TUBEMOGUL INC - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - 8-K - TUBEMOGUL INC	tube-8k_20160229.htm

Exhibit 99.1

TubeMogul Reports Record Financial Results for Fourth Quarter and Full Year 2015

Total Spend, Revenue and Gross Proft Grew More Than 50% Year Over Year for the Full Year 2015

EMERYVILLE, California – February 29, 2016 – TubeMogul, Inc. (NASDAQ: TUBE), a leading enterprise software company for brand advertising, today reported financial results for its fourth quarter and fiscal year ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights:

Total Spend¹ was $134.5 million, an increase of 63% compared to $82.6 million in the fourth quarter of 2014.

Revenue was $58.5 million, an increase of 62% compared to $36.1 million in the fourth quarter of 2014.

Gross profit was $39.2 million, an increase of 52% compared to $25.7 million in the fourth quarter of 2014.

Operating loss was $(0.7) million, compared to operating loss of $(2.4) million in the fourth quarter of 2014.

Net loss was $(1.5) million, compared to net loss of $(4.0) million in the fourth quarter of 2014.

Adjusted EBITDA² was $3.7 million, compared to Adjusted EBITDA of $(0.5) million in the fourth quarter of 2014.

Fiscal Year 2015 Financial Highlights:

Total Spend was $414.2 million, an increase of 63% compared to $254.3 million in 2014.

Revenue was $180.7 million, an increase of 58% compared to $114.2 million in 2014.

Gross profit was $122.5 million, an increase of 53% compared to $80.3 million in 2014.

Operating loss was $(10.8) million, compared to operating loss of $(1.6) million in 2014.

Net loss was $(13.7) million, compared to net loss of $(4.4) million in 2014.

Adjusted EBITDA was $3.4 million, compared to Adjusted EBITDA of $2.6 million in 2014.

¹ Total Spend is a non-GAAP financial measure. Please see the discussion below under the heading “Use of Non-GAAP Measures” and the reconciliation at the end of this release.

²Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion below under the heading “Use of Non-GAAP Measures” and the reconciliation at the end of this release.

“We finished 2015 with strong financial results overall, but more importantly our continuous innovation sets us up for another successful year in 2016,” said Brett Wilson, CEO of TubeMogul. “PTV accounted for over 10% of Total Spend in Q4 2015 and we expect it to be a larger percentage of our mix this year. In addition, our top ranking for Current Offering in the Forrester WaveÔ: Video Advertising Demand-Side Platforms for Q4 2015 has already created new sales opportunities and we expect it to continue to do so.”

Fourth Quarter, Full Year and Recent Business Highlights include:

Recognized by Forrester as a Leader among video advertising demand-side platforms: TubeMogul received the highest ranking in the “Current Offering” category in The Forrester Wave™: Video Advertising Demand-Side Platforms, Q4 2015 evaluation, scoring 4.55 out of 5. TubeMogul also received the highest scores in “Planning Capabilities,” achieving 4.60 out of 5, and 5 out of 5 in both “TV Campaign Extension” and “Client Satisfaction” categories.

Strong growth in annual cohort metrics: Generated 82% of Platform Direct Spend in 2015 from clients who first spent in previous years, demonstrating the increasing predictability and leverage of our operating model.

Growth in cross-screen spend: Spend in non-desktop pre-roll collectively grew over 550% year over year, accounting for 37% of Total Spend in Q4. In Q4 82% of Platform Services campaigns included at least two screens.

Positive client trends:

Expedia.com announced in AdExchanger that they would use TubeMogul's cross-screen planner to "create TV extension plans in real-time," bridging the gap between linear TV and digital devices.

Diageo Canada committed to spending 50% of their overall digital spend through TubeMogul's platform.

The Prosper Group, an integrated digital campaign and political marketing firm, named TubeMogul as its partner for video advertising for the 2016 campaign election cycle.

