Marin Software Incorporated (NASDAQ: MRIN), a leading provider
of digital marketing software for performance-driven advertisers
and agencies, today announced financial results for the third
quarter ended September 30, 2022.
“As marketers face rising economic uncertainty, there is a
greater need to be able to measure, manage, and optimize each
marketing dollar,” said Chris Lien, Marin Software’s Chairman and
CEO. “MarinOne is well positioned to meet these needs, providing
visibility, time savings, and financial lift across search, social,
and ecommerce channels."
Third Quarter 2022 Product
Highlights:
- Launched support for managing Snapchat Ads in MarinOne, giving
advertisers the ability to connect with over 300 million daily
active users with immersive content that inspires action.
- Added support for Pinterest bidding, enabling Pinterest
advertisers to leverage MarinOne’s state of the art
optimization.
- Introduced one-click support for nearly 20 Insights, allowing
users to implement changes with the click of a button to quickly
improve the performance of their accounts, rather than having to
work through bulksheets.
- Added three new Insights, including automated alerts for RSA
Coverage, First Page Minimum Bid, and KPI Performance.
- Introduced three new ways to segment data in the Dimensions
tab, giving users a deeper understanding of performance based on
device, publisher, and match type.
- Expanded Dynamic Actions to allow changes to additional
objects, including Product Targets and Dynamic Targets.
- Introduced sync support for Amazon Portfolios.
- Introduced new ‘Jump To’ filters within Strategies for faster
navigation. Users can filter for campaigns, groups, keywords,
product groups, and dynamic targets.
- Introduced Responsive Bidding, which allows MarinOne Bidding to
sync with publishers more often and with more intelligence. If
Responsive Bidding detects a change to rules, boosts, or Strategy
assignments, bids will immediately be recalculated.
- Expanded support for Google Smart Bidding settings, giving
users more flexibility in selecting the bidding tools that best
meet their needs across Google and Marin.
Third Quarter 2022 Financial
Updates:
- Net revenues totaled $5.0 million, a year-over-year decrease of
19% when compared to $6.2 million in the third quarter of
2021.
- GAAP loss from operations was ($5.8) million, resulting in a
GAAP operating margin of (117%), as compared to a GAAP loss from
operations of ($3.3) million and a GAAP operating margin of (53%)
for the third quarter of 2021.
- Non-GAAP loss from operations was ($4.5) million, resulting in
a non-GAAP operating margin of (91%), as compared to a non-GAAP
loss from operations of ($2.9) million and a non-GAAP operating
margin of (47%) for the third quarter of 2021.
Reconciliations of GAAP to non-GAAP financial measures have been
provided in the financial statement tables included in this press
release. An explanation of these measures is also included below,
under the heading “Non-GAAP Financial Measures.”
Financial Outlook:
Marin is providing guidance for its fourth quarter of 2022 as
follows:
Forward-Looking
Guidance
In millions
Range of Estimate
From
To
Three Months Ending December 31,
2022
Revenues, net
$
4.6
$
5.1
Non-GAAP loss from operations
(4.9
)
(4.5
)
Non-GAAP loss from operations excludes the effects of
stock-based compensation, amortization of internally developed
software, impairment of long-lived assets, capitalization of
internally developed software, non-recurring costs associated with
restructurings, and certain professional fees that the Company has
incurred in responding to third-party subpoenas that the Company
has received related to governmental investigations of Google and
Facebook.
Additionally, the Company does not reconcile its forward-looking
non-GAAP loss from operations, due to variability between revenues
and non-cash items such as stock-based compensation. The GAAP loss
from operations includes stock-based compensation expense, which is
affected by hiring and retention needs, as well as the future price
of Marin’s stock. As a result, a reconciliation of the
forward-looking non-GAAP financial measures to the corresponding
GAAP measures cannot be made without unreasonable effort.
