Kubient Reports Strong Third Quarter 2021 Results

Company Records Net Revenue Increase of 141% Year-Over-Year and 35% Quarter-Over-Quarter

Continued Expansion of KAI Platform Drives Strong Momentum Heading into 2022

Kubient, Inc., a cloud-based software platform for digital advertising, today reported financial results for the third quarter ended September 30, 2021.

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Third Quarter 2021 and Recent Operational Highlights

• Net revenue increased 141% year-over-year and 35% quarter-over-quarter, as a result of an increase in partnerships on both the supply and demand side of the Audience Cloud marketplace
• Partnered with Verve Group to increase transparency and reduce fraud in the advertising supply chain. The partnership opens up premium inventory for advertisers working with Verve Group, and enables Kubient’s publishers the ability to access additional premium inventory from Verve Group, ultimately creating more transparency and efficiency for brands and agencies
• Publisher inventory that Kubient can monetize, or ad impression opportunities, for the Audience Cloud, Kubient’s flexible open marketplace for both advertisers and publishers to reach, monetize and connect their audiences, increased 156% from Q2 2021 to Q3 2021
• The number of total direct publisher partnerships that have authorized Kubient to sell their inventory is currently 3,270, a decrease of 298 from the prior quarter. The decrease in publishers was a result of KAI identifying and removing fraudulent websites within the Audience Cloud
• Revealed figures on the state of ad fraud as identified by the company’s proprietary ad fraud detection tool, Kubient Artificial Intelligence (“KAI”)
• During the three months ended September 30, 2021, Kubient continued its expansion of KAI and performed 8 KAI audits with prospective customers. Year to date, the Company has performed a total of 14 KAI audits

Management Commentary
“It is greatly encouraging to recognize a record net revenue increase of 141% year-over-year and 35% quarter-over-quarter, as we continue to steadily expand and recognize that advertisers and publishers are starting to embrace our concept of a transparent and fraud free marketplace,” said Kubient Founder, Chairman, CSO, and Interim CEO Paul Roberts. “With our sales team increasingly speaking to more prospective customers, a common underlying theme we have unveiled is that companies continue to be very interested in our technology and our ability to help them generate a higher ROI, in a safe and efficient manner. The growing interest centers around KAI, as we’ve performed a total of eight KAI audits in the third quarter and 14 audits year to date. Though we are in the early stages of the industry adopting KAI, we are confident in our ability to capitalize on the growing opportunities and expanding our footprint.

“In conjunction with our organic growth strategy, we are continuing to make progress with our M&A initiative. We are deep in the due diligence phase with several companies and have signed a number of non-binding LOIs, of which we are confident will not only result in acquisition but will add lasting value to our growth strategy. It has been our goal to bolster both the publisher and advertising side of the Audience Cloud marketplace equation, and I am confident that our M&A efforts will help increase our marketplace both vertically and horizontally. As the year comes to a close, we remain laser focused on executing across all fronts and getting one step closer towards transforming the digital advertising industry”

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Third Quarter 2021 Financial Results
Net revenues increased to approximately $677,000 compared to approximately $280,000 in the same period last year. This represents a 141% increase year-over-year and a 36% increase from the prior quarter.

Technology expenses increased to approximately $777,000 from approximately $546,000 in the same period last year. The year-over-year increase was a result of increases in salary expense arising from a surge in technology personnel headcount, as well as increased consulting fees, cloud hosting costs, and non-cash expenses of stock based compensation and amortization of software.

General and administrative expenses increased to approximately $1.5 million compared to approximately $1.0 million in the same period last year. The year-over-year increase was primarily due to increases in salary expense primarily arising from an increase in general and administrative headcount, as well as increased stock-based compensation, insurance expense, office related expenses and taxes.

GAAP net loss was approximately $2.3 million, or $(0.16) loss per share, compared to a net loss of approximately $4.2 million, or $(1.03) loss per share, in the same period last year. The year-over-year decrease in net loss was due to increased revenues and a decrease in other expenses.

Adjusted EBITDA, a non-GAAP measure, decreased to approximately $(1.9) million, compared to an adjusted EBITDA of approximately $(1.5) million in the same period last year.

As of September 30, 2021, the Company had a cash balance of approximately $28.7 million.

Conference Call
Kubient will hold a conference call today (November 10, 2021) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.

Kubient management will host the conference call, followed by a question and answer period.

U.S. dial-in: 1-877-344-8082
International dial-in: 1-213-992-4618

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

A telephonic replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through November 17, 2021.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 147442

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