Medicx Media Solutions, a data-driven addressable media agency in the pharmaceutical and healthcare markets, named TubeMogul its preferred partner for video advertising.

Continuing to build out our executive team with strategic hires:

Jeffery Zheng, appointed as Managing Director of Greater China. He previously held senior positions with Ogilvy & Mather, Yahoo!, and Renren, in Taiwan and China.

Darin Williams, appointed as Managing Director of Southeast Asia. Darin has been based in Asia for more than fifteen years in executive roles at Nielsen, LinkedIn and Facebook.

Tim Murray, appointed as Vice President of Media, North America. Tim brings over 12 years of media and technology sales experience to TubeMogul’s sales team and was most recently RVP Sales and Client Development for the Western region at Rubicon Project, where he led programmatic sales and client strategy.

Erika Lamoreaux, appointed as Strategic Account Director. Erika has over eight years of experience in online marketing and digital strategy and was most recently Associate Director of Digital Media at The Clorox Company, where she oversaw search, display, video and mobile digital media for all Clorox brands.

Forward Outlook:

The Company is issuing Q1 and 2016 guidance as follows:

First Quarter 2016

Total Spend in the range of $108 million to $110 million

Revenue in the range of $40 million to $42 million

Gross profit in the range of $28 million to $30 million

Adjusted EBITDA in the range of $(5) million to $(3) million

Full Year 2016

Total Spend in the range of $569 million to $577 million

Revenue in the range of $220 million to $228 million

Gross profit in the range of $152 million to $160 million

Adjusted EBITDA of $5 million

Conference Call and Webcast Information

TubeMogul management will host a conference call and live webcast for analysts and investors today at 2 p.m. Pacific Time (5 p.m. Eastern Time) to discuss the Company’s financial results. To listen to the live conference call, please dial (719) 325-2298 or toll free (888) 554-1432, access code 7791416, approximately 15 minutes prior to the start of the call. A live and archived webcast of the conference call will be accessible on the “Events & Presentations” section of the Company’s website at http://investor.tubemogul.com. A telephonic replay of the conference call will be available two hours after the call, will run until March 10, 2016, and may be accessed by dialing (719) 457-0820 or (888) 203-1112 and entering the passcode 7791416.

TubeMogul has used, and intends to continue to use, its Investor Relations website (http://investor.tubemogul.com), as well as certain blogs http://www.tubemogul.com/company/media-center/blog/ and Twitter accounts @tubemogul and @bjwilson34, as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About TubeMogul

TubeMogul (NASDAQ: TUBE) is an enterprise software company for brand advertising. By reducing complexity, improving transparency and leveraging real-time data, our platform enables advertisers to gain greater control of their global advertising spend and achieve their brand advertising objectives. TubeMogul was incorporated in 2007 and is based in Emeryville, California with operations in Kyiv, London, Mexico City, New York, Paris, Sao Paulo, Shanghai, Singapore, Sydney, Tokyo, Toronto and offices across the United States.

TubeMogul and the TubeMogul logo are trademarks or registered trademarks of TubeMogul, Inc. in the United States and other countries.

Forward-Looking Statements

This press release includes “forward-looking statements” regarding future events and our future financial performance, including, without limitation, statements regarding our business strategy, growth and market opportunity, our expansion into Programmatic TV and the ability to continue to drive increasing spend across our software from the largest brand advertisers, and forecasted financial results and operating metrics including Total Spend, revenue, gross profit and Adjusted EBITDA.

These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements, including, but not limited to our limited operating history, particularly as a new public company; risks associated with our growth; risks related to our future financial performance; our ability to maintain our rate of revenue growth; our ability to convince our clients to maintain or increase their advertising spend through our platform; the expansion of the market for software-based advertising solutions for brands, including Programmatic TV, our ability to adapt to changing market conditions; the effects of increased competition in our markets and our ability to compete effectively; our potential dependence on a limited number of customers for a large portion of our revenue; our ability to develop and introduce enhancements and new features and functionality of our platform that achieve market acceptance; fluctuations in our operating results; and general market, political, economic and business conditions. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are described under “Risk Factors” in our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed with the Securities and Exchange Commission. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2015. These forward-looking statements are made as of the date of this press release, and we expressly disclaim any obligation or undertaking to update the forward-looking statements contained herein to reflect events that occur or circumstances that exist after the date on which the statements were made.

