other facilities-related costs, and depreciation expense related to general purpose equipment and software.
Research and development expenses for the three months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Change % Change
Employee costs $ 5,473 6.8 % $ 5,966 6.6 % $ (493) (8.3) %
Technology 801 1.0 % 722 0.8 % 79 10.9 %
Professional fees 520 0.7 % 602 0.7 % (82) (13.6) %
Lease expense and depreciation 221 0.3 % 376 0.4 % (155) (41.2) %
Other 139 0.2 % 138 0.2 % 1 0.7 %
Total research and development expenses $ 7,154 9.0 % $ 7,804 8.7 % $ (650) (8.3) %
Research and development expenses for the six months ended June 30, 2026 and 2025 were as follows:
Six Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Change % Change
Employee costs $ 11,489 7.0 % $ 12,262 7.0 % $ (773) (6.3) %
Technology 1,551 0.9 % 1,508 0.9 % 43 2.9 %
Professional fees 1,096 0.7 % 1,085 0.6 % 11 1.0 %
Lease expense and depreciation 526 0.3 % 826 0.5 % (300) (36.3) %
Other 278 0.2 % 241 0.1 % 37 15.4 %
Total research and development expenses $ 14,940 9.1 % $ 15,922 9.1 % $ (982) (6.2) %
General and Administrative
General and administrative expenses consist primarily of employee costs including salaries, benefits, stock-based compensation and other related costs, and related expenses for executive management, finance, human capital, legal and other administrative functions, as well as professional fees, overhead, including allocated overhead, lease expense and other facilities-related costs, depreciation expense related to general purpose equipment and software, amortization of cloud-computing implementation costs, Board of Directors compensation and expenses incurred for other general corporate purposes.
General and administrative expenses for the three months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Change % Change
Employee costs $ 7,473 9.4 % $ 7,594 8.5 % $ (121) (1.6) %
Professional fees 4,922 6.2 % 2,994 3.3 % 1,928 64.4 %
Technology 963 1.2 % 865 1.0 % 98 11.3 %
Lease expense and depreciation 172 0.2 % 263 0.3 % (91) (34.6) %
Other 1,468 1.9 % 1,156 1.3 % 312 27.0 %
Total general and administrative expenses $ 14,998 18.9 % $ 12,872 14.4 % $ 2,126 16.5 %
Professional fees increased primarily due to legal and advisory fees related to the divestiture of the Movies Business.
General and administrative expenses for the six months ended June 30, 2026 and 2025 were as follows:
Six Months Ended June 30,
(In thousands) 2026 % of Revenue 2025 % of Revenue $ Change % Change
Employee costs $ 13,946 8.6 % $ 14,876 8.5 % $ (930) (6.3) %
Professional fees 8,584 5.2 % 6,079 3.5 % 2,505 41.2 %
Technology 1,858 1.1 % 1,705 1.0 % 153 9.0 %
Lease expense and depreciation 394 0.2 % 545 0.3 % (151) (27.7) %
Other 2,996 1.8 % 2,142 1.2 % 854 39.9 %
Total general and administrative expenses $ 27,778 16.9 % $ 25,347 14.5 % $ 2,431 9.6 %
Professional fees increased primarily due to legal and advisory fees related to the divestiture of the Movies Business.
Amortization of Intangible Assets
Amortization expense consists of charges related to the amortization of intangible assets associated with acquisitions, primarily our 2021 acquisition of Shareablee. Amortization of intangible assets was $0.6 million during the three months ended June 30, 2026 and 2025 and $1.3 million during the six months ended June 30, 2026 and 2025.
Loss on Divestiture of Business, Net
During the three and six months ended June 30, 2026, we recognized a $2.7 million loss on divestiture of business, net in connection with the divestiture of the Movies Business. For additional information, refer to Footnote 3, Divestiture of Movies Business.
Gain (Loss) From Foreign Currency Transactions
Our foreign currency transactions are recorded as a result of fluctuations in the exchange rate between the transactional currency and the functional currency of foreign subsidiary transactions, primarily resulting in non-cash unrealized gains and losses. Our foreign currency exposures that relate to the translation to U.S. Dollars are in a net liability position, and our foreign currency exposures that relate to the translation from U.S. Dollars are in a net asset position.
