|By Business Wire||
|August 13, 2014 04:06 PM EDT||
YuMe, Inc. (NYSE: YUME), a leading provider of digital video brand advertising solutions, today announced its financial results for the second quarter ended June 30, 2014. Financial highlights include:
- Revenue of $40.4 million, an increase of 18% from the second quarter of 2013 (Q2 2013);
- Gross margin of 48.8%, compared to 45.6% in Q2 2013;
- Adjusted EBITDA1 loss of $0.1 million, compared to adjusted EBITDA income of $0.7 million in Q2 2013;
- Net loss of $2.6 million, or $0.08 per diluted share, compared to $1.1 million, or $0.23 per diluted share, in Q2 2013;
- $67.9 million in cash, cash equivalents and marketable securities as of June 30, 2014.
“The second quarter completed a successful first half of the year, and included solid financial performance and our first agency trading desk relationship for our Video Reach programmatic offering,” said Jayant Kadambi, Chief Executive Officer of YuMe. “Given our strengths in brand safety, ad viewability and multi-screen campaigns, we remain confident in extending our leadership as a major digital video aggregation solution for TV brand advertisers.”
Customer highlights for the second quarter of 2014 include:
- 428 advertising customers, an increase of 42% from 301 in Q2 2013;
- Average revenue per advertising customer of $93,000, a decrease of 17% from $112,000 in Q2 2013.
Customer highlights for the twelve month period ended June 30, 2014, include:
- 719 advertising customers, an increase of 37% from 526 for the twelve month period ended June 30, 2013;
- Average revenue per advertising customer of $229,000, a decrease of 7% from $247,000 for the twelve month period ended June 30, 2013.
Today, the Company is providing the following estimates for its key financial measures for the third quarter and full year 2014:
|Q3 2014||FY 2014|
|Revenue||$43 - $45 million||$180 - $190 million|
|Adjusted EBITDA||$(3.0) - $(1.0) million||$0.0 - $4.0 million|
Conference Call and Webcast Information:
Senior management will host a conference call at 4:30 p.m. ET today to discuss the Company’s results. Investors may access the live call by dialing (877) 201-0168 or (647) 788-4901. A replay will be available through Wednesday, August 20 at (855) 859-2056 or (404) 537-3406. (Conference ID: 78389197). A live and archived Webcast of the call will be available at http://investors.yume.com.
YuMe is a trademark of YuMe, Inc. All other brands, products or service names are or may be trademarks or service marks of their respective owners.
This press release contains forward-looking statements, including those in management quotations and under the caption “Business Outlook”. In some cases, you can identify forward-looking statements by the words “may,” “will,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. All statements other than statements of historical fact are statements that could be forward-looking statements, including, but not limited to, statements about our growth strategy; our operating results, including revenue, gross margin, net loss and adjusted EBITDA; market trends; and quotations from management. These forward-looking statements are subject to risks and uncertainties, assumptions and other factors that could cause actual results and the timing of events to differ materially from future results that are expressed or implied in our forward-looking statements. Factors that could cause or contribute to such differences include our history of net losses and limited operating history, which make it difficult to evaluate our prospects, our fluctuating quarterly results of operations, and our dependence on a limited number of customers in a highly competitive industry. These and other risk factors are discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013 that has been filed with the U.S. Securities and Exchange Commission (the “SEC”), and in our future filings and reports with the SEC, including our Quarterly Report on Form 10-Q for the three months ended June 30, 2014. The forward-looking statements in this press release are based on information available to YuMe as of the date hereof, and YuMe assumes no obligation to update any forward-looking statements.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we report adjusted EBITDA, which is a non-GAAP financial measure. We calculate adjusted EBITDA as net income, excluding income taxes, interest, depreciation and amortization, and stock-based compensation. We believe that adjusted EBITDA provides useful information to investors in understanding our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information presented by other companies. Non-GAAP financial information should not be viewed as a substitute for, or superior to, financial information prepared in accordance with GAAP. Users of this non-GAAP financial information should consider the types of events and transactions for which adjustments have been made.
We have included adjusted EBITDA in this release because it is a key measure we use to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that adjusted EBITDA can provide a useful measure for period-to-period comparisons of our operating results because it excludes some expenses that may mask underlying trends.
In the table following the financial statements attached to this press release, the non-GAAP financial measures used in this press release are reconciled to the most directly comparable GAAP financial measures. With respect to adjusted EBITDA expectations provided under “Business Outlook” above, quantitative reconciliation to the most directly comparable GAAP financial measure is not feasible, because unpredictable fluctuations in our stock price makes it difficult to estimate accurately future stock-based compensation expenses that are excluded from these non-GAAP financial measures. We expect the variability of the above charges may have a significant and unpredictable impact on our future GAAP financial results.
1 Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income, adjusted to exclude income taxes, interest, depreciation and amortization, and stock-based compensation. We believe that adjusted EBITDA provides useful information to investors in understanding and evaluating our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information of other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income prepared in accordance with GAAP as a measure of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made.
CONDENSED CONSOLIDATED BALANCE SHEETS
|June 30, 2014||December 31, 2013|
|Cash and cash equivalents||$||38,631||$||42,626|
|Accounts receivable, net||49,747||65,493|
|Prepaid expenses and other current assets||2,510||2,572|
|Total current assets||113,352||117,986|
|Marketable securities – long-term||6,848||14,186|
|Property, equipment and software, net||8,343||6,610|
|Intangible assets, net||1,665||2,049|
|Deposits and other assets||343||362|
|Liabilities and stockholders’ equity|
|Accrued digital media property owner costs||11,869||17,359|
|Deferred revenue, current||391||314|
|Capital leases, current||152||359|
|Total current liabilities||30,471||38,488|
|Capital leases, non-current||1||22|
|Other long-term liabilities||131||139|
|Deferred tax liability||637||773|
|Accumulated other comprehensive loss||(79||)||(80||)|
|Total stockholders’ equity||103,505||105,965|
|Total liabilities and stockholders’ equity||$||134,745||$||145,387|
(1) The condensed consolidated balance sheet as of December 31, 2013 was derived from audited financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
Six Months Ended
|Cost of revenue(1)||20,677||18,658||40,861||33,211|
|Sales and marketing(1)||15,854||10,893||31,320||21,110|
|Research and development(1)||1,509||917||2,445||1,917|
|General and administrative(1)||4,675||4,730||10,297||8,668|
|Total operating expenses||22,038||16,540||44,062||31,695|
|Loss from operations||(2,329||)||(878||)||(7,245||)||(3,974||)|
|Interest and other expense, net||
|Interest expense, net||(3||)||(13||)||(6||)||(32||)|
|Other expense, net||(168||)||(134||)||(186||)||(326||)|
|Total interest and other expense, net||(171||)||(147||)||(192||)||(358||)|
|Loss before income taxes||(2,500||)||(1,025||)||(7,437||)||(4,332||)|
|Income tax provision||60||68||192||99|
|Net loss per share:|
|Weighted-average shares used to compute net loss per share:|
(1) Stock-based compensation included above:
Three Months Ended June 30,
Six Months Ended June 30,
|Cost of revenue||$||84||$||31||$||147||$||61|
|Sales and marketing||664||342||1,228||683|
|Research and development||146||67||193||137|
|General and administrative||429||251||916||455|
|Total stock-based compensation||$||1,323||$||691||$||2,484||$||1,336|
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
|Three Months Ended June 30,||Six Months Ended June 30,|
|Income tax provision||60||68||192||99|
|Depreciation and amortization expense||1,111||1,024||2,210||2,050|
|Stock-based compensation expense||1,323||691||2,484||1,336|