Quarterly Results Conference
Call
Marin Software will host a conference call today at 2:00 PM
Pacific Time (5:00 PM Eastern Time) to review the Company’s
financial results for the quarter ended September 30, 2022, and its
outlook for the future. To access the call, please dial (855)
327-6837 in the United States or (631) 891-4304 internationally
with reference to conference ID 10020237. A live webcast of the
conference call will be accessible at
https://viavid.webcasts.com/starthere.jsp?ei=1569936&tp_key=afea24f81c.
Following the completion of the call through 11:59 p.m. Eastern
Time on November 10, 2022, a recorded replay will be available on
the Company’s website at http://investor.marinsoftware.com/ and a
telephone replay will be available by dialing (844) 512-2921 in the
United States or (412) 317-6671 internationally with the recording
access code 10020237.
About Marin Software
Marin Software Incorporated’s (NASDAQ: MRIN) mission is to give
advertisers the power to drive higher efficiency and transparency
in their paid marketing programs that run on the world’s largest
publishers. Marin Software provides enterprise marketing software
for advertisers and agencies to integrate, align, and amplify their
digital advertising spend across the web and mobile devices. Marin
Software offers a unified SaaS advertising management platform for
search, social, and eCommerce advertising. The Company helps
digital marketers convert precise audiences, improve financial
performance, and make better decisions. Headquartered in San
Francisco with offices worldwide, Marin Software’s technology
powers marketing campaigns around the globe. For more information
about Marin Software, please visit www.marinsoftware.com.
Non-GAAP Financial
Measures
Marin uses certain non-GAAP financial measures in this release.
Marin uses these non-GAAP financial measures internally in
analyzing its financial results and believes they are useful to
investors, as a supplement to GAAP measures, in evaluating its
ongoing operational performance. Marin believes that the use of
these non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
and in comparing our financial results with other companies in our
industry, many of which present similar non-GAAP financial measures
to investors. Non-GAAP financial measures that Marin uses may
differ from measures that other companies may use.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. A reconciliation of the non-GAAP
financial measures to their most directly comparable GAAP measures
has been provided in the financial statement tables included below
in this press release. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to their most
directly comparable GAAP financial measures.
Non-GAAP expenses, measures and net loss per share. Marin
defines non-GAAP sales and marketing, non-GAAP research and
development, non-GAAP general and administrative, non-GAAP gross
profit, non-GAAP operating loss and non-GAAP net loss as the
respective GAAP balances, adjusted for stock-based compensation,
amortization of internally developed software and intangible
assets, impairment of goodwill and long-lived assets, non-cash
expenses related to debt agreements, capitalization of internally
developed software, CARES Act employee retention credit,
non-recurring costs associated with restructurings, and certain
professional fees that the Company has incurred in responding to
third-party subpoenas that the Company has received related to
governmental investigations of Google and Facebook. Non-GAAP net
loss per share is calculated as non-GAAP net loss divided by the
weighted average shares outstanding.
Adjusted EBITDA. Marin defines Adjusted EBITDA as net loss,
adjusted for stock-based compensation expense, depreciation,
amortization of internally developed software and intangible
assets, capitalization of internally developed software, impairment
of goodwill and long-lived assets, benefit from or provision for
income taxes, CARES Act employee retention credit, other income,
net, non-recurring costs associated with restructurings, and
certain professional fees that the Company has incurred in
responding to third-party subpoenas that the Company has received
related to governmental investigations of Google and Facebook.
These amounts are often excluded by other companies to help
investors understand the operational performance of their business.
The Company uses Adjusted EBITDA as a measurement of its operating
performance because it assists in comparing the operating
performance on a consistent basis by removing the impact of certain
non-cash and non-operating items. Adjusted EBITDA reflects an
additional way of viewing aspects of the operations that Marin
believes, when viewed with the GAAP results and the accompanying
reconciliations to corresponding GAAP financial measures, provide a
more complete understanding of factors and trends affecting its
business.