For the three and six months ended June 30, 2026, the gain from foreign currency transactions was $0.5 million and $1.8 million, respectively. The gains were primarily driven by fluctuations in the Euro, Chilean Peso, Mexican Peso and U.S. Dollar exchange rates. For the three and six months ended June 30, 2025, the loss from foreign currency transactions was $3.8 million and $5.5 million, respectively. The losses were primarily driven by fluctuations in the Euro, Chilean Peso and U.S. Dollar exchange rates.
Other Income, Net
Other income, net represents income and expenses incurred that are generally not recurring in nature or are not part of our regular operations. Other income, net was $0.4 million during the three and six months ended June 30, 2026, and zero during the three and six months ended June 30, 2025. The increase in other income, net for the three and six months ended June 30, 2026 as compared to 2025 was primarily driven by income from the transition services agreements, as described in Footnote 3, Divestiture of Movies Business.
Interest Expense, Net
Interest expense, net consists of interest income and interest expense. Interest income primarily consists of interest earned from our cash and cash equivalent balances. Interest expense primarily relates to interest and amortization of debt issuance costs under our Credit Agreement (as defined below) and our finance leases.
We incurred interest expense, net of $1.0 million and $1.6 million during the three months ended June 30, 2026 and 2025, respectively, and $2.8 million and $3.3 million during the six months ended June 30, 2026 and 2025, respectively. The decrease in interest expense, net for the three and six months ended June 30, 2026 as compared to 2025 was primarily due to the prepayment of $5.0 million of Term Loan (as defined below) principal in the first quarter and the full repayment of the remaining obligations under the Credit Agreement in the second quarter of 2026. For additional information, refer to Footnote 7, Debt.
Loss on Extinguishment of Debt
During the three and six months ended June 30, 2026, we recognized a $3.6 million and $4.0 million loss on extinguishment of debt, respectively. The loss on extinguishment of debt is related to the prepayment of $5.0 million of Term Loan principal in the first quarter of 2026 and the full repayment of the remaining outstanding obligations under the Credit Agreement in the second quarter of 2026. For additional information, refer to Footnote 7, Debt.
Income Tax Benefit (Provision)
A valuation allowance has been established against our net U.S. federal and state deferred tax assets and certain foreign deferred tax assets, including net operating loss carryforwards. As a result, our income tax position is primarily related to foreign tax activity and U.S. deferred taxes for tax deductible goodwill and other indefinite-lived liabilities.
For the three months ended June 30, 2026 and 2025, we recorded an income tax benefit of $0.9 million and an income tax provision of $2.5 million, respectively, resulting in effective tax rates of 5.7% and 34.9%, respectively. For the six months ended June 30, 2026 and 2025, we recorded an income tax benefit of $31.0 thousand and an income tax provision of $0.9 million, respectively, resulting in effective tax rates of 0.1% and 7.0%, respectively. These effective tax rates differ from the U.S. federal statutory rate primarily due to the effects of certain permanent items, foreign tax rate differences, changes in the valuation allowance against our domestic deferred tax assets and deferred tax expense resulting from amortization of tax-deductible goodwill. The income tax benefit for the three and six months ended June 30, 2026 also includes a discrete deferred tax benefit of $2.0 million related to the reduction of goodwill as a result of the divestiture of the Movies Business, along with discrete tax expense of $0.6 million related to foreign tax withholding on dividend distributions that were made in connection with the divestiture.
Liquidity and Capital Resources
The following table summarizes our cash flows for each of the periods identified:
Six Months Ended June 30,
(In thousands) 2026 2025
Net cash provided by operating activities $ 8,041 $ 9,994
Net cash provided by (used in) investing activities 43,458 (11,392)
Net cash used in financing activities (49,540) (4,576)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (12) 2,032
Net increase (decrease) in cash, cash equivalents and restricted cash 1,947 (3,942)
Overview
Our principal uses of cash consist of cash paid for data, payroll and other operating expenses; payments related to investments in equipment, primarily to support our consumer panels and technical infrastructure required to deliver our products and services and support our customers; service of our debt and lease facilities; and costs related to our recently announced realignment plan (described below).
As of June 30, 2026, our principal sources of liquidity consisted of cash, cash equivalents and restricted cash totaling $28.7 million, including $3.0 million in restricted cash (primarily related to letters of credit) and cash flows from our operations. We had outstanding letters of credit of $2.7 million as of June 30, 2026.
On May 27, 2026, we entered into an Equity Purchase Agreement with the Purchaser, pursuant to which we sold our Movies Business to the Purchaser for an aggregate base purchase price of $70.0 million in cash, subject to customary adjustments and other terms as set forth in the Equity Purchase Agreement. For further information, refer to Footnote 3, Divestiture of Movies Business.
