The Meet Group, Inc. (NASDAQ: MEET), a public market leader in
the mobile meeting space, today reported financial results for its
first quarter ended March 31, 2017.
First Quarter 2017 Financial Highlights
- Total revenue of $20.1 million, up 51%
year over year.
- Mobile revenue of $18.8 million, up 61%
year over year.
- Adjusted EBITDA of $4.8 million, up 30%
year over year, or a 24% margin.
- GAAP net income of $0.4 million, or
$0.01 per diluted share, compared to $2.4 million, or $0.04 per
diluted share, in the first quarter of 2016.
- Non-GAAP net income of $4.3 million, or
$0.07 per diluted share, up 21% year over year.
- Cash and Cash Equivalents totaled $74.5
million at March 31, 2017, of which $60 million was used for the
Ifwe Inc. acquisition on April 3, 2017.
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct
comparable GAAP financial measure, below.)
"In the first quarter, we continued to effectively execute our
strategy to innovate, acquire, and build the largest mobile
portfolio for meeting new people,” said Geoff Cook, Chief Executive
Officer of The Meet Group. “On April 3, we successfully closed on
the acquisition of if(we), a social and mobile technology company
based in San Francisco with two leading mobile brands for meeting
and chatting with new people: Tagged and Hi5. While only one month
into the integration, we have already consolidated the Skout team
into the if(we) office, putting all our West Coast employees under
one roof. The if(we) team today is primarily focused on two key
priorities: advertising monetization and video. I expect great
things from the West Coast team and rapid progress toward
increasing Tagged ARPU and launching live-streaming video.
"Additionally, we made strong progress toward rolling out
livestreaming video inside of the MeetMe app. Currently, three out
of four MeetMe users have access to the Live feature within the
MeetMe app. Of users with access, we are seeing 13-15% watching
live video every day. Our users are generating and consuming vast
amounts of video content. For example, on a recent day we saw over
65,000 broadcasts started, generating 3 million views, 2 million
live chats from viewers, and 70,000 hours of total time in video.
Our broadcasters are currently broadcasting for approximately 40
minutes a day, and our viewers are watching for approximately 23
minutes a day. We believe these initial results are very
encouraging and bode well for the future of livestreaming video on
our portfolio of apps."
David Clark, Chief Financial Officer of The Meet Group, added,
“Our mobile revenue growth of 61% year over year was driven by
increases in our mobile impressions through the acquisition of
Skout. Adjusted EBITDA increased 30% to $4.8 million for the
quarter, representing a 24% adjusted EBITDA margin. We generated
$8.7 million in cash from operations, ending the quarter with $74.5
million, of which $60 million was used in April to acquire
if(we).”
Webcast and Conference Call Details
Management will host a webcast and conference call to discuss
first quarter 2017 financial results today, May 8, 2017 at 4:30
p.m. Eastern time. To access the call dial 888-806-6208 (US and
Canada) or +1 913-312-1446 (International) and when prompted
provide the participant passcode 5107015 to the operator. In
addition, a webcast of the conference call will be available live
on the Investor Relations section of the Company’s website at
www.themeetgroup.com and a replay of the webcast will be available
for 90 days.
