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, 2019.
First Quarter 2019 Financial Highlights
- Total revenue of $49.5 million, up 32%
year over year.
- GAAP net income of $1.3 million, or
$0.02 per diluted share, compared to a GAAP net loss of $4.2
million, or a loss of $0.06 per diluted share, in the prior year
quarter.
- Adjusted EBITDA of $8.1 million,
compared to Adjusted EBITDA of $5.2 million in the prior year
quarter.
- Non-GAAP net income of $7.0 million, or
$0.09 per diluted share, compared to $4.1 million, or $0.05 per
diluted share, in the prior year quarter.
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct
comparable GAAP financial measures, below.)
“Our strong progress in video continued in the first quarter,”
said Geoff Cook, Chief Executive Officer of The Meet Group. “We
grew video revenue to more than $20 million, a more than four-fold
increase from the year ago quarter, and we set new records growing
video revenue on each of our apps. Average video revenue per daily
active video user increased to 26 cents, up from 18 cents in the
fourth quarter of 2018, while approximately 20% of users engaged in
video every day.
“Operationally, we completed the rollout of Battles in the
quarter, with the launch on Tagged and Lovoo, and we made good
progress integrating our newly acquired Growlr app. We improved
operating efficiency from the year ago quarter, growing adjusted
EBITDA margin by 250 basis points.
“We are excited at the many opportunities to drive video growth.
Over the coming quarters we expect to bring new features and
interactive video formats including 1x1 live video, a levels system
to further gamify our livestreams, interactive games, and new
shows, all of which we expect will contribute to engagement and
monetization.
“In 2018 we drove growth by rolling out livestreaming video to
new communities. In 2019, we expect to drive growth by executing on
our product roadmap and enabling community and connection for our
users. With 80% of our users still to reach with our video features
and with new and interesting monetization projects on the horizon,
we look forward to delivering new products that drive meaningful
connections for our users.”
First Quarter Financial Results
For the first quarter of 2019, the Company reported revenue of
$49.5 million, an increase of $11.9 million, or 32%, from $37.6
million in the first quarter of 2018. GAAP net income for the first
quarter of 2019 was $1.3 million, or $0.02 per diluted share,
compared to a GAAP net loss of $4.2 million, or a loss of $0.06 per
diluted share, in the first quarter of 2018. Adjusted EBITDA for
the first quarter of 2019 was $8.1 million, compared to $5.2
million in the first quarter of 2018. Non-GAAP net income for the
first quarter of 2019 was $7.0 million, or $0.09 per diluted share,
compared to $4.1 million, or $0.05 per diluted share, in the first
quarter of 2018.
The Company ended the quarter with $19.8 million in cash and
cash equivalents.
Company Outlook
The Company is providing the following outlook for the second
quarter of 2019 and is reiterating its previously issued guidance
for the full year 2019.