We used a portion of the proceeds from the Movies Transaction to repay in full all outstanding obligations under our financing agreement with Blue Torch Finance LLC. See "Secured Credit Agreement" below. For additional information, refer to Footnote 7, Debt.
On August 11, 2026, we communicated a workforce reduction as part of a broader plan to realign our business, optimize our operations, and invest in long-term growth opportunities. In connection with this realignment plan, we will incur certain exit-related costs, which are currently
estimated to range between $7 million and $9 million. We expect implementation of the plan, including cash payments, to be substantially complete in the third quarter of 2027. For additional information, refer to Footnote 13, Subsequent Events.
Macroeconomic Factors
In recent years, macroeconomic challenges such as inflation, capital market disruptions and recession concerns have caused some advertisers to reduce or delay advertising expenditures. Recent geopolitical conflicts and developments in U.S. trade policy have created additional uncertainty, contributing to further spending delays by advertisers. These delays and declines have had a direct impact on demand for our products, particularly those that are tied to advertising spend. We expect that softness in the advertising market will continue to affect our business in 2026. Although we cannot quantify the impact of macroeconomic factors on our future results, any worsening of ad market conditions could negatively impact our financial position and liquidity.
Preferred Stock
On March 10, 2021, we issued 82,527,609 shares of Series B Preferred Stock in exchange for gross cash proceeds of $204.0 million. Net proceeds from the issuance totaled $187.9 million after deducting issuance costs. Shares of Series B Preferred Stock were convertible into Common Stock as described in Footnote 6, Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit).
The holders of Series B Preferred Stock were entitled to participate in all dividends declared on the Common Stock on an as-converted basis and were also entitled to a cumulative dividend at the rate of 7.5% per annum, payable annually in arrears and subject to increase under certain specified circumstances (including in connection with the dividend waivers described below). In addition, such holders were entitled to request, and we would have had to take all actions reasonably necessary to pay, a one-time special dividend on the Series B Preferred Stock equal to the highest dividend that our Board of Directors determined could be paid at the applicable time (or a lesser amount agreed by the holders).
At an annual meeting held on June 15, 2023, our stockholders approved proposals permitting the payment of annual dividends on the Series B Preferred Stock in the form of cash, shares of Common Stock, additional shares of Series B Preferred Stock, or a combination thereof, subject to conditions set forth in the Certificate of Designations governing the Series B Preferred Stock. On the same date, each holder of Series B Preferred Stock waived its right to receive on June 30, 2023 the annual dividends otherwise payable by us on that date. Upon receipt of the waivers, our Board elected to defer the June 2023 payment. Under the waivers and the Certificate of Designations of Series B Preferred Stock, the deferred dividends would accrue and accumulate at a rate of 9.5% per year from June 30, 2023 until declared and paid, with payment to occur on or before December 31, 2023.
On December 26, 2023, each holder of our Series B Preferred Stock waived its right to receive the deferred dividends on or before December 31, 2023. Under these waivers and the Certificate of Designations of Series B Preferred Stock, the deferred dividends would continue to accrue at a rate of 9.5% per year until declared and paid, with payment to occur on or before June 30, 2024.
On June 27, 2024, each holder of Series B Preferred Stock further waived its right to receive the deferred dividends on or before June 30, 2024. In addition, each holder waived its right to receive on June 30, 2024 the annual dividends otherwise payable on that date for the dividend period ending June 29, 2024. Under these waivers and the Certificate of Designations of Series B Preferred Stock, the deferred dividends for both periods (2023 and 2024) would continue to accrue and accumulate at a rate of 9.5% per year until declared and paid, with payment to occur on or before July 31, 2024.
On July 24, 2024, we issued 13,257,294 additional shares of Series B Preferred Stock to the Investors in exchange for cancellation of our obligation to pay the deferred dividends described above, which totaled $32.8 million on the issuance date. On the date of issuance, the additional shares of Series B Preferred Stock were convertible into 662,862 shares of our Common Stock, representing an effective conversion price of $49.438 per share for the canceled dividend obligation. The additional shares of Series B Preferred Stock had the same terms and conditions as the Series B Preferred Stock previously issued, including that holders were entitled to cumulative dividends at a rate of 7.5% per annum, payable annually in arrears and subject to increase under certain circumstances.