TUBEMOGUL, INC.
Preliminary Consolidated Statements of Operations
(In thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
	(Unaudited)						(Unaudited)
Revenue:
Platform Direct	$	22,187		$	16,302		$	72,212		$	49,231
Platform Services		36,268			19,780			108,484			65,012
Total revenue		58,455			36,082			180,696			114,243
Cost of revenue		19,246			10,363			58,193			33,941
Gross profit		39,209			25,719			122,503			80,302
Operating expenses:
Research and development		11,804			8,107			41,007			22,142
Sales and marketing		17,256			13,136			55,331			38,133
General and administrative		10,827			6,890			37,000			21,615
Total operating expenses		39,887			28,133			133,338			81,890
Loss from operations		(678	)		(2,414	)		(10,835	)		(1,588	)
Other (expense) income, net:
Loss on extinguishment of convertible notes		—			(538	)		—			(538	)
Interest income (expense), net		20			(33	)		(37	)		(216	)
Change in fair value of convertible preferred stock warrant liability		—			—			—			168
Foreign exchange loss, net		(436	)		(977	)		(2,196	)		(1,987	)
Other expense, net		(416	)		(1,548	)		(2,233	)		(2,573	)
Net loss before income taxes		(1,094	)		(3,962	)		(13,068	)		(4,161	)
Provision for income taxes		(406	)		(82	)		(663	)		(283	)
Net loss	$	(1,500	)	$	(4,044	)	$	(13,731	)	$	(4,444	)
Basic and diluted net loss per share attributable to common stockholders	$	(0.04	)	$	(0.14	)	$	(0.42	)	$	(0.22	)
Basic and diluted weighted-average shares used to compute net loss per share attributable to common stockholders		35,161			29,816			32,736			19,928

TUBEMOGUL, INC.
Preliminary Consolidated Balance Sheets
(In thousands, except per share data)

	December 31,			December 31,
	2015			2014
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	83,439		$	46,592
Accounts receivable, net		159,899			88,457
Prepaid expenses and other current assets		3,752			2,322
Total current assets		247,090			137,371
Property, equipment and software, net		8,585			3,902
Restricted cash		1,563			742
Other assets		1,495			692
Total assets	$	258,733		$	142,707
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	47,346		$	19,087
Accrued liabilities		74,927			50,714
Revolving line of credit		2,050		—
Current portion of notes payable, net of discount		848			1,362
Deferred revenue		853			302
Total current liabilities		126,024			71,465
Deferred rent		746			601
Note payable, net of current portion		1,787		—
Total liabilities		128,557			72,066
Stockholders’ equity:
Preferred stock; $0.001 par value; 10,000 shares authorized and 0 outstanding as of December 31, 2015 and December 31, 2014	—			—
Common stock; $0.001 par value; 200,000 shares authorized as of December 31, 2015 and December 31, 2014; 35,344 and 29,838 shares issued and outstanding as of December 31, 2015 and December 31, 2014 respectively		35			30
Additional paid-in capital		167,316			94,013
Accumulated deficit		(37,016	)		(23,285	)
Accumulated other comprehensive loss		(159	)		(117	)
Total stockholders’ equity		130,176			70,641
Total liabilities and stockholders’ equity	$	258,733		$	142,707

