Q3 2014 revenue grows 11%
- Revenue for the three months ended
September 30, 2014 grew 10.7% year-over-year to $39.0 million
- Revenue for the nine months ended
September 30, 2014 grew 23.2% year-over-year to $117.6 million
- Net loss of ($5.5) million; Non-GAAP
Adjusted EBITDA of ($2.3) million
- Net loss per share of ($0.11); Non-GAAP
Adjusted EBITDA per share of ($0.04)
Tremor Video, Inc. (NYSE:TRMR), an advertising technology
company elevating brand performance across all screens for the
world’s leading brands and publishers, today announced financial
results for the third quarter 2014.
“I am pleased with our results through three quarters, powered
by the growth of our premium managed service business and the early
traction of our self-service platform, furthering our programmatic
capabilities,” said Bill Day, President and CEO of Tremor Video.
“We saw outstanding adoption of our All-Screen
and performance based pricing products and recently
signed a significant agency for our DSP.”
Q3 & YTD 2014 Financial Summary
Revenue: For the three months ended September 30, 2014,
revenue was $39.0 million compared to $35.3 million for the three
months ended September 30, 2013, representing a 10.7% increase over
the same period one year ago.
For the nine months ended September 30, 2014, revenue was $117.6
million compared to $95.5 million for the nine months ended
September 30, 2013, representing a 23.2% increase over the same
period one year ago.
Gross Margin: For the three months ended September 30,
2014, gross margin was 38.4% compared to 40.3% for the same period
one year ago.
For the nine months ended September 30, 2014, gross margin was
35.5% compared to 43.6% for the same period one year ago.
Net Loss: For the three months ended September 30, 2014,
net loss was ($5.5) million compared to a net loss of ($2.2)
million for the same period one year ago.
For the nine months ended September 30, 2014, net loss was
($18.1) million compared to a net loss of ($7.7) million for the
same period one year ago.
Adjusted EBITDA: For the three months ended September 30,
2014, Adjusted EBITDA, a non-GAAP financial measure, was ($2.3)
million compared to Adjusted EBITDA of $0.1 million for the same
period one year ago.
For the nine months ended September 30, 2014, Adjusted EBITDA, a
non-GAAP financial measure, was ($9.2) million compared to Adjusted
EBITDA of ($0.6) million for the same period one year ago.
EPS: For the three months ended September 30, 2014, basic
and diluted net loss per share was ($0.11). Non-GAAP basic and
diluted Adjusted EBITDA per share was ($0.04). Basic and diluted
net loss per share and Non-GAAP basic and diluted Adjusted EBITDA
per share are based on 50.8 million weighted average shares of
common stock for the three months ended September 30, 2014.
For the nine months ended September 30, 2014, basic and diluted
net loss per share was ($0.36). Non-GAAP basic and diluted Adjusted
EBITDA per share was ($0.18). Basic and diluted net loss per share
and Non-GAAP basic and diluted Adjusted EBITDA per share are based
on 50.5 million weighted average shares of common stock for the
nine months ended September 30, 2014.
A description of the non-GAAP calculations and reconciliation to
comparable GAAP measures is provided in the accompanying tables
entitled “Reconciliation of Non-GAAP Financial Information” and
“Reconciliation of Non-GAAP Financial Information-Per Share.”
Business & Financial Highlights
As a percentage of total revenue, revenue attributable to
performance-based pricing for the three months ended September 30,
2014 was 28.4% compared to 26.1% for the same period one year ago
and for the nine months ended September 30, 2014 was 26.1% compared
to 31.5% for the same period one year ago.
As a percentage of total revenue, revenue attributable to our
All-Screen product for the three months ended September 30, 2014
was 33.0%. Our All-Screen product, which we introduced during the
second quarter, optimizes delivery of video ad campaigns across
screens, eliminating the need for advertisers to allocate campaign
budgets to a specific device.
Guidance
Based on information available as of November 6, 2014, the
Company reiterates its guidance for full year 2014 as follows:
Full year 2014 revenue is expected to be in the range of $158.0
million to $163.0 million and Adjusted EBITDA is expected to be in
the range of ($8.0) million to ($11.0) million.
Q3 2014 Financial Results Conference Call: Tremor Video
will host a conference call today at 4:30 p.m. ET to discuss its
third quarter financial results with the investment community. A
live webcast of the event will be available on the Tremor Video
Investor Relations website at http://investor.tremorvideo.com. A
live domestic dial-in is available at (877)407-9039 or
internationally at (201)689-8470. Until November 20, 2014, a
domestic replay will be available at (877)870-5176 or
internationally at (858)384-5517, using passcode 13592906, and via
webcast on the Tremor Video Investor Relations website.