In connection with the issuance, we also entered into an amendment to the prior stockholders agreement with the holders of Series B Preferred Stock. Among other things, the amendment reduced the $100.0 million special dividend threshold set forth in the prior stockholders agreement by an amount equal to the liquidation preference of the additional Series B Preferred Stock ($32.8 million). After further reducing the threshold by annual dividends paid in prior years, the special dividend threshold was $47.0 million.
On June 24, 2025, each holder of our Series B Preferred Stock waived its right to receive on June 30, 2025 the annual dividends otherwise payable by us on that date. Under the waivers and the Certificate of Designations of Series B Preferred Stock, the deferred dividends accrued and accumulated at a rate of 9.5% per year from June 30, 2025 until they were extinguished as part of the Recapitalization (as defined below).
On December 29, 2025, Charter, Liberty, and Pine (together the "Investors") each exchanged 31,928,301 shares of Series B Preferred Stock for (i) 4,223,621 shares of Series C Preferred Stock and (ii) 3,286,825 shares of Common Stock (the "Recapitalization"). Holders of Series C Preferred Stock are entitled to convert the Series C Preferred Stock into shares of Common Stock and to vote as a single class with the holders of Common Stock as set forth in the Certificate of Designations of Series C Preferred Stock. Additionally, as part of the Recapitalization, we agreed to a fixed cash payment of $2.0 million to each of the Investors on June 30, 2028, regardless of whether the Investors continue to own any of our securities on the payment date. The Recapitalization resulted in the retirement of all shares of Series B Preferred Stock and the elimination of related annual and special dividend rights. For further information, refer to Footnote 6, Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit).
As of June 30, 2026, no shares of Series C Preferred Stock had been converted into Common Stock.
Secured Credit Agreement
On December 31, 2024, we entered into a senior secured financing agreement (the "Credit Agreement") with Blue Torch Finance LLC. The Credit Agreement had a term of four years and was scheduled to mature in December 2028. The Credit Agreement provided a borrowing capacity of $60.0 million consisting of a $45.0 million term loan (the "Term Loan") and a $15.0 million revolving credit facility (the "Revolving Facility").
Amounts outstanding under the Credit Agreement were required to be prepaid from time to time with the net cash proceeds of certain debt incurrences, equity issuances, asset sales and other dispositions, insurance and condemnation proceeds, tax refunds and other extraordinary receipts. Additionally, we were required to prepay the loans annually with Excess Cash Flow (as defined in the Credit Agreement) at specified percentages, or we could voluntarily prepay a portion of the loans in order to maintain compliance with our financial covenants, as we did in the first quarter of 2026. Certain payments were subject to prepayment premiums.
The Credit Agreement contained financial covenants that required us to maintain a maximum Senior Leverage Ratio and minimum Liquidity (each term as defined in the Credit Agreement) during the term of the facility. Additionally, the Credit Agreement contained restrictive covenants that limited our ability to, among other things, incur additional indebtedness and liens, make investments and loans, enter into mergers and acquisitions, make or declare dividends and other payments, enter into certain contracts, sell assets and engage in transactions with affiliates. On March 30, 2026, we and Blue Torch Finance LLC executed a limited consent to the Credit Agreement, which waived testing of the Senior Leverage Ratio for the test period ending March 31, 2026, subject to certain conditions, including that our Senior Leverage Ratio for that test period did not exceed 3.25:1.00.
On March 30, 2026, we voluntarily prepaid $5.0 million of principal outstanding under our Term Loan. The prepayment was funded using cash on hand and was applied to the final maturity payment of the Term Loan. In connection with the prepayment, we recognized a $0.4 million loss on extinguishment of debt during the six months ended June 30, 2026. The loss represented the pro rata portion of the unamortized debt discount and debt issuance costs, along with the prepayment premium.
On May 27, 2026, we used a portion of the proceeds from the Movies Transaction to repay in full all outstanding obligations under the Credit Agreement. The repayment totaled $40.1 million, which included $39.0 million of outstanding principal, $0.7 million of accrued interest and $0.4 million of prepayment premium. The repayment resulted in the termination of the Credit Agreement and all related loan documents, including the lenders' commitments thereunder and all related guarantees, liens and security interests. In connection with the repayment, we recognized a $3.6 million loss on extinguishment of debt during the three and six months ended June 30, 2026.
For additional information on the Credit Agreement, refer to Footnote 7, Debt.
Operating Activities
Our primary source of cash provided by operating activities is revenues generated from sales of our products and services. Our primary uses of cash from operating activities include personnel costs and costs related to data and infrastructure used to develop and maintain our products and services.
