Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Telaria, Inc. | telariaincq42017earningsre.htm |
TELARIA REPORTS FOURTH QUARTER 2017 FINANCIAL RESULTS
Full year revenue grows more than 50%; record quarterly revenue of $15.0 million and Adjusted EBITDA of $3.0 million with 20% Adjusted EBITDA margins
NEW YORK, NY - February 26, 2018 - Telaria, Inc. (NYSE:TLRA), a leading video monetization software company, today announced financial results for the fourth quarter and full year ended December 31, 2017.
Fourth Quarter 2017 Highlights:
• | Revenue of $15.0 million, up 45% year-over-year |
• | Gross profit of $14.0 million, up 46% year-over-year |
• | Gross margin 93% |
• | Adjusted EBITDA(1) of $3.0 million |
• | Adjusted EBITDA(1) margin of 20% |
Full Year 2017 Highlights:
• | Revenue of $