Forward-Looking
Statements
This press release contains forward-looking statements
including, among other things, statements regarding Marin’s
business, impact of investments in product and technology on future
operating results, progress on product development efforts, product
capabilities, advertiser and customer behavior, effects of the
COVID-19 pandemic, and future financial results, including its
outlook for the fourth quarter of 2022. These forward-looking
statements are subject to the safe harbor provisions created by the
Private Securities Litigation Reform Act of 1995. Actual results
could differ materially from those projected in the forward-looking
statements as a result of certain risk factors, including but not
limited to any lingering effects of the global outbreak of COVID-19
on demand for our products and services; the amount of digital
advertising spend managed by our customers using our products; the
extent of customer acceptance and adoption of our MarinOne
platform; the productivity of our personnel and other aspects of
our business; our ability to maintain or grow sales to new and
existing customers; any adverse changes in our relationships with
and access to publishers and advertising agencies and strategic
business partners, including any adverse changes in our revenue
sharing agreement with Google; our ability to raise additional
capital; our ability to manage expenses; the success of any
increased investments that we may make in our engineering and sales
and marketing teams; our ability to retain and attract qualified
management, technical and sales and marketing personnel; any delays
in the release of updates to our product platform or new features
or delays in customer deployment of any such updates or features;
competitive factors, including but not limited to pricing
pressures, entry of new competitors and new applications; quarterly
fluctuations in our operating results due to a number of factors;
inability to adequately forecast our future revenues, expenses,
Adjusted EBITDA, cash flows or other financial metrics; delays,
reductions or slower growth in the amount spent on online and
mobile advertising and the development of the market for
cloud-based software; progress in our efforts to update our
software platform; level of usage and advertising spend managed on
our platform; our ability to maintain or expand sales of our
solutions in channels other than search advertising; any slow-down
in the search advertising market generally; any shift in customer
digital advertising budgets from search to segments in which we are
not as deeply penetrated; the development of the market for digital
advertising; acceptance and continued usage of our platform and
services by customers and our ability to provide high-quality
technical support to our customers; material defects in our
platform including those resulting from any updates we introduce to
our platform, service interruptions at our single third-party data
center or breaches in our security measures; our ability to develop
enhancements to our platform; our ability to protect our
intellectual property; our ability to manage risks associated with
international operations; the impact of fluctuations in currency
exchange rates, particularly an increase in the value of the
dollar; near term changes in sales of our software services or
spend under management may not be immediately reflected in our
results due to our subscription business model; and adverse changes
in general economic or market conditions. These forward-looking
statements are based on current expectations and are subject to
uncertainties and changes in condition, significance, value and
effect as well as other risks detailed in documents filed with the
Securities and Exchange Commission, including our most recent
report on Form 10-K, recent reports on Form 10-Q and current
reports on Form 8-K, which we may file from time to time, and all
of which are available free of charge at the SEC’s website at
www.sec.gov. Any of these risks could cause actual results to
differ materially from expectations set forth in the
forward-looking statements. All forward-looking statements in this
press release reflect Marin’s expectations as of November 3, 2022.
Marin assumes no obligation to, and expressly disclaims any
obligation to update any such forward-looking statements after the
date of this release.