About Tremor Video
Tremor Video (NYSE: TRMR) is transforming the video
advertising experience across all screens for the world’s
leading brands. Our proprietary
technology, VideoHub®, offers advertisers and publishers
a complete programmatic solution to reach and engage consumers
while providing new insights into what drives the success of brand
advertising performance across multiple devices. Tremor Video is
based in New York with offices throughout the U.S. and across the
globe. For more information,
visit tremorvideo.com and find Tremor Video
on Twitter, Facebook and LinkedIn.
"Safe harbor" Statement:
This press release contains forward-looking statements that
involve risks, uncertainties, assumptions and other factors that
could cause actual results and the timing of certain events to
differ materially from those set forth in or implied by such
forward-looking statements. All statements other than statements of
historical fact are forward-looking statements, including, but not
limited to, statements related to Tremor Video’s future financial
results or growth potential, including 2014 full year financial
guidance, and statements with respect to future revenue mix or the
development or adoption of the company’s solutions. Important
factors that could cause actual results or the timing of events to
differ materially from those set forth in or implied by any
forward-looking statements include, without limitation, risks and
uncertainties associated with: the company’s limited operating
history and the continuing development of its business model;
unfavorable conditions in the global economy or reductions in
digital advertising spend; the company’s ability to effectively
innovate and adapt to rapidly changing technology and client needs;
increased competition as well as innovations by new and existing
competitors; expansion of the online video advertising market; the
company’s ability to attract new advertisers and increase spend
from existing advertisers; the company’s ability to attract
advertising spend from TV media buyers; adoption of brand-centric
metrics, advanced ad formats and performance-based pricing models
by advertisers; the company’s ability to effectively deliver video
ad campaigns with demo guarantees; a delay in, or failure of
advertisers or publishers to adopt, the company’s programmatic
solutions, including its self-service platform; adoption of the
company’s all-screen buying solution by advertisers; the company’s
ability to acquire an adequate supply of premium video advertising
inventory from publishers on terms that are favorable to it; the
company’s ability to detect fraudulent or malicious activity and
ensure a high level of brand safety for its clients; identifying,
attracting and retaining qualified personnel; defects, errors or
interruptions in the company’s solutions; the company’s ability to
collect and use data to deliver video ads; the effect of regulatory
developments and industry standards regarding internet privacy and
other matters; maintaining, protecting and enhancing the company’s
intellectual property; costs associated with defending intellectual
property infringement, securities litigation and other claims;
future opportunities and plans, including the uncertainty of
expected future financial performance and results; as well as other
risks and uncertainties detailed from time-to-time under the
caption “Risk Factors” and elsewhere in Tremor Video’s filings with
the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the year ended December 31, 2013 filed with the
U.S. Securities and Exchange Commission on March 28, 2014, its
Quarterly Report on Form 10-Q for the three months ended March 31,
2014 filed with the U.S. Securities and Exchange Commission on May
15, 2014, its Quarterly Report on Form 10-Q for the six months
ended June 30, 2014 filed with the U.S. Securities and Exchange
Commission on August 14, 2014, and future filings and reports by
the company, including its Quarterly Report on Form 10-Q for the
quarter ended September 30, 2014.
Forward-looking statements are based on current expectations and
beliefs and are not guarantees of future performance or events.
Investors are cautioned not to place undue reliance on any
forward-looking statements. Furthermore, forward-looking statements
speak only as of the date on which they are made, and, except as
required by law, Tremor Video disclaims any obligation to update
these forward-looking statements to reflect future events or
circumstances.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are
prepared and presented in accordance with U.S. generally accepted
accounting principles (“GAAP”), Tremor Video reports Adjusted
EBITDA and basic and diluted Adjusted EBITDA per share which are
non-GAAP financial measures. We define Adjusted EBITDA as net loss
plus (minus): interest expense and other income (expense), net,
income tax expense, depreciation and amortization expense, non-cash
stock-based compensation expense, non-cash stock-based long-term
incentive compensation, and litigation costs associated with
pending class action securities litigation. We define Adjusted
EBITDA per share as Adjusted EBITDA divided by weighted average
common shares outstanding. We use these non-GAAP financial measures
for financial and operational decision making and as a means to
evaluate period-to-period comparisons. We believe that these
measures provide useful information about our operating results,
enhance the overall understanding of our past financial performance
and future prospects, and allow for greater transparency with
respect to key metrics used by management in its financial and
operational decision making. Non-GAAP financial measures should be
considered in addition to results and guidance prepared in
accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. The non-GAAP financial measures
included in this press release have been reconciled to the nearest
GAAP measure in the table following the financial statements
attached to this press release. With respect to our expectations
under “Guidance” above, reconciliation of Adjusted EBITDA guidance
to the closest corresponding GAAP measure is not available without
unreasonable efforts on a forward-looking basis due to the high
variability, complexity and low visibility with respect to the
charges excluded from these non-GAAP measures, in particular, the
measures and effects of stock-based compensation expense specific
to equity compensation awards that are directly impacted by
unpredictable fluctuations in our stock price. We expect the
variability of the above charges to have a significant, and
potentially unpredictable, impact on our future GAAP financial
results.
