Quarterly revenue grows to a record $49.3
million, up over 26% year-over-year
- Revenue grew 26.2% year-over-year to a
record $49.3 million
- Gross profit grew 17.4% year-over-year
to $17.6 million
- Net loss of ($28.6) million, including
($22.7) million in non-cash impairment charges
- Net loss per share of ($0.55),
including ($0.44) per share in non-cash impairment charges
- Non-GAAP Adjusted EBITDA of ($1.5)
million
- Non-GAAP Adjusted EBITDA per share of
($0.03)
Tremor Video, Inc. (NYSE:TRMR), the premium video marketplace
elevating brand advertising effectiveness across all screens, today
announced financial results for the third quarter ended September
30, 2015.
“Our third quarter results reflect the return on our technology
investments, with growth driven by our programmatic platforms and
proprietary higher function products,” said Bill Day, Tremor Video
CEO. “As the premium video marketplace, we believe we are well
positioned to capitalize on the growing market opportunity that is
being driven by programmatic buying and brand performance.”
Q3 & YTD 2015 Financial Summary
Revenue: For the three months ended September 30, 2015,
revenue was $49.3 million compared to $39.0 million for the same
period one year ago, representing a 26.2% increase.
For the nine months ended September 30, 2015, revenue was $135.9
million compared to $117.6 million for the same period one year
ago, representing a 15.6% increase.
Gross Profit: For the three months ended September 30,
2015, gross profit was $17.6 million compared to $15.0 million for
the same period one year ago, representing a 17.4% increase.
For the nine months ended September 30, 2015, gross profit was
$51.8 million compared to $41.7 million for the same period one
year ago, representing a 24.1% increase.
Gross Margin: For the three months ended September 30,
2015, gross margin was 35.7% compared to 38.4% for the same period
one year ago.
For the nine months ended September 30, 2015, gross margin was
38.1% compared to 35.5% for the same period one year ago.
Non-Cash Impairment Charges: During the three months
ended September 30, 2015, as required under GAAP, the Company
performed an interim impairment test on its assets based on a
decrease in the Company’s market capitalization below the carrying
value of its assets. As a result of this test, the Company recorded
an estimated non-cash impairment charge of ($22.1) million related
to its goodwill and certain intangible assets. In addition, the
Company recorded a non-cash impairment charge of ($0.6) million
relating to certain property and equipment maintained at its former
headquarters.
Net Loss: For the three months ended September 30, 2015,
net loss was ($28.6) million, which includes ($22.7) million in
non-cash impairment charges. This is compared to a net loss of
($5.5) million for the same period one year ago when no impairment
charges were recorded.
For the nine months ended September 30, 2015, net loss was
($40.8) million, which includes ($22.7) million in non-cash
impairment charges. This is compared to a net loss of ($18.1)
million for the same period one year ago when no impairment charges
were recorded.
Adjusted EBITDA: For the three months ended September 30,
2015, Adjusted EBITDA, a non-GAAP financial measure, was ($1.5)
million compared to Adjusted EBITDA of ($2.3) million for the same
period one year ago.
For the nine months ended September 30, 2015, Adjusted EBITDA, a
non-GAAP financial measure, was ($6.8) million compared to Adjusted
EBITDA of ($9.2) million for the same period one year ago.
EPS: For the three months ended September 30, 2015, basic
and diluted net loss per share was ($0.55), which includes ($0.44)
per share in non-cash impairment charges. 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 51.9 million weighted average shares of
common stock for the three months ended September 30, 2015.
For the nine months ended September 30, 2015, basic and diluted
net loss per share was ($0.79), which includes ($0.44) per share in
non-cash impairment charges. Non-GAAP basic and diluted Adjusted
EBITDA per share was ($0.13). Basic and diluted net loss per share
and Non-GAAP basic and diluted Adjusted EBITDA per share are based
on 51.5 million weighted average shares of common stock for the
nine months ended September 30, 2015.