Marin Software Incorporated
Condensed Consolidated Balance
Sheets
(On a GAAP basis)
September 30,
December 31,
(Unaudited; in thousands, except par
value)
2022
2021
Assets:
Current assets:
Cash and cash equivalents
$
31,476
$
46,842
Restricted cash
215
215
Accounts receivable, net
4,241
4,633
Prepaid expenses and other current
assets
2,052
2,324
Total current assets
37,984
54,014
Property and equipment, net
3,205
3,622
Right-of-use assets, operating leases
4,240
1,660
Other non-current assets
583
535
Total assets
$
46,012
$
59,831
Liabilities and Stockholders'
Equity:
Current liabilities:
Accounts payable
$
710
$
975
Accrued expenses and other current
liabilities
4,574
6,176
Note payable, current
—
2,226
Operating lease liabilities
1,620
2,006
Total current liabilities
6,904
11,383
Note payable, net of current
—
1,094
Operating lease liabilities,
non-current
2,620
—
Other long-term liabilities
947
1,096
Total liabilities
10,471
13,573
Stockholders’ equity:
Common stock, $0.001 par value
16
15
Additional paid-in capital
353,702
351,394
Accumulated deficit
(317,216
)
(304,107
)
Accumulated other comprehensive loss
(961
)
(1,044
)
Total stockholders’ equity
35,541
46,258
Total liabilities and stockholders’
equity
$
46,012
$
59,831
Marin Software Incorporated
Condensed Consolidated Statements of
Operations
(On a GAAP basis)
Three Months Ended September
30,
Nine Months Ended September
30,
(Unaudited; in thousands, except per
share data)
2022
2021
2022
2021
Revenues, net
$
4,977
$
6,155
$
14,858
$
18,557
Cost of revenues
3,181
3,175
9,712
9,591
Gross profit
1,796
2,980
5,146
8,966
Operating expenses:
Sales and marketing
1,660
1,266
5,035
3,780
Research and development
3,034
2,677
8,931
7,743
General and administrative
2,923
2,312
7,937
6,176
Total operating expenses
7,617
6,255
21,903
17,699
Loss from operations
(5,821
)
(3,275
)
(16,757
)
(8,733
)
Other income, net
190
298
3,889
846
Loss before income taxes
(5,631
)
(2,977
)
(12,868
)
(7,887
)
Income tax provision (benefit)
105
153
241
(44
)
Net loss
$
(5,736
)
$
(3,130
)
$
(13,109
)
$
(7,843
)
Net loss per common share, basic and
diluted
$
(0.36
)
$
(0.22
)
$
(0.83
)
$
(0.66
)
Weighted-average shares outstanding, basic
and diluted
16,030
14,500
15,741
11,956
Marin Software Incorporated
Condensed Consolidated Statements of
Cash Flows
(On a GAAP basis)
Nine Months Ended September
30,
(Unaudited; in thousands)
2022
2021
Operating activities:
Net loss
$
(13,109
)
$
(7,843
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation
435
670
Amortization of internally developed
software
1,392
1,806
Amortization of deferred costs to obtain
and fulfill contracts
260
364
Forgiveness of Paycheck Protection Program
loan
(3,117
)
—
Interest expense
—
6
Loss on disposals of property and
equipment and right-of-use assets
29
30
Unrealized foreign currency losses
111
43
Stock-based compensation related to equity
awards
2,612
1,273
Provision for bad debts
(50
)
(102
)
Net change in operating leases
(346
)
(396
)
Deferred income tax benefits
(72
)
—
Changes in operating assets and
liabilities
Accounts receivable
486
551
Prepaid expenses and other assets
55
(173
)
Accounts payable
(257
)
(137
)
Accrued expenses and other liabilities
(1,717
)
(1,351
)
Net cash used in operating activities