Cash provided by operating activities is calculated by adjusting our net loss for changes in operating assets and liabilities, as well as by excluding non-cash items such as: depreciation, non-cash operating lease expense, amortization expense of finance leases and intangible assets, stock-based compensation, unrealized foreign currency (gain) loss, loss on divestiture of business, net, loss on extinguishment of debt and deferred tax (benefit) provision.
Net cash provided by operating activities for the six months ended June 30, 2026 was $8.0 million compared to $10.0 million for the six months ended June 30, 2025. The decrease in cash provided by operating activities was primarily due to an increase in non-cash adjusted net loss driven by declines in revenue and direct costs related to the Movies Transaction offset by the changes in operating assets and liabilities, with $11.3 million of cash provided by operating assets and liabilities for the six months ended June 30, 2026 as compared to $1.8 million provided for the six months ended June 30, 2025. The increase was primarily driven by increases in contract liabilities and customer advances, along with increases in accounts payable and accrued expenses in 2026 compared to the prior year.
Investing Activities
Cash provided by (used in) investing activities primarily consists of net proceeds from our divestiture of the Movies Business, payments related to capitalized internal-use software costs, purchases of computer and network equipment to support our technical infrastructure, and furniture and equipment. The extent of these investments will be affected by our ability to expand relationships with existing customers, grow our customer base and introduce new digital formats, as well as constraints on cash expenditures due to our financial position and the current economic environment.
Net cash provided by investing activities for the six months ended June 30, 2026 was $43.5 million compared to net cash used in investing activities of $11.4 million for the six months ended June 30, 2025. The increase in cash provided by investing activities was primarily due to the net proceeds received from the divestiture of the Movies Business of $55.7 million, net of cash transferred.
Financing Activities
Net cash used in financing activities during the six months ended June 30, 2026 was $49.5 million compared to $4.6 million during the six months ended June 30, 2025. The increase in cash used in financing activities was primarily related to the repayment of outstanding principal under the Credit Agreement (totaling $44.6 million) during the six months ended June 30, 2026.
Contractual Payment Obligations
We have certain long-term contractual arrangements that have fixed and determinable payment obligations including purchase obligations with MVPDs and connected TV data providers, operating and financing leases, and data storage and bandwidth arrangements.
We have data licensing agreements with a number of MVPDs and other providers for set-top box and connected TV data. These agreements have remaining terms of less than one year to five years. As of June 30, 2026, the total fixed payment obligations related to set-top box and connected TV data agreements are $83.6 million and $18.1 million, respectively. In addition, we expect to make variable payments related to a set-top box data agreement totaling an estimated $77.0 million over the next five years.
We have both operating and financing leases related to corporate office space and equipment. Our leases have remaining terms from less than one year to four years. As of June 30, 2026, the total fixed payment obligation related to these agreements is $13.7 million.
In 2025, we amended an agreement for cloud-based data storage and bandwidth services to help process and store our data, extending the term through 2028. The remaining term for this agreement is less than three years. As of June 30, 2026, the total fixed payment obligation related to this agreement is $46.9 million.
Future Capital Requirements
Our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors, including the timing of cash collections from our customers, data costs and other trade payables, service of our debt and lease facilities, and expenses from ongoing compliance efforts, legal matters, strategic transactions, and our recently announced realignment plan. To the extent that our existing cash, cash equivalents and operating cash flow, together with savings from the realignment plan and other cost-reduction initiatives undertaken by our management, are insufficient to fund our future activities and requirements, we may need to raise additional funds through public or private equity or debt financing. Our history of net losses, as well as disruption and volatility in global capital and credit markets, could impact our ability to access capital resources on terms acceptable to us or at all. If we issue additional equity securities in order to raise additional funds or for other purposes, further dilution to existing stockholders may occur.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the amounts reported in our Condensed Consolidated Financial Statements and the accompanying Notes to Condensed Consolidated Financial Statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
Refer to the critical accounting estimates disclosed in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our 2025 10-K for detailed information about the estimates and assumptions that we consider to be the most critical to an understanding of our financial condition and results of operations. These estimates and assumptions involve significant judgments and uncertainties, and actual results in these areas could differ from our estimates. Refer to Footnote 2, Summary of Significant Accounting Policies, for further information on our most significant accounting policies.
comScore Inc. published this content on August 14, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 14, 2026 at 21:34 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]