Business & Financial Highlights
For the three months ended September 30, 2015, revenue from our
programmatic platforms was $17.0 million, or 34.5% of total
revenue, compared to $3.8 million, or 9.7% of total revenue, for
the same period one year ago, an increase of 347.3%. For the nine
months ended September 30, 2015, revenue from our programmatic
platforms was $38.3 million, or 28.1% of total revenue, compared to
$8.1 million, or 6.9% of total revenue, for the same period one
year ago, an increase of 371.8%.
For the three months ended September 30, 2015, revenue from our
non-programmatic proprietary higher function products, which
includes our All-Screen and performance based products, was $22.4
million, or 45.4% of total revenue, compared to $17.0 million, or
43.6% of total revenue, for the same period one year ago, an
increase of 31.5%. For the nine months ended September 30, 2015,
revenue from our non-programmatic proprietary higher function
products was $62.1 million, or 45.7% of total revenue, compared to
$43.2 million, or 36.7% of total revenue, for the same period one
year ago, an increase of 43.9%.
For the three months ended September 30, 2015, revenue from our
non-programmatic media network business was $9.9 million, or 20.1%
of total revenue, compared to $18.2 million, or 46.7% of total
revenue, for the same period one year ago, a decrease of 45.8%. For
the nine months ended September 30, 2015 revenue attributable to
our non-programmatic media network business was $35.6 million, or
26.2% of total revenue, compared to $66.3 million, or 56.4% of
total revenue, for the same period one year ago, a decrease of
46.4%.
Guidance
Based on information available as of November 5, 2015, the
Company expects the following:
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 ($5.0)
million.
Q3 2015 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 19, 2015, a
domestic replay will be available at (877)870-5176 or
internationally at (858)384-5517, using passcode 13621969, 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 fourth 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; risks of entering
new markets in which we have limited or no experience and
difficulty adapting our solutions for new markets; 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 product 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 impact of
tools that block the display of 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 U.S. Securities and Exchange Commission, including its Annual
Report on Form 10-K for the year ended December 31, 2014 filed with
the U.S. Securities and Exchange Commission on March 16, 2015, its
Quarterly Report on Form 10-Q for the quarter ended March 31, 2015,
filed on May 11, 2015, its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2015, filed on August 10, 2015, and future
filings and reports by the company, including its Quarterly Report
on Form 10-Q for the quarter ended September 30, 2015.
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, non-cash impairment charges, litigation
costs associated with class action securities litigation, executive
severance costs, and acquisition related costs. 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,
December 31, 2015 2014 (unaudited)
Assets
Current assets: Cash and cash equivalents $ 65,531 $ 77,787
Accounts receivable, net 53,577 46,765 Prepaid expenses and other
current assets 2,378 1,571 Deferred tax assets 240
194 Total current assets 121,726
126,317 Long-term assets: Restricted cash 600 600 Property
and equipment, net 9,990 5,574 Intangible assets, net 12,635 15,552
Goodwill 10,080 29,719 Other assets 517 243
Total long-term assets 33,822 51,688
Total assets $ 155,548 $ 178,005
Liabilities and stockholders'
equity
Current liabilities: Accounts payable and accrued expenses $ 46,627
$ 37,258 Deferred rent and security deposits payable, short-term
412 20 Contingent consideration on acquisition, short-term 579 -
Deferred revenue 83 15 Total current
liabilities 47,701 37,293 Deferred rent, long-term 4,001 745
Contingent consideration on acquisition, long-term 377 - Deferred
tax liabilities 194 194 Other long-term liabilities 249