(13,288
)
(5,259
)
Investing activities:
Purchases of property and equipment
(17
)
(6
)
Capitalization of internally developed
software
(1,343
)
(971
)
Net cash used in investing activities
(1,360
)
(977
)
Financing activities:
Proceeds from issuance of common shares
through at-the-market offering, net of offering costs
—
41,888
Payment of principal on finance lease
liabilities
—
(15
)
Repayment of Paycheck Protection Program
loan
(203
)
—
Employee taxes paid for withheld shares
upon equity award settlement
(394
)
(280
)
Proceeds from employee stock purchase
plan, net
37
29
Net cash (used in) provided by financing
activities
(560
)
41,622
Effect of foreign exchange rate changes on
cash and cash equivalents and restricted cash
(158
)
(48
)
Net (decrease) increase in cash and cash
equivalents and restricted cash
(15,366
)
35,338
Cash and cash equivalents and
restricted cash:
Beginning of period
47,057
14,820
End of the period
$
31,691
$
50,158
Marin Software Incorporated
Reconciliation of GAAP to Non-GAAP
Expenses
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
(Unaudited; in thousands)
2021
2021
2021
2021
2021
2022
2022
2022
Sales and Marketing (GAAP)
$
1,246
$
1,268
$
1,266
$
1,702
$
5,482
$
1,787
$
1,588
$
1,660
Less Stock-based compensation
(66
)
(70
)
(122
)
(150
)
(408
)
(175
)
(157
)
(99
)
Less Restructuring related expenses
2
—
—
(136
)
(134
)
—
—
—
Plus CARES Act employee retention
credit
42
42
60
—
144
—
—
—
Sales and Marketing (Non-GAAP)
$
1,224
$
1,240
$
1,204
$
1,416
$
5,084
$
1,612
$
1,431
$
1,561
Research and Development (GAAP)
$
2,399
$
2,667
$
2,677
$
3,045
$
10,788
$
2,917
$
2,980
$
3,034
Less Stock-based compensation
(98
)
(133
)
(159
)
(204
)
(594
)
(224
)
(213
)
(303
)
Less Restructuring related expenses
(2
)
—
—
—
(2
)
(36
)
(59
)
(76
)
Plus CARES Act employee retention
credit
252
238
245
—
735
—
—
—
Plus Capitalization of internally
developed software
434
238
362
343
1,377
512
408
449
Research and Development (Non-GAAP)
$
2,985
$
3,010
$
3,125
$
3,184
$
12,304
$
3,169
$
3,116
$
3,104
General and Administrative (GAAP)
$
1,869
$
1,995
$
2,312
$
3,151
$
9,327
$
2,469
$
2,545
$
2,923
Less Stock-based compensation
(63
)
(130
)
(248
)
(287
)
(728
)
(334
)
(340
)
(405
)
Less Restructuring related expenses
(2
)
—
—
—
(2
)
—
—
(78
)
Plus CARES Act employee retention
credit
70
66
67
—
203
—
—
—
Less Third-party subpoena-related
expenses
—
—
(87
)
(405
)
(492
)
(72
)
(99
)
(198
)
General and Administrative (Non-GAAP)
$
1,874
$
1,931
$
2,044
$
2,459
$
8,308
$
2,063
$
2,106
$
2,242
Marin Software Incorporated
Reconciliation of GAAP to Non-GAAP
Measures
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
(Unaudited; in thousands)
2021
2021
2021
2021
2021
2022
2022
2022
Gross Profit (GAAP)
$
3,067
$
2,919
$
2,980
$
2,569
$
11,535
$
1,833
$
1,517
$
1,796
Plus Stock-based compensation
35
46
103
107
291
124
90
148
Plus Amortization of internally developed
software
624
596
586
550
2,356
542
431
419
Plus Restructuring related expenses
1
—
—
42
43
17
—
—
Less CARES Act employee retention
credit
(175
)
(179
)
(174
)
—
(528
)
—
—
—
Gross Profit (Non-GAAP)
$
3,552
$
3,382
$
3,495
$
3,268
$
13,697
$
2,516
$
2,038
$
2,363
Operating Loss (GAAP)
$
(2,447
)
$
(3,011
)
$
(3,275
)
$
(5,329
)
$
(14,062