TUBEMOGUL, INC.
Preliminary Consolidated Statements of Cash Flows
(In thousands)
	Twelve Months Ended
	December 31,
	2015			2014			2013
	(Unaudited)
Cash flows from operating activities:
Net loss	$	(13,731	)	$	(4,444	)	$	(7,411	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,408			864			322
Gain on change in value of convertible preferred stock warrant liability		—			(168	)		388
Provision for doubtful accounts		1,287			903			539
Provision for credit memos		3,244			1,875			—
Stock-based compensation expense		12,563			3,543			761
Other gains (losses), net		—			(11	)		6
Loss on extinguishment of convertible notes		—			538			—
Changes in operating assets and liabilities:
Accounts receivable		(75,973	)		(44,315	)		(24,341	)
Prepaid expenses and other current assets		(1,430	)		(902	)		(1,100	)
Payments of costs related to initial public offering		—			(3,349	)		(129	)
Other assets		(1,079	)		126			(192	)
Accounts payable		27,044			15,055			(637	)
Accrued liabilities		24,500			16,024			23,423
Deferred rent		145			504			55
Deferred revenue		551			(165	)		162
Net cash used in operating activities		(20,471	)		(13,922	)		(8,154	)
Cash flows from investing activities:
Increase in restricted cash		(821	)		(408	)		(334	)
Purchases of property, equipment and software		(5,876	)		(3,299	)		(1,439	)
Net cash used in investing activities		(6,697	)		(3,707	)		(1,773	)
Cash flows from financing activities:
Proceeds from public offering of common stock, net of underwriting discounts, commission and offering costs		58,333			46,791			—
Proceeds from issuance of Series C preferred stock, net of issuance cost		—			—			10,913
Proceeds from note payable		2,635			—			—
Repayment of note payable		(1,362	)		(1,417	)		(1,351	)
Proceeds from line of credit		2,050			11,800			100
Repayment of line of credit		—			(11,800	)		(100	)
Repayment of convertible note		—			(957	)		—
Proceeds from issuances of common stock from options exercised, convertible note exercised and under ESPP		2,401			379			212
Excess tax benefit		—			24			—
Net cash provided by financing activities		64,057			44,820			9,774
Effect of exchange rate changes on cash and cash equivalents		(42	)		(74	)		(42	)
Net increase in cash and cash equivalents		36,847			27,117			(195	)
Cash and cash equivalents, beginning of year		46,592			19,475			19,670
Cash and cash equivalents, end of year	$	83,439		$	46,592		$	19,475
Supplemental disclosures:
Cash paid for income taxes	$	348		$	97		$	1
Cash paid for interest		108			226			170
Equipment purchased and unpaid at period end		1,215			—			—
Conversion of preferred stock warrants to common stock warrants		—			516			—
Cashless exercise of stock warrants to common stock		—			82			—
Deferred offering costs recorded in accounts payable and accrued liabilities		—			—			126

TUBEMOGUL, INC.
Preliminary Key Operating and Financial Performance Metrics
(in thousands, except percentages and clients)
(Unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
Key Metrics
Platform Direct Spend	$	98,243		$	62,787		$	305,748		$	189,248
Platform Services Spend		36,268			19,780			108,484			65,012
Total Spend	$	134,511		$	82,567		$	414,232		$	254,260
Platform Direct revenue	$	22,187		$	16,302		$	72,212		$	49,231
Platform Services revenue		36,268			19,780			108,484			65,012
Total revenue	$	58,455		$	36,082		$	180,696		$	114,243
Gross profit	$	39,209		$	25,719		$	122,503		$	80,302
Gross margin		67	%		71	%		68	%		70	%
Adjusted EBITDA	$	3,651		$	(481	)	$	3,358		$	2,553
Number of Platform Direct Clients		446			333		446			333

Use of Non-GAAP Measures

This press release includes information relating to Total Spend, Platform Direct Spend, and Adjusted EBITDA, which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be considered as alternatives to GAAP measures or as indications of operating performance or any other measure of performance derived in accordance with GAAP. We do not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial measures. These non-GAAP financial measures have been included in this press release because they are measures used by our management and board of directors to understand our business, make operating decisions and understand and evaluate our operating results.