Second quarter 2019:
- Revenue in the range of $50.3 million
to $51.3 million
- Adjusted EBITDA in the range of $8.6
million to $9.1 million
Full year 2019:
- Revenue in the range of $210.0 million
to $215.0 million
- Adjusted EBITDA in the range of $39.0
million to $42.0 million
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
March 31, 2019
December 31, 2018
ASSETS CURRENT ASSETS: Cash and cash equivalents $
19,811,733 $ 28,365,725 Accounts receivable, net of allowance of
$708,385 and $383,579 at March 31, 2019 and December 31, 2018,
respectively 26,082,600 27,148,484 Prepaid expenses and other
current assets 5,928,680 4,911,057 Total current
assets 51,823,013 60,425,266 Goodwill 156,698,026 148,132,873
Property and equipment, net 4,262,868 4,633,764 Operating lease
right-of-use assets, net 3,362,781 — Intangible assets, net
37,240,026 36,558,439 Deferred taxes 15,825,171 15,648,572 Other
assets 2,172,713 2,453,255
Total assets
$ 271,384,598 $ 267,852,169
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT
LIABILITIES: Accounts payable $ 5,414,478 $ 9,071,193 Accrued
liabilities 19,250,505 19,112,303 Current portion of long-term debt
15,000,000 18,566,584 Current portion of capital lease obligations
133,442 134,067 Current portion of operating lease liabilities
1,432,077 — Deferred revenue 4,736,808 4,620,690
Total current liabilities 45,967,310 51,504,837 Long-term capital
lease obligations, less current portion 15,100 58,683 Long-term
debt, less current portion, net 21,375,996 18,087,956 Long-term
operating lease liabilities, less current portion 1,974,827 —
Long-term derivative liability — 940,216 Other liabilities 825,584
39,651
Total liabilities 70,158,817
70,631,343 STOCKHOLDERS’ EQUITY:
Preferred stock, $.001 par value; authorized - 5,000,000 shares; no
shares issued and outstanding at March 31, 2019 and December 31,
2018 — — Common stock, $.001 par value; authorized - 100,000,000
shares; 75,270,035 and 74,697,526 shares issued and outstanding at
March 31, 2019 and December 31, 2018, respectively 75,272 74,700
Additional paid-in capital 422,471,569 419,455,818 Accumulated
deficit (219,018,426 ) (220,276,025 ) Accumulated other
comprehensive loss (2,302,634 ) (2,033,667 )
Total stockholders’
equity 201,225,781 197,220,826
Total liabilities and stockholders’ equity $
271,384,598 $ 267,852,169
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
Three Months EndedMarch
31,
2019 2018 Revenues $ 49,513,237
$ 37,637,793 Operating costs and expenses: Sales and
marketing 7,840,866 7,047,993 Product development and content
31,123,375 22,101,537 General and administrative 4,927,782
5,469,178 Depreciation and amortization 3,198,104 3,629,603
Acquisition and restructuring 478,995 3,349,951 Total
operating costs and expenses 47,569,122 41,598,262
Income (loss) from operations 1,944,115 (3,960,469 ) Other
income (expense): Interest income 32,389 7,208 Interest expense
(402,864 ) (607,686 ) Gain (loss) on foreign currency transactions
(65,209 ) 103,043 Other 3,549 (6,944 ) Total other
expense (432,135 ) (504,379 ) Income (loss) before income
tax benefit (expense) 1,511,980 (4,464,848 ) Income tax benefit
(expense) (254,381 ) 252,187 Net income (loss) $ 1,257,599
$ (4,212,661 ) Basic and diluted net income (loss)
per common stockholder: Basic net income (loss) per common
stockholder $ 0.02 $ (0.06 ) Diluted net income (loss) per
common stockholder $ 0.02 $ (0.06 ) Weighted average
shares outstanding: Basic 74,848,080 71,981,487
Diluted 78,799,248 71,981,487
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
Three Months EndedMarch
31,
2019 2018 Cash flows from operating
activities: Net income (loss) $ 1,257,599 $ (4,212,661 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization 3,198,104
3,629,603 Amortization right-of-use assets 695,327 — Stock-based
compensation expense 2,424,717 2,168,925 Deferred taxes (146,956 )
(539,231 ) (Gain) loss on foreign currency transactions 65,209
(103,043 ) Bad debt expense 325,045 213,598 Amortization of loan
origination costs 38,040 86,527 Change in derivatives — — Change in
contingent consideration obligations 15,915 — Changes in operating