)
$
(5,340
)
$
(5,596
)
$
(5,821
)
Plus Stock-based compensation
262
379
632
748
2,021
857
800
955
Plus Amortization of internally developed
software
624
596
586
550
2,356
542
431
419
Plus Restructuring related expenses
3
—
—
178
181
53
59
154
Less CARES Act employee retention
credit
(539
)
(525
)
(546
)
—
(1,610
)
—
—
—
Less Capitalization of internally
developed software
(434
)
(238
)
(362
)
(343
)
(1,377
)
(512
)
(408
)
(449
)
Plus Third-party subpoena-related
expenses
—
—
87
405
492
72
99
198
Operating Loss (Non-GAAP)
$
(2,531
)
$
(2,799
)
$
(2,878
)
$
(3,791
)
$
(11,999
)
$
(4,328
)
$
(4,615
)
$
(4,544
)
Net Loss (GAAP)
$
(2,212
)
$
(2,501
)
$
(3,130
)
$
(5,101
)
$
(12,944
)
$
(1,999
)
$
(5,374
)
$
(5,736
)
Plus Stock-based compensation
262
379
632
748
2,021
857
800
955
Plus Amortization of internally developed
software
624
596
586
550
2,356
542
431
419
Plus Restructuring related expenses
3
—
—
178
181
53
59
154
Less CARES Act employee retention
credit
(539
)
(525
)
(546
)
—
(1,610
)
—
—
—
Less Capitalization of internally
developed software
(434
)
(238
)
(362
)
(343
)
(1,377
)
(512
)
(408
)
(449
)
Plus Third-party subpoena-related
expenses
—
—
87
405
492
72
99
198
Less Forgiveness and repayment of Paycheck
Protection Program loan
—
—
—
—
—
(3,320
)
—
—
Net Loss (Non-GAAP)
$
(2,296
)
$
(2,289
)
$
(2,733
)
$
(3,563
)
$
(10,881
)
$
(4,307
)
$
(4,393
)
$
(4,459
)
Marin Software Incorporated
Calculation of Non-GAAP Earnings Per
Share
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
(Unaudited; in thousands, except per
share data)
2021
2021
2021
2021
2021
2022
2022
2022
Net Loss (Non-GAAP)
$
(2,296
)
$
(2,289
)
$
(2,733
)
$
(3,563
)
$
(10,881
)
$
(4,307
)
$
(4,393
)
$
(4,459
)
Weighted-average shares outstanding, basic
and diluted
10,300
11,034
14,500
15,513
12,846
15,537
15,651
16,030
Non-GAAP net loss per common share, basic
and diluted
$
(0.22
)
$
(0.21
)
$
(0.19
)
$
(0.23
)
$
(0.85
)
$
(0.28
)
$
(0.28
)
$
(0.28
)
Marin Software Incorporated
Reconciliation of Net Loss to Adjusted
EBITDA
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
(Unaudited; in thousands)
2021
2021
2021
2021
2021
2022
2022
2022
Net Loss
$
(2,212
)
$
(2,501
)
$
(3,130
)
$
(5,101
)
$
(12,944
)
$
(1,999
)
$
(5,374
)
$
(5,736
)
Depreciation
240
223
207
181
851
179
199
57
Amortization of internally developed
software
624
596
586
550
2,356
542
431
419
Provision for (benefit from) income
taxes
92
(289
)
153
(90
)
(134
)
61
75
105
Stock-based compensation
262
379
632
748
2,021
857
800
955
CARES Act employee retention credit
(539
)
(525
)
(546
)
—
(1,610
)
—
—
—
Capitalization of internally developed
software
(434
)
(238
)
(362
)
(343
)
(1,377
)
(512
)
(408
)
(449
)
Restructuring related expenses
3
—
—
178
181
53
59
154
Other income, net
(327
)
(221
)
(298
)
(138
)
(984
)
(3,402
)
(297
)
(190
)
Third-party subpoena-related expenses
—
—
87
405
492
72
99
198
Adjusted EBITDA
$
(2,291
)
$
(2,576
)
$
(2,671
)
$
(3,610
)
$
(11,148
)
$
(4,149
)
$
(4,416
)
$
(4,487
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221103005140/en/
Investor Relations, Marin Software
ir@marinsoftware.com
Media Contact Wesley MacLaggan Marketing, Marin Software
(415) 399-2580 press@marinsoftware.com
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