Full Year 2014 revenue grows 21%
For the full year:
- Total revenue grew 21.0% year-over-year
to $159.5 million
- Net loss of ($23.5) million; Non-GAAP
Adjusted EBITDA of ($10.9) million
- Net loss per share of ($0.46); Non-GAAP
Adjusted EBITDA per share of ($0.22)
For the fourth quarter:
- Total revenue grew 15.4% year-over-year
to $41.9 million
- Net loss of ($5.4) million; Non-GAAP
Adjusted EBITDA of ($1.8) million
- Net loss per share of ($0.11); Non-GAAP
Adjusted EBITDA per share of ($0.03)
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 fourth quarter and full year ended December 31,
2014.
“Our results clearly demonstrate the progress we have made in
creating a premium video marketplace that connects buyers and
sellers seeking brand advertising effectiveness,” said Bill Day,
President and CEO of Tremor Video. “I believe the momentum in our
programmatic business, as well as the increasing adoption of
All-Screen and performance based products validates the technology
investments that we made in 2014 and sets us up for continued
success in 2015.”
Full Year 2014 Financial Summary
Revenue: For the full year 2014, revenue was $159.5
million compared to $131.8 million for the full year 2013,
representing a 21.0% increase over the same period one year
ago.
Gross Margin: For the full year 2014, gross margin was
36.2% compared to 40.9% for the full year 2013.
Net Loss: For the full year 2014, net loss was ($23.5)
million compared to a net loss of ($13.5) million for the full year
2013.
Adjusted EBITDA: For the full year 2014, Adjusted EBITDA,
a non-GAAP financial measure, was ($10.9) million compared to
Adjusted EBITDA of ($2.1) million for the full year 2013.
EPS: For the full year 2014, basic and diluted net loss
per share was ($0.46). Non-GAAP basic and diluted Adjusted EBITDA
per share was ($0.22). Basic and diluted net loss per share and
Non-GAAP basic and diluted Adjusted EBITDA per share are based on
50.6 million weighted average shares of common stock for the year
ended December 31, 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.”
Q4 2014 Financial Summary
Revenue: For the three months ended December 31, 2014,
revenue was $41.9 million compared to $36.3 million for the three
months ended December 31, 2013, representing a 15.4% increase over
the same period one year ago.
Gross Margin: For the three months ended December 31,
2014, gross margin was 38.4% compared to 33.7% for the same period
one year ago.
Net Loss: For the three months ended December 31, 2014,
net loss was ($5.4) million compared to a net loss of ($5.8)
million for the same period one year ago.
Adjusted EBITDA: For the three months ended December 31,
2014, Adjusted EBITDA, a non-GAAP financial measure, was ($1.8)
million compared to Adjusted EBITDA of ($1.5) million for the same
period one year ago.
EPS: For the three months ended December 31, 2014, basic
and diluted net loss per share was ($0.11). Non-GAAP basic and
diluted Adjusted EBITDA per share was ($0.03). Basic and diluted
net loss per share and Non-GAAP basic and diluted Adjusted EBITDA
per share are based on 51.1 million weighted average shares of
common stock for the three months ended December 31, 2014.
Business & Financial Highlights
As a percentage of total revenue, revenue attributable to
performance-based pricing for the three months ended December 31,
2014 was 31.7% compared to 25.4% for the same period one year ago
and for the full year 2014 was 27.6% compared to 29.8% 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 December 31, 2014 was
40.3% and for the full year 2014 was 26.6%. Our All-Screen product,
which we introduced during the second quarter of 2014, 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 February 19, 2015, the
Company expects the following:
Q1 2015: First quarter revenue is expected to be in the
range of $39.0 million to $41.0 million and Adjusted EBITDA is
expected to be in the range of ($6.0) million to ($5.0)
million.
Full Year 2015: Full year 2015 revenue is expected to be
in the range of $195.0 million to $200.0 million and Adjusted
EBITDA is expected to be in the range of ($7.0) million to ($3.0)
million.