- Total liabilities 52,522
38,232 Stockholders' equity: Common stock 5 5
Additional paid-in capital 278,335 274,094 Accumulated other
comprehensive (loss) income (78 ) 98 Accumulated deficit
(175,236 ) (134,424 ) Total stockholders' equity
103,026 139,773 Total liabilities and
stockholders' equity $ 155,548 $ 178,005
Tremor Video, Inc. Consolidated Statements of
Operations (in thousands, except share and per share
data) (unaudited) Three Months
Ended Nine Months Ended September 30,
September 30, 2015 2014 2015
2014 Revenue $ 49,273 $ 39,039 $ 135,948 $
117,609 Cost of revenue 31,673 24,046
84,145 75,882 Gross profit
17,600 14,993 51,803
41,727 Operating expenses: Technology and
development(1) 5,147 4,270 14,869 12,583 Sales and marketing(1)
12,112 10,761 35,780 31,118 General and administrative(1) 4,034
3,724 13,083 11,037 Depreciation and amortization 2,322 1,673 6,055
4,902 Impairment charges 22,665 -
22,665 - Total operating expenses
46,280 20,428 92,452
59,640 Loss from operations (28,680 )
(5,435 ) (40,649 ) (17,913 ) Interest
and other income (expense), net: Interest expense (2 ) (3 ) (7 ) (3
) Other income (expense), net 79 8
102 (15 ) Total interest and other income
(expense), net 77 5 95
(18 ) Loss before provision for income taxes (28,603
) (5,430 ) (40,554 ) (17,931 ) Provision for income taxes 19
44 258 144 Net loss $ (28,622 ) $
(5,474 ) $ (40,812 ) $ (18,075 )
Net loss per share:
Basic and diluted $ (0.55 ) $ (0.11 ) $ (0.79 ) $ (0.36 )
Weighted-average number of shares of
common stockoutstanding:
Basic and diluted 51,875,785 50,751,303
51,515,285 50,485,734 (1)
Stock-based compensation expense included above:
Three
Months Ended Nine Months Ended September 30,
September 30, 2015 2014 2015
2014 Technology and development $ 209 $ 239 $ 641 $
653 Sales and marketing 376 342 1,179 1,063 General and
administrative 337 607 1,357
1,578 Total stock-based compensation expense $
922 $ 1,188 $ 3,177 $ 3,294
Tremor Video, Inc. Reconciliation of Non-GAAP
Financial Information (in thousands) (unaudited)
Three Months Ended Nine Months
Ended September 30, September 30, 2015
2014 2015 2014 Net loss $
(28,622 ) $ (5,474 ) $ (40,812 ) $ (18,075 ) Adjustments: Non-cash
impairment charges(1) 22,665 - 22,665 - Depreciation and
amortization expense 2,322 1,673 6,055 4,902 Stock-based
compensation expense 922 1,188 3,177 3,294 Executive severance 508
- 870 - Acquisition-related costs(2) 337 - 559 - Litigation
expenses 226 132 294 279 Stock-based long-term incentive
compensation expense 185 160 262 274 Provision for income taxes 19
44 258 144 Interest and other (income) expense, net (77 )
(5 ) (95 ) 18 Total net adjustments
27,107 3,192 34,045
8,911 Adjusted EBITDA $ (1,515 ) $ (2,282 ) $ (6,767
) $ (9,164 )
Tremor Video, Inc. Reconciliation of
Non-GAAP Financial Information - Per Share (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30, 2015 2014
2015 2014 Net loss $ (0.55 ) $ (0.11 ) $ (0.79
) $ (0.36 ) Adjustments: Non-cash impairment charges(1) 0.44 - 0.44
- Depreciation and amortization expense 0.04 0.03 0.12 0.10
Stock-based compensation expense 0.02 0.02 0.06 0.06 Executive
severance 0.01 - 0.02 - Acquisition-related costs(2) 0.01 - 0.01 -
Litigation expenses - 0.01 0.01 0.01 Stock-based long-term
incentive compensation expense - 0.01 - 0.01 Provision for income
taxes - - - - Interest and other (income) expense, net -
- - - Total net
adjustments 0.52 0.07 0.66
0.18 Adjusted EBITDA per share - basic and
diluted $ (0.03 ) $ (0.04 ) $ (0.13 ) $ (0.18 )
Weighted-average number of shares of
common stockoutstanding:
Basic and diluted 51,875,785 50,751,303
51,515,285 50,485,734
(1) During the three months ended September 30, 2015, based on a
decrease in the Company's market capitalization below the carrying
value of its net assets, the Company determined that an impairment
indicator was present. The Company performed an interim impairment
test on its assets and, based on such test, recorded a non-cash
goodwill impairment charge of $20.9 million and a non-cash
intangible asset impairment charge of $1.2 million for the three
and nine months ended September 30, 2015.