Tremor Video, Inc. Consolidated Balance Sheets (in
thousands) September 30, 2014 December
31, 2013 (unaudited) Assets Current
assets: Cash and cash equivalents $ 77,909 $ 92,691 Accounts
receivable, net 46,519 41,458 Prepaid expenses and other current
assets 1,614 1,912 Total current
assets 126,042 136,061 Long-term
assets: Restricted cash 600 600 Property and equipment, net 4,730
3,388 Intangible assets, net 16,760 20,387 Goodwill 29,719 29,719
Deferred tax assets 189 189 Other assets 249
216 Total long-term assets 52,247
54,499 Total assets $ 178,289 $
190,560
Liabilities and stockholders’ equity
Current liabilities: Accounts payable and accrued expenses $ 33,157
$ 32,312 Deferred rent and security deposits payable, short-term --
14 Deferred revenue 314 271 Deferred tax liabilities, short-term
189 189 Total current
liabilities 33,660 32,786 Deferred rent, long-term 763
742 Total liabilities 34,423
33,528 Stockholders’ equity: Common
stock 5 5 Additional paid-in capital 272,734 267,767 Accumulated
other comprehensive income 137 195 Accumulated deficit
(129,010 ) (110,935 ) Total stockholders’ equity
143,866 157,032 Total
liabilities and stockholders’ equity $ 178,289 $
190,560
Tremor Video, Inc. Consolidated
Statements of Operations (in thousands, except share and per
share data) Three Months
Ended Nine Months Ended September 30,
September 30, 2014
2013 2014
2013
(unaudited)
Revenue $ 39,039 $ 35,267 $ 117,609 $ 95,497 Cost of revenue
24,046 21,057 75,882
53,869 Gross profit 14,993
14,210 41,727
41,628 Operating expenses: Technology
and development(1) 4,270 2,833 12,583 8,348 Sales and marketing(1)
10,761 9,477 31,118 28,263 General and administrative(1) 3,724
2,681 11,037 8,069 Depreciation and amortization 1,673
1,581 4,902
4,576 Total operating expenses 20,428
16,572 59,640
49,256 Loss from operations (5,435 )
(2,362 ) (17,913 ) (7,628
) Interest and other income (expense), net: Interest
expense, net (3 ) (14 ) (3 ) (127 ) Other income (expense), net
8 153 (15 )
323 Total interest and other income (expense), net
5 139 (18 )
196 Loss before income taxes (5,430 ) (2,223 )
(17,931 ) (7,432 ) Income tax expense 44
20 144 243
Net loss (5,474 ) (2,243 ) (18,075 ) (7,675 ) Series F preferred
stock deemed dividend -- 15,849
-- 15,849 Net loss
attributable to common stockholders $ (5,474 ) $ (18,092 )
$ (18,075 ) $ (23,524 )
Net loss per
share: Basic and diluted $ (0.11 ) $ (0.05 ) $
(0.36 ) $ (0.35 )
Net loss attributable to common
stockholders per share:
Basic and diluted $ (0.11 ) $ (0.37 ) $ (0.36 )
$ (1.08 )
Weighted-average number of shares of
common stock outstanding:
Basic and diluted 50,751,303 49,115,766
50,485,734 21,686,759
(1) Stock-based compensation expense
included above:
Three Months Ended Nine Months Ended
September 30, September 30, 2014
2013 2014
2013
(unaudited)
Technology and development $ 239 $ 142 $ 653 $ 391 Sales and
marketing 342 317 1,063 883 General and administrative 607
459 1,578
1,145 Total stock-based compensation expense $ 1,188
$ 918 $ 3,294 $ 2,419
Tremor Video, Inc. Reconciliation of
Non-GAAP Financial Information (in thousands)
Three Months Ended Nine Months
Ended September 30, September 30,
2014 2013
2014 2013
(unaudited) Net loss $ (5,474 ) $ (2,243 ) $ (18,075 ) $
(7,675 ) Adjustments: Depreciation and amortization expense 1,673
1,581 4,902 4,576 Stock-based compensation expense 1,188 918 3,294
2,419 Stock-based long-term incentive compensation 160 -- 274 --
Interest and other (income) expense, net (5 ) (139 ) 18 (196 )
Income tax expense 44 20 144 243 Litigation costs 132
-- 279 --