Q4 and Full Year 2014 Financial Results Conference Call:
Tremor Video will host a conference call today at 4:30 p.m. ET to
discuss its fourth quarter and full year 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 March 5, 2015, a domestic replay will be available at
(877)870-5176 or internationally at (858)384-5517, using passcode
13599015, and via webcast on the Tremor Video Investor Relations
website.
About Tremor Video
Tremor Video (NYSE:TRMR) helps make every advertising moment
more relevant for consumers. The company’s heritage as custodians
of the most recognized advertiser and publisher brands is
built on leadership in all-screen analytics and a long-standing
commitment to transparency. Our premium video marketplace offers
the full spectrum of video ad products and services, including
premium programmatic buying and selling and analytics that connect
the two.
"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 first quarter 2015 and 2015
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; adoption of the
company’s programmatic solutions by advertisers and publishers;
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, its Quarterly Report on Form 10-Q for the nine months ended
September 30, 2014 filed with the U.S. Securities and Exchange
Commission on November 14, 2014, and future filings and reports by
the company, including its Annual Report on Form 10-K for the year
ended December 31, 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 (benefit), 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)
December 31, 2014 2013 Assets
Current assets: Cash and cash equivalents $ 77,787 $ 92,691
Accounts receivable, net 46,765 41,458 Prepaid expenses and other
current assets 1,571 1,912 Deferred tax assets, short-term
194 - Total current assets 126,317
136,061 Long-term assets: Restricted cash 600
600 Property and equipment, net 5,574 3,388 Intangible assets, net
15,552 20,387 Goodwill 29,719 29,719 Deferred tax assets, long-term
- 189 Other assets 243 216 Total
long-term assets 51,688 54,499 Total
assets $ 178,005 $ 190,560
Liabilities and
stockholders' equity Current liabilities: Accounts payable and
accrued expenses $ 37,258 $ 32,312 Deferred rent and security
deposits payable, short-term 20 14 Deferred revenue 15 271 Deferred
tax liabilities, short-term - 189 Total
current liabilities 37,293 32,786 Deferred rent, long-term 745 742
Deferred tax liabilities, long-term 194 -
Total liabilities 38,232 33,528
Stockholders' equity: Common stock 5 5 Additional paid-in capital
274,094 267,767 Accumulated other comprehensive income 98 195
Accumulated deficit (134,424 ) (110,935 ) Total
stockholders' equity 139,773 157,032
Total liabilities and stockholders' equity $ 178,005 $
190,560
Tremor Video, Inc.
Consolidated Statements of Operations (in thousands,
except share and per share data)
Three Months Ended Years Ended December 31,
December 31, 2014 2013 2014 2013
(unaudited) Revenue $ 41,878 $ 36,299 $ 159,487 $
131,796 Cost of revenue 25,791 24,056
101,673 77,925 Gross profit
16,087 12,243 57,814
53,871 Operating expenses: Technology and
development(1) 4,409 3,289 16,992 11,637 Sales and marketing(1)
11,505 10,233 42,623 38,496 General and administrative(1) 3,675
2,881 14,712 10,950 Depreciation and amortization 1,773
1,734 6,675 6,310
Total operating expenses 21,362 18,137
81,002 67,393 Loss from
operations (5,275 ) (5,894 ) (23,188 )
(13,522 ) Interest and other (expense) income, net: Interest
expense, net (1 ) - (4 ) (127 ) Other income, net 61
16 46 339 Total interest
and other income, net 60 16 42
212 Loss before income tax (benefit)
(5,215 ) (5,878 ) (23,146 ) (13,310 ) Income tax (benefit)
199 (37 ) 343 206 Net
loss (5,414 ) (5,841 ) (23,489 ) (13,516 ) Series F preferred stock
deemed dividend - - -
15,849 Net loss attributable to common stockholders $
(5,414 ) $ (5,841 ) $ (23,489 ) $ (29,365 )
Net loss per
share: Basic and diluted $ (0.11 ) $ (0.12 ) $ (0.46 ) $ (0.47