About The Meet Group
The Meet Group (NASDAQ: MEET) is a fast-growing portfolio of
mobile apps designed to meet the universal need for human
connection. Using innovative products and sophisticated data
science, The Meet Group keeps its approximately 2.8 million mobile
daily active users engaged and originates untold numbers of casual
chats, friendships, dates, and marriages. The Meet Group offers
advertisers the opportunity to reach customers on a global scale
with hundreds of millions of daily mobile ad impressions. The Meet
Group utilizes high user density, economies of scale, and leading
monetization strategies with the goal of maximizing adjusted
EBITDA. Our apps – currently MeetMe®, Skout®, Tagged®, and Hi5® –
let users in more than 100 countries chat, share photos, stream
live video, and discuss topics of interest, and are available
on iPhone, iPad, and Android in multiple
languages. For more information, please
visit http://www.themeetgroup.com.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including whether our total revenue and mobile
revenue will continue to grow, whether our net income will continue
to grow, whether our adjusted EBITDA will continue to grow, whether
our West Coast team will make rapid progress toward increasing
Tagged ARPU and launching live-streaming video, whether and when we
will achieve full roll out of livestreaming video inside of our
MeetMe app, whether our initial results in the livestreaming video
roll out bode well for the future of livestreaming video on our
portfolio of apps, and whether the mobile advertising industry will
remain strong. All statements other than statements of historical
facts contained herein are forward-looking statements. The words
“believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,”
“should,” “plan,” “could,” “target,” “potential,” “project,” “is
likely,” “expect” and similar expressions, as they relate to us,
are intended to identify forward-looking statements. We have based
these forward-looking statements largely on our current
expectations and projections about future events and financial
trends that we believe may affect our financial condition, results
of operations, business strategy and financial needs. Important
factors that could cause actual results to differ from those in the
forward-looking statements include the risk that our applications
will not function easily or otherwise as anticipated, the risk that
we will not launch additional features and upgrades as anticipated,
the risk that unanticipated events affect the functionality of our
applications with popular mobile operating systems, any changes in
such operating systems that degrade our mobile applications’
functionality and other unexpected issues which could adversely
affect usage on mobile devices. Further information on our risk
factors is contained in our filings with the Securities and
Exchange Commission (“SEC”), including the Form 10-K for the year
ended December 31, 2016 filed with the SEC on March 9, 2017 and our
Current Report on Form 8-K filed with the SEC on March 6, 2017. Any
forward-looking statement made by us herein speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
Regulation G – Non-GAAP Measures
The Company defines mobile traffic and engagement metrics
(including MAU, DAU, chats per day, and new users per day) to
include mobile app traffic for all properties and mobile web
traffic for MeetMe and Skout.
The Company uses Adjusted EBITDA and Non-GAAP Net Income, which
are not calculated and presented in accordance with U.S. generally
accepted accounting principles (“GAAP”), in evaluating its
financial and operational decision making and as a means to
evaluate period-to period comparison. The Company uses these
non-GAAP financial measures for financial and operational
decision-making and as a means to evaluate period-to-period
comparisons. The Company presents these non-GAAP financial measures
because it believes them to be an important supplemental measure of
performance that is commonly used by securities analysts, investors
and other interested parties in the evaluation of companies in our
industry. We refer you to the reconciliations below.
The Company defines Adjusted EBITDA as earnings (or loss) from
operations before interest expense, benefit or provision for income
taxes, depreciation and amortization, stock-based compensation,
warrant obligations, non-recurring acquisition, restructuring or
other expenses, gain or loss on cumulative foreign currency
translation adjustment, gain on sale of asset, bad debt expense
outside the normal range, and goodwill and long-lived asset
impairment charges. The Company excludes stock-based compensation
because it is non-cash in nature. The Company defines Non-GAAP Net
Income as earnings (or loss) before benefit or provision for income
taxes, amortization of intangibles, non-recurring acquisition and
restructuring costs, bad debt expense outside the normal range, and
non-cash stock based compensation.
Non-GAAP financial measures should not be considered as an
alternative to net income, operating income, cash flow from
operating activities, as a measure of liquidity or any other
financial measure. They may not be indicative of the historical
operating results of the Company nor is it intended to be
predictive of potential future results. Investors should not
consider non-GAAP financial measures in isolation or as a
substitute for performance measures calculated in accordance with
GAAP.