assets and liabilities: Accounts receivable 1,187,419 5,988,039
Prepaid expenses, other current assets and other assets (773,988 )
(793,908 ) Accounts payable and accrued liabilities (5,008,559 )
273,716 Deferred revenue 85,043 723,907
Net cash
provided by operating activities 3,362,915
7,435,472 Cash flows from investing
activities: Purchase of property and equipment (282,641 )
(172,642 ) Acquisition of business, net of cash and restricted cash
acquired (11,807,925 ) —
Net cash used in investing
activities (12,090,566 ) (172,642 )
Cash flows from financing activities: Proceeds from exercise
of stock options 680,989 — Payments of capital leases (40,885 )
(73,317 ) Proceeds from borrowings of debt 7,000,000 — Payments for
restricted stock awards withheld for taxes (89,383 ) (92,600 )
Payments on long-term debt (7,316,584 ) (3,750,000 )
Net cash
provided by (used in) financing activities 234,137
(3,915,917 ) Change in cash, cash equivalents,
and restricted cash prior to effects of foreign currency exchange
rate (8,493,514 ) 3,346,913 Effect of foreign currency exchange
rate (translation) (60,478 ) 69,548 Net increase (decrease)
in cash, cash equivalents, and restricted cash (8,553,992 )
3,416,461
Cash, cash equivalents, and restricted cash at
beginning of period 28,365,725 25,052,995
Cash, cash equivalents, and restricted cash at end of
period $ 19,811,733 $
28,469,456 Supplemental disclosure of cash flow
information: Cash paid for interest $ 361,303 $ 516,940
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF TOTAL REVENUE
(UNAUDITED)
Three Months Ended March 31,
2019 2018 $
% $ % User pay revenue $
35,825,109 72.4 % $ 22,405,530 59.5 % Advertising 13,688,128
27.6 % 15,232,263 40.5 % Total revenue $ 49,513,237
100.0 % $ 37,637,793 100.0 %
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO
ADJUSTED EBITDA
(UNAUDITED)
Three Months EndedMarch
31,
2019 2018 Net income (loss) $ 1,257,599
$ (4,212,661 ) Interest expense 402,864 607,686 Income tax
(benefit) expense 254,381 (252,187 ) Depreciation and amortization
3,198,104 3,629,603 Stock-based compensation expense 2,424,717
2,168,925 Acquisition and restructuring 478,995 3,349,951 (Gain)
loss on foreign currency transactions 65,209 (103,043 )
Adjusted EBITDA $ 8,081,869 $ 5,188,274 GAAP
basic net income (loss) per common stockholder $ 0.02 $
(0.06 ) GAAP diluted net income (loss) per common stockholder $
0.02 $ (0.06 ) Basic adjusted EBITDA per common stockholder
$ 0.11 $ 0.07 Diluted adjusted EBITDA per common
stockholder $ 0.10 $ 0.07 Weighted average
shares outstanding: Basic 74,848,080 71,981,487
Diluted 78,799,248 75,849,484
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME
(UNAUDITED)
Three Months EndedMarch
31,
2019 2018 GAAP Net income (loss) $
1,257,599 $ (4,212,661 ) Stock-based compensation expense
2,424,717 2,168,925 Amortization of intangibles 2,561,903 3,056,609
Income tax (benefit) expense 254,381 (252,187 ) Acquisition and
restructuring 478,995 3,349,951 Non-GAAP net income $
6,977,595 $ 4,110,637 GAAP basic net income
(loss) per common stockholder $ 0.02 $ (0.06 ) GAAP diluted
net income (loss) per common stockholder $ 0.02 $ (0.06 )
Basic Non-GAAP net income per common stockholder $ 0.09 $
0.06 Diluted Non-GAAP net income per common stockholder $
0.09 $ 0.05 Weighted average shares
outstanding: Basic 74,848,080 71,981,487 Diluted
78,799,248 75,849,484
Webcast and Conference Call Details
Management will host a webcast and conference call to discuss
first quarter and year end 2019 financial results today,
May 8, 2019 at 8:30 a.m. Eastern time. To access the call dial
866-572-9351 (US and Canada) or 703-736-7482 (International) and
when prompted provide the participant passcode 2494226 to the
operator. An audio replay will be available at 855-859-2056
domestically or 404-537-3406 internationally, using passcode
2494226 through May 15, 2019. 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 portfolio of mobile social
entertainment apps designed to meet the universal need for human
connection. We leverage a powerful live-streaming video platform,
empowering our global community to forge meaningful connections.
