The Meet Group, Inc. (NASDAQ: MEET), a public market leader in
the mobile meeting space, today reported financial results for its
second quarter ended June 30, 2017.
Second Quarter 2017 Financial Highlights
- Total revenue of $31.3 million, up 91%
year over year.
- Mobile revenue of $23.3 million, up 55%
year over year.
- Adjusted EBITDA of $7.4 million, up 23%
year over year, or a 24% margin.
- GAAP net income of $0.9 million, or
$0.01 per diluted share. This compares to net income of $29.6
million, or $0.55 per diluted share, in the second quarter of 2016,
which included a one-time deferred tax benefit of $27.3
million.
- Non-GAAP net income increased 37% year
over year to $6.6 million, or $0.09 per diluted share.
- Cash and Cash Equivalents totaled $32.3
million at June 30, 2017.
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct
comparable GAAP financial measure, below.)
"We are excited to have closed the acquisition of Ifwe Inc.
during the quarter, adding the Tagged and Hi5 mobile apps to our
portfolio. We are also thrilled to have completed the launch of
livestreaming video on MeetMe. Since the time of our Q1 earnings
announcement in May, we have increased daily video minutes 80% to
7.2 million, with more than 20% of our users watching videos every
day. We expect to fully launch livestreaming video on Tagged and
Skout by the end of this quarter, which we believe will lead to
further gains in video engagement.”
“What’s more, given our users’ rapid adoption of video and our
accelerating engagement metrics associated with that, we believe we
are well positioned to take advantage of the high demand for video
advertising inventory and that video reflects a substantial
monetization opportunity. We plan to move swiftly to monetize our
video feature. By the end of this quarter, we expect to launch new
banner and native advertising units within the video experience
itself. We also intend to launch gifting inside of video, which we
expect to increase our in-app purchase revenue. Gifting has proven
to be a powerful engine for monetization on several livestreaming
apps, including Momo in China and Live.me and Live.ly in the US. We
believe our users are well suited to the gifting mechanic, and it
is the number one most requested feature among our broadcasters. We
look forward to launching it within the coming weeks.”
David Clark, Chief Financial Officer of The Meet Group, added,
“Our mobile revenue growth of 55% year over year reflects increases
in our mobile impressions through the acquisitions of Ifwe Inc. and
Skout, Inc. Adjusted EBITDA increased 23% to $7.4 million for the
quarter, representing a 24% adjusted EBITDA margin. We generated
$8.0 million in cash from operations, ending the quarter with $32.3
million cash and cash equivalents.
Company Outlook:
The Company expects the following outlook for the third quarter
2017:
- Revenue in the range of $32 million to
$34 million, representing 86 to 98 percent growth
- Adjusted EBITDA in the range of $7.5
million to $9.5 million, representing 9 to 39 percent growth
The Company has updated its outlook for the full year 2017:
- Revenue in the range of $121 to $126,
representing 50 to 66 percent growth
- Adjusted EBITDA in the range of $32
million to $37 million, representing 9 to 26 percent growth
David Clark commented: “In our outlook, we have incorporated
what we consider a conservative view on advertising rates
reflecting our recent experience as industry supply growth has been
increasing at a faster pace than demand. We intend to begin
monetizing our substantial video asset within the coming weeks
while accelerating the rollout of higher-end native units across
the portfolio, and we believe these efforts will put us back on the
path to rising ARPU.”
Webcast and Conference Call Details
Management will host a webcast and conference call to discuss
second quarter 2017 financial results today, August 3, 2017 at 4:30
p.m. Eastern time. To access the call dial 888-283-6901 (US and
Canada) or +1 719-325-2349 (International) and when prompted
provide the participant passcode 4820998 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 adjusted EBITDA will
continue to grow, whether and when we will fully launch
livestreaming video on Tagged and Skout, whether the launch of
livestreaming video on Tagged and Skout will lead to further gains
in video engagement, whether we are well positioned to take
advantage of the high demand for video advertising inventory and
video reflects a substantial monetization opportunity, whether we
will move swiftly to monetize our video feature, whether and when
we will launch new banner and native advertising units within the
video experience, whether and when we will launch gifting inside of
our video feature, whether our users are well suited to the gifting
mechanic, whether we will meet our third quarter and year end
revenue and adjusted EBITDA guidance, and whether the monetization
of our video asset and acceleration the rollout of higher-end
native units across our portfolio will put us back on the path to
rising ARPU. 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
Quarterly Report on Form 10-Q for the quarter ended March 31, 2017
filed with the SEC on May 10, 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)
June
30,2017
December
31,2016
ASSETS CURRENT ASSETS: Cash and cash equivalents $
32,252,734 $ 21,852,531 Accounts receivable, net of allowance of
$309,000 and $283,000, at June 30, 2017 and December 31, 2016,