Total net adjustments 3,192
2,380 8,911 7,042
Adjusted EBITDA $ (2,282 ) $ 137 $ (9,164 )
$ (633 )
Tremor Video, Inc. Reconciliation
of Non-GAAP Financial Information-Per Share
Three Months Ended Nine Months Ended
September 30, September 30, 2014
2013 2014
2013 (unaudited) Net loss
$ (0.11 ) $ (0.05 ) $ (0.36 ) $ (0.35 ) Adjustments: Depreciation
and amortization expense 0.03 0.03
0.10
0.21 Stock-based compensation expense 0.02 0.02 0.06 0.11
Stock-based long-term incentive compensation 0.01 -- 0.01 --
Interest and other (income) expense, net -- -- -- (0.01 ) Income
tax expense -- -- -- 0.01 Litigation costs 0.01
-- 0.01 --
Total net adjustments 0.07 0.05
0.18 0.32 Adjusted
EBITDA per share - basic $ (0.04 ) $ -- $
(0.18 ) $ (0.03 )
Weighted-average number of shares of
common stock outstanding:
Basic 50,751,303 49,115,766
50,485,734 21,686,759
Adjusted EBITDA per share – diluted $ (0.04 ) $ --
$ (0.18 ) $ (0.03 )
Weighted-average number of shares of
common stock outstanding:
Diluted 50,751,303 53,243,233
50,485,734 21,686,759
Tremor Video, Inc. Consolidated Statements of Cash
Flows (in thousands) Nine Months
Ended September 30, 2014
2013 (unaudited) Cash flows from
operating activities: Net loss $ (18,075 ) $ (7,675 ) Adjustments
required to reconcile net loss to net cash (used in) provided by
operating activities: Depreciation of property and equipment 1,275
919 Amortization of intangible assets 3,627 3,657 Bad debt recovery
(36 ) (26 ) Mark-to-market income -- (313 ) Contingent stock grant
to third party vendor 24 -- Stock-based compensation expense 3,294
2,419 Stock-based long-term incentive compensation 274 -- Net
changes in operating assets and liabilities: Increase in accounts
receivable (5,061 ) (3,376 ) Decrease (increase) in prepaid
expenses and other long-term assets 292 (835 ) Increase in accounts
payable and accrued expenses 2,039 8,998 Increase in deferred rent
and security deposits payable 7 119 Increase (decrease) in deferred
revenue 43 (16 ) Net cash (used in)
provided by operating activities (12,297 )
3,871 Cash flows from investing activities: Purchase
of property and equipment (2,617 ) (1,757 ) Changes in restricted
cash -- 621 Net cash used in
investing activities (2,617 ) (1,136 ) Cash flows from
financing activities: Net proceeds from common stock issuance --
66,598 Repayment of amount outstanding under credit facility --
(6,000 ) Proceeds from the exercise of stock options 727 492 Tax
withholdings related to net share settlements of restricted stock
units (565 ) -- Net cash provided by
financing activities 162 61,090
Net (decrease) increase in cash and cash equivalents (14,752
) 63,825 Effect of exchange rate changes in cash and cash
equivalents (30 ) (100 ) Cash and cash equivalents at
beginning of period 92,691 32,533
Cash and cash equivalents at end of period $ 77,909
$ 96,258
Supplemental disclosure of cash
flow activities: Cash paid for income taxes $ --
$ 147 Cash paid for interest expense $ 3 $ 127
Supplemental disclosure of non-cash financing
activities: Common stock issued in connection with the
conversion of preferred stock $ -- $ 162,657
Common stock issued in connection with the Series F preferred stock
deemed dividend $ -- $ 15,849 Reclassification
of liability warrants to equity warrants $ -- $ 790
Common stock issued for settlement of RSUs $ 952
$ --
Investor Relations:Andrew Posen, 212-792-2315Senior Director
Investor RelationsIR@TremorVideo.comorPublic Relations:Billy Kenny,
646-421-6217Tremor Video Corporate
CommunicationsBKenny@TremorVideo.com
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