Our primary apps, MeetMe©, LOVOO©, Skout©, Tagged©, and Growlr®,
keep millions of mobile daily active users entertained and engaged
and originate untold numbers of casual chats, friendships, dates,
and marriages. Our apps, available on iPhone, iPad, and Android in
multiple languages, use innovative products and sophisticated data
science to let our users stream live video, send gifts, chat, and
share photos. The Meet Group has a diversified revenue mix
consisting of in-app purchases, subscription, and advertising, and
we have offices in New Hope, Philadelphia, San Francisco, Dresden,
and Berlin. For more information, visit themeetgroup.com, and
follow us on Facebook, Twitter or LinkedIn.
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 second quarter 2019 and full
year 2019 revenue and Adjusted EBITDA will be in the projected
outlook range, whether our strong progress in video will continue
as expected, whether we will continue to set new records in growing
video reveue on each of our apps, whether will complete the
integration of our Growlr app successfully, whether we will
continue to drive video growth, whether in the coming quarters we
will bring new features and interactive video formats including 1x1
live video, a levels system to further gamify our livestreams,
interactive games and shows, and if so whether they will contribute
to engagement and monetization as expected, whether we will drive
growth by executing on our product roadmap and enabling community
and connection for our users as expected, whether we will execute
on the video features and monetization projects in our roadmap as
expected, and whether will successfully deliver new products that
drive meaningful connections for our users. 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,” “outlook,” “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, 2018 filed with the SEC on March 8,
2019. 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, Skout and LOVOO. The Company defines Video
Daily Active User (vDAU) as a registered user of one of our
platforms who has logged in and visited the Live feature, either as
a broadcaster or viewer, on the day of measurement. The Company
defines Average Video Revenue per Daily Active User (vARPDAU) as
the average daily revenue per vDAU. The Company uses these user
metrics for financial and operational decision-making and as a
means to evaluate period-to-period comparisons. The Company
presents user metrics 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 its industry and because it believes
that these metrics provide useful information to investors
regarding the Company’s financial condition and results of
operations. There is no directly comparable U.S. generally accepted
accounting principles (GAAP) measure to vARPDAU provided in the
Company’s financial statements and therefore no reconciliation is
provided.
The Company uses Adjusted EBITDA and Non-GAAP Net Income, which
are not calculated and presented in accordance with 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 for these
historical non-GAAP financial measures to their directly comparable
GAAP financial measures. Information reconciling forward-looking
Adjusted EBITDA to GAAP financial measures is unavailable to the
Company without unreasonable effort. The Company is not able to
provide reconciliations of Adjusted EBITDA to GAAP financial
measures because certain items required for such reconciliations
are outside of the Company’s control and/or cannot be reasonably
predicted, such as the provision for income taxes. Preparation of
such reconciliations would require a forward-looking balance sheet,
statement of income and statement of cash flow, prepared in
accordance with GAAP, and such forward-looking financial statements
are unavailable to the Company without unreasonable effort. The
Company provides a range for its adjusted EBITDA outlook that it
believes will be achieved, however it cannot accurately predict all
the components of the Adjusted EBITDA calculation.
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,
changes in warrant obligations, nonrecurring acquisition,
restructuring or other expenses, gain or loss on disposal of
assets, gain or loss on foreign currency adjustment, and goodwill
and long-lived asset impairment charges, if any. 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 on
intangibles, non-recurring acquisition and restructuring costs,
goodwill and long-lived asset impairment charges 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20190508005402/en/
Investor Contact:Leslie Arenalarena@themeetgroup.com267 714 6418
Media Contact:Brandyn Bissingerbbissinger@themeetgroup.com267 446 7010
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