)
Weighted-average number of shares of common stock
outstanding: Basic and diluted 51,088,012
49,755,820 50,637,541 28,761,700
(1) Stock-based
compensation expense included above:
Three Months
Ended Years Ended December 31, December
31, 2014 2013 2014 2013
(unaudited) Technology and development $ 254 $ 158 $
907 $ 549 Sales and marketing 443 305 1,506 1,188 General and
administrative 631 522 2,209
1,667 Total stock-based compensation expense $
1,328 $ 985 $ 4,622 $ 3,404
Tremor Video, Inc. Reconciliation of Non-GAAP
Financial Information (in thousands)
Three Months Ended Years Ended
December 31, December 31, 2014 2013
2014 2013 (unaudited) Net loss $ (5,414
) $ (5,841 ) $ (23,489 ) $ (13,516 ) Adjustments: Depreciation and
amortization expense 1,773 1,734 6,675 6,310 Stock-based
compensation expense 1,328 985 4,622 3,404 Stock-based long-term
incentive compensation 399 1,614 673 1,614 Interest and other
income, net (60 ) (16 ) (42 ) (212 ) Income tax (benefit) 199 (37 )
343 206 Litigation costs - 82
279 82 Total net adjustments 3,639
4,362 12,550 11,404
Adjusted EBITDA $ (1,775 ) $ (1,479 ) $ (10,939 ) $ (2,112 )
Tremor Video, Inc. Reconciliation of
Non-GAAP Financial Information - Per Share Three
Months Ended Years Ended December 31, December
31, 2014 2013 2014 2013
(unaudited) Net loss $ (0.11 ) $ (0.12 ) $ (0.46 ) $
(0.47 ) Adjustments: Depreciation and amortization expense 0.04
0.04 0.13 0.22 Stock-based compensation expense 0.03 0.02 0.09 0.12
Stock-based long-term incentive compensation 0.01 0.03 0.01 0.06
Interest and other income, net - - - (0.01 ) Income tax (benefit) -
- 0.01 0.01 Litigation costs - -
- - Total net adjustments 0.08
0.09 0.24 0.40 Adjusted
EBITDA per share - basic $ (0.03 ) $ (0.03 ) $ (0.22 ) $ (0.07 )
Weighted-average number of shares of common stock
outstanding: Basic 51,088,012 49,755,820
50,637,541 28,761,700
Adjusted EBITDA per share - diluted $ (0.03 ) $ (0.03 ) $ (0.22 ) $
(0.07 )
Weighted-average number of shares of common stock
outstanding: Diluted 51,088,012 49,755,820
50,637,541 28,761,700
Tremor Video, Inc. Consolidated Statements of Cash
Flows (in thousands)
Years Ended December 31, 2014 2013
Cash flows from operating activities: Net loss $ (23,489 ) $
(13,516 ) Adjustments required to reconcile net loss to net cash
(used in) provided by operating activities: Depreciation and
amortization expense 6,675 6,310 Bad debt (recovery) expense (16 )
(19 ) Mark-to-market income (6 ) (313 ) Stock-based compensation
expense 4,622 3,404 Stock-based long-term incentive compensation
673 1,614 Net changes in operating assets and liabilities: Increase
in accounts receivable (5,394 ) (5,428 ) Decrease (increase) in
prepaid expenses and other long-term assets 299 (964 ) Increase in
accounts payable and accrued expenses 5,899 9,604 Increase in
deferred rent and security deposits payable 9 129 (Decrease)
increase in deferred revenue (256 ) 61 Net
cash (used in) provided by operating activities (10,984 )
882 Cash flows from investing activities:
Purchase of property and equipment (4,026 ) (2,705 ) Changes in
restricted cash - 621 Net cash used in
investing activities (4,026 ) (2,084 ) 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 767
912 Tax withholdings related to net share settlements of restricted
stock units (565 ) - Net cash provided by
financing activities 202 61,510
Net (decrease) increase in cash and cash equivalents (14,808 )
60,308 Effect of exchange rate changes in cash and cash
equivalents (96 ) (150 ) Cash and cash equivalents at
beginning of period 92,691 32,533 Cash
and cash equivalents at end of period
$
77,787
$
92,691
Supplemental disclosure of cash flow
activities: Cash paid for income taxes $ - $ 308
Cash paid for interest expense $ 5 $ 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 $ 953 $ -
Tremor Video, Inc.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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