THE MEET GROUP, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, 2017 December 31,
2016 ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 74,526,312 $ 21,852,531 Accounts receivable, net of
allowance of $256,000 and $283,000, at March 31, 2017 and December
31, 2016, respectively 15,821,440 23,737,254 Prepaid expenses and
other current assets
1,405,695
1,489,267 Total current assets
91,753,447 47,079,052
Restricted Cash 393,776 393,484 Goodwill 114,175,554
114,175,554 Property and equipment, net 2,157,936 2,466,110
Intangible assets, net 15,784,410 17,010,565 Deferred taxes
28,271,292 28,253,827 Other assets
96,565
110,892 TOTAL ASSETS
$ 252,632,980
$ 209,489,484
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable $ 3,403,069 $ 5,350,336 Accrued liabilities
7,764,556 8,395,060 Current portion of capital lease obligations
151,485 221,302 Deferred revenue
436,556
434,197 Total current liabilities
11,755,666 14,400,895
TOTAL LIABILITIES $
11,755,666 $
14,400,895 STOCKHOLDERS'
EQUITY: Preferred stock, $.001 par value; authorized -
5,000,000 Shares at March 31, 2017 and December 31, 2016; 0 shares
issued and outstanding at March 31, 2017 and December 31, 2016 $ -
$ - Common stock, $.001 par value; authorized - 100,000,000 Shares;
68,970,772 and 58,945,607 issued and outstanding at March 31, 2017
and December 31, 2016, respectively 68,974 58,949 Additional
paid-in capital 397,206,655 351,873,801 Accumulated deficit
(156,398,315 )
(156,844,161 ) TOTAL STOCKHOLDERS'
EQUITY 240,877,314
195,088,589 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $
252,632,980 $
209,489,484 See notes to
consolidated financial statements
THE MEET GROUP,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended March 31,
2017
2016 Revenues
$
20,058,797 $
13,321,671 Operating Costs and Expenses:
Sales and marketing 5,105,508 2,321,423 Product development and
content 8,457,494 5,708,100 General and administrative 2,862,427
2,348,168 Depreciation and amortization 1,684,839 751,264
Acquisition and restructuring
1,500,429
- Total Operating Costs and Expenses
19,610,697
11,128,955 Income from Operations
448,100 2,192,716
Other Income (Expense): Interest income 2,570 5,115 Interest
expense (2,332 ) (6,745 ) Change in warrant liability - 241,777
(Loss) gain on foreign currency adjustment
(2,200 ) 16,352
Total Other Income (Expense)
(1,962
) 256,499 Income
before Income Taxes 446,138 2,449,215 Provision for income taxes
(292 ) (94,317
) Net Income
$ 445,846
$ 2,354,898 Basic
and diluted income per common stockholders: Basic income per common
stockholders
$ 0.01 $
0.05 Diluted income per common stockholders
$ 0.01 $
0.04 Weighted average shares
outstanding: Basic
61,093,810
47,458,748 Diluted
66,204,620 53,666,626
Net income and comprehensive income
$
445,846 $ 2,354,898
See notes to consolidated financial statements
THE MEET GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME ALLOCABLE TO COMMON
STOCKHOLDERS TO ADJUSTED EBITDA (UNAUDITED)
For the Three Months Ended March 31,
2017 2016
Net income allocable to common stockholders
$ 445,846 $
2,354,898 Interest expense 2,332 6,745
Change in warrant liability - (241,777 ) (Benefit) provision for
income taxes 292 94,317 Depreciation and amortization 1,684,839
751,264 Stock-based compensation expense 1,134,158 727,780
Acquisition and restructuring costs 1,500,429 - Cumulative effect
of foreign currency exchange
2,200
(16,352 ) Adjusted EBITDA
$
4,770,096 $ 3,676,875
GAAP basic net income per common stockholders
$ 0.01 $ 0.05
GAAP diluted net income per common stockholders
$ 0.01 $ 0.04
Basic adjusted EBITDA per common stockholders
$
0.08 $ 0.08 Diluted
adjusted EBITDA per common stockholders
$
0.07 $ 0.07
Weighted average number of shares outstanding, Basic
61,093,810 47,458,748
Weighted average number of shares outstanding, Diluted
66,204,620 53,666,626
THE MEET GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME ALLOCABLE TO COMMON
STOCKHOLDERS TO NON-GAAP NET INCOME (UNAUDITED)
For the Three Months Ended March 31,
2017 2016
GAAP Net Income
$ 445,846
$ 2,354,898 Amortization of
Intangibles 1,226,155 378,750 Stock-based compensation expense
1,134,158 727,780 (Benefit) provision for income taxes 292 94,317
Acquisition and restructuring costs
1,500,429
- Non-GAAP Net Income
$
4,306,880 $ 3,555,745
GAAP basic net income per common stockholders
$
0.01 $ 0.05 GAAP diluted net
income per common stockholders
$ 0.01
$ 0.04 Basic Non-GAAP net income per
common stockholders
$ 0.07 $
0.07 Diluted Non-GAAP net income per common
stockholders
$ 0.07 $
0.07 Weighted average number of shares
outstanding, Basic
61,093,810
47,458,748 Weighted average number of shares
outstanding, Diluted
66,204,620
53,666,626
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version on businesswire.com: http://www.businesswire.com/news/home/20170508006324/en/
MKR Group, Inc.Todd Kehrli or Jim Byers(323)
468-2300meet@mkr-group.com
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