respectively 20,810,796 23,737,254 Prepaid expenses and other
current assets
5,353,355
1,489,267 Total current assets
58,416,885 47,079,052
Restricted Cash 894,057 393,484 Goodwill 150,088,783
114,175,554 Property and equipment, net 3,491,539 2,466,110
Intangible assets, net 37,236,258 17,010,565 Deferred taxes
27,562,319 28,253,827 Other assets
584,292
110,892 Total assets
$ 278,274,133
$ 209,489,484
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable $ 3,552,147 $ 5,350,336 Accrued liabilities
12,770,565 8,395,060 Current portion of long-term debt 7,500,000
Current portion of capital lease obligations 81,761 221,302
Deferred revenue
1,188,881
434,197 Total current liabilities 25,093,354
14,400,895 Long-term debt
5,625,000
- Total liabilities
30,718,354
14,400,895 STOCKHOLDERS'
EQUITY: Preferred stock, $.001 par value; authorized -
5,000,000 Shares at June 30, 2017 and December 31, 2016; 0 shares
issued and outstanding at June 30, 2017 and December 31, 2016 - -
Common stock, $.001 par value; authorized - 100,000,000 Shares;
71,794,766 and 58,945,607 issued and outstanding at June 30, 2017
and December 31, 2016, respectively 71,798 58,949 Additional
paid-in capital 403,025,701 351,873,801 Accumulated deficit
(155,541,720 )
(156,844,161 ) TOTAL STOCKHOLDERS'
EQUITY 247,555,779
195,088,589 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $
278,274,133 $
209,489,484 THE MEET
GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED) Three
Months Ended June 30, Six Months Ended June
30, 2017
2016 2017
2016 Revenues
$ 31,329,468 $
16,388,991 $
51,388,265 $
29,710,662 Operating costs and expenses:
Sales and marketing 4,599,842 3,226,344 9,705,350 5,547,767 Product
development and content 16,526,905 6,214,062 24,984,399 11,922,162
General and administrative 5,160,799 1,867,590 8,023,226 4,215,758
Depreciation and amortization 2,965,175 753,918 4,650,014 1,505,182
Acquisition and restructuring
3,769,425
1,160,349 5,269,854
1,160,349 Total operating costs
and expenses
33,022,146
13,222,263 52,632,843
24,351,218 (Loss) income
from operations
(1,692,678 )
3,166,728 (1,244,578
) 5,359,444 Other
income (expense): Interest income 1,400 6,447 3,970 11,562 Interest
expense (175,254 ) (5,360 ) (177,586 ) (12,105 ) Change in warrant
liability - (787,391 ) - (545,614 ) (Loss) gain on foreign currency
adjustment
(9,229 )
18,201 (11,429
) 34,553 Total other
expense
(183,083 )
(768,103 ) (185,045
) (511,604 )
(Loss) income before income taxes (1,875,761 ) 2,398,625 (1,429,623
) 4,847,840 Benefit from income taxes
2,732,356
27,219,764
2,732,064 27,125,446
Net income
$ 856,595
$ 29,618,389 $
1,302,441 $
31,973,286 Basic and diluted net income
per common stockholders: Basic net income per common stockholders
$ 0.01 $
0.61 $ 0.02
$ 0.67 Diluted net income per
common stockholders
$ 0.01
$ 0.55 $
0.02 $ 0.59
Weighted average shares outstanding: Basic
70,122,234 48,218,184
65,632,962
47,838,466 Diluted
74,885,903 54,061,306
70,569,243
53,863,966 Comprehensive income
$ 856,595 $
29,618,389 $
1,302,441 $
31,973,286 THE MEET GROUP,
INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO
ADJUSTED EBITDA (UNAUDITED)
Three Months Ended June 30, Six Months
Ended June 30, 2017
2016
2017 2016
Net income
$ 856,595
$ 29,618,389 $
1,302,441 $
31,973,286 Interest expense 175,254
5,360 177,586 12,105 Change in warrant liability - 787,391 -
545,614 Benefit from income taxes (2,732,356 ) (27,219,764 )
(2,732,064 ) (27,125,446 ) Depreciation and amortization 2,965,175
753,918 4,650,014 1,505,182 Stock-based compensation expense
2,368,192 915,572 3,502,350 1,643,352 Acquisition and restructuring
3,769,425 1,160,349 5,269,854 1,160,349 Loss (gain) on foreign
currency adjustment
9,229
(18,201 ) 11,429
(34,553 ) Adjusted EBITDA
$ 7,411,514 $
6,003,014 $
12,181,610 $
9,679,889 GAAP basic net income
per common stockholders
$ 0.01
$ 0.61 $
0.02 $ 0.67
GAAP diluted net income per common stockholders
$
0.01 $ 0.55
$ 0.02 $
0.59 Basic adjusted EBITDA per common
stockholders
$ 0.11 $
0.12 $ 0.19
$ 0.20 Diluted adjusted EBITDA per
common stockholders
$ 0.10
$ 0.11 $
0.17 $ 0.18
Weighted average shares outstanding Basic
70,122,234 48,218,184
65,632,962
47,838,466 Diluted
74,885,903 54,061,306
70,569,243
53,863,966 THE MEET GROUP,
INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME (UNAUDITED)
Three Months Ended June 30, Six
Months Ended June 30, 2017
2016
2017 2016
GAAP Net Income
$ 856,595
$ 29,618,389 $
1,302,441 $
31,973,286 Stock-based compensation
expense 2,368,192 915,572 3,502,350 1,643,352 Amortization of
intangibles 2,378,152 381,916 3,604,307 760,666 Benefit from income
taxes (2,732,356 ) (27,219,764 ) (2,732,064 ) (27,125,446 )
Acquisition and restructuring
3,769,425
1,160,349 5,269,854
1,160,349 Non-GAAP net Income
$ 6,640,008 $
4,856,462 $
10,946,888 $
8,412,207 GAAP basic net income
per common stockholder
$ 0.01
$ 0.61 $
0.02 $ 0.67
GAAP diluted net income per common stockholder
$
0.01 $ 0.55
$ 0.02 $
0.59 Basic Non-GAAP net income per common
stockholder
$ 0.09 $
0.10 $ 0.17
$ 0.18 Diluted Non-GAAP net income
per common stockholder
$ 0.09
$ 0.09 $
0.16 $ 0.16
Weighted average shares outstanding Basic
70,122,234 48,218,184
65,632,962
47,838,466 Diluted
74,885,903 54,061,306
70,569,243
53,863,966
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170803006283/en/
Investor Contact:The Blueshirt GroupAllise Furlani or
Brinlea Johnson, 212-331-8433IR@Themeetgroup.com
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