For purposes of calculating Total Spend and Platform Direct Spend, we define spend as the aggregate gross dollar volume that our customers spend through our platform, which includes cost of media purchases and our fees. Platform Direct Spend does not represent revenue earned by us and is a non-GAAP financial measure defined by us as the spend through our Platform Direct offering. Platform Services Spend equals our Platform Services revenue. Total Spend does not represent revenue earned by us and is a non-GAAP financial measure defined by us as the sum of Platform Direct Spend and Platform Services Spend. We believe Platform Direct Spend and Total Spend are meaningful measures of our operating performance because our ability to generate increases in Platform Direct Spend and Total Spend are strongly correlated to our ability to generate increases in Platform Direct revenue and revenue, respectively. Platform Direct Spend and Total Spend are used by our management and board of directors to understand our business and make operating decisions. A limitation of each of Platform Direct Spend and Total Spend is that each is a measure that we have defined for internal purposes that may be unique to us, and therefore it may not enhance the comparability of our results to other companies in our industry that have similar business arrangements but present the impact of media costs differently. Because of these limitations you should consider Platform Direct Spend and Total Spend along with the corresponding GAAP-based measures.

Adjusted EBITDA is a non-GAAP financial measure defined by us as net loss before interest expense, net, provision for income tax, depreciation and amortization expense, excluding amortization of internal use software development costs, stock-based compensation expense, foreign exchange gains and losses, both realized and unrealized, change in fair value of convertible preferred stock warrant liability and loss on extinguishment of convertible notes. We have presented Adjusted EBITDA in this press release because it is a key measure used by our management and board of directors 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 the exclusion of the amounts eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:

Although depreciation and amortization expense (excluding amortization of internal use software development costs) are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

·	Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of stock-based compensation; or (3) tax payments that may represent a reduction in cash available to us; and

·	Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, loss, and our GAAP financial results.

For a reconciliation of non-GAAP financial measures to the nearest comparable GAAP financial measures for each of the periods indicated, see “Reconciliation of Preliminary Total Spend and Platform Direct Spend,” and “Reconciliation of Preliminary Adjusted EBITDA” included in this press release.

TUBEMOGUL, INC.
Reconciliation of Preliminary Total Spend and Platform Direct Spend
(in thousands)
(Unaudited)

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2015		2014		2015		2014
Platform Direct Revenue	$	22,187	$	16,302	$	72,212	$	49,231
Plus: Non-GAAP Platform Direct Media Cost		76,056		46,485		233,536		140,017
Platform Direct Spend	$	98,243	$	62,787	$	305,748	$	189,248
Platform Services Spend	$	36,268	$	19,780	$	108,484	$	65,012
Total Spend	$	134,511	$	82,567	$	414,232	$	254,260

TUBEMOGUL, INC.
Reconciliation of Preliminary Adjusted EBITDA
(in thousands)
(Unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
Net loss	$	(1,500	)	$	(4,044	)	$	(13,731	)	$	(4,444	)
Interest income (expense), net		(20	)		33			37			216
Provision for income taxes		406			82			663			283
Depreciation and amortization expense, excluding amortization of internal use software development costs		579			226			1,630			598
Stock-based compensation expense		3,750			1,707			12,563			3,543
Foreign exchange loss, net		436			977			2,196			1,987
Change in fair value of convertible preferred stock warrant liability	—			—				—			(168	)
Loss on extinguishment of convertible notes	—				538			—			538
Adjusted EBITDA	$	3,651		$	(481	)	$	3,358		$	2,553

Investor Relations Contact:

Alex Wellins, The Blueshirt Group

(415) 217-5861

investor@tubemogul.com

TUBEMOGUL INC - FORM 8-K - EX-99.1 - February 29, 2016

Attached files

TUBEMOGUL INC Reports