The amount of the non-cash goodwill impairment charge is based
on the Company's best current estimate. The Company has not yet
finalized measurement of the impairment, so it is possible that the
Company will need to adjust the amount of this charge upon the
completion of the measurement. The Company expects that any
adjustment would be recognized in the fourth quarter of 2015.
In addition to the goodwill and intangible asset impairment
charges described above, the Company recorded a non-cash impairment
charge of $0.6 million related to certain property and equipment at
its former headquarters.
(2) Reflects acquisition-related costs incurred in connection
with the Company’s acquisition of The Video Network Pty Ltd, an
Australian proprietary limited company (“TVN”). In connection with
the acquisition of TVN, the TVN sellers are eligible to receive
future cash payments over a term of two years contingent on the
operating performance of TVN in reaching certain financial
milestones in each of its 2016 and 2017 fiscal years. For certain
of the TVN sellers, the payment of this contingent cash
consideration is dependent upon continued employment through the
date of payment. As a result, the estimated fair value of the
contingent cash consideration relating to such TVN sellers are
record as compensation-related expenses. For the three and nine
months ended September 30, 2015, the Company recorded $169 for such
compensation-related expenses, which amount has been included as an
adjustment in the table above.
Tremor Video, Inc. Consolidated Statements of Cash
Flows (in thousands) (unaudited)
Nine Months Ended September 30, 2015
2014 Cash flows from operating activities: Net loss $
(40,812 ) $ (18,075 ) Adjustments required to reconcile net loss to
net cash used in operating activities: Impairment charges 22,665 -
Depreciation and amortization expense 6,055 4,902 Bad debt recovery
(8 ) (36 ) Stock-based compensation expense 3,177 3,294 Stock-based
long-term incentive compensation expense 262 274 Contingent stock
grant to third party vendor - 24 Net changes in operating assets
and liabilities: Increase in accounts receivable (5,476 ) (5,061 )
(Increase) decrease in prepaid expenses, other current assets and
other long-term assets (1,129 ) 292 Increase in accounts payable
and accrued expenses 8,009 2,039 Increase in deferred rent and
security deposits payable 3,763 7 Increase in deferred revenue
66 43 Net cash used in operating
activities (3,428 ) (12,297 ) Cash flows from
investing activities: Purchase of property and equipment (7,154 )
(2,617 ) Acquisition, net of cash acquired (1,191 ) -
Net cash used in investing activities (8,345 )
(2,617 ) Cash flows from financing activities: Proceeds from
the exercise of stock options awards 106 727 Tax withholdings
related to net share settlements of restricted stock unit awards
(RSUs) (463 ) (565 ) Net cash (used in) provided by
financing activities (357 ) 162 Net
decrease in cash and cash equivalents (12,130 ) (14,752 )
Effect of exchange rate changes in cash and cash equivalents (126 )
(30 ) Cash and cash equivalents at beginning of period
77,787 92,691 Cash and cash equivalents
at end of period $ 65,531 $ 77,909
Tremor Video, Inc. Consolidated Revenue by Quarter
(in thousands) (unaudited) Q1
2014 Q2 2014 Q3 2014 Q4
2014 FY 2014 Q1 2015
Q2 2015 Q3 2015 YTD 2015
Programmatic $ 1,562 $ 2,744 $ 3,805 $ 5,959 $ 14,070 $ 7,305 $
13,945 $ 17,019 $ 38,269 Non-programmatic higher function
(All-Screen/performance based) 10,106 16,043 17,015 21,137 64,301
19,669 20,084 22,372 62,125 Non-programmatic media network
23,201 24,914 18,219 14,782 81,116 13,629 12,043 9,882 35,554
Total revenue $ 34,869 $ 43,701 $ 39,039 $ 41,878 $ 159,487 $
40,603 $ 46,072 $ 49,273 $ 135,948
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151105006707/en/
Tremor Video, Inc.Investor Relations:Andrew PosenSenior Director
Investor Relations212-792-2315IR@TremorVideo.comorPublic
Relations:Mandy RobinsonTremor Video Corporate
Communications646-278-7416MRobinson@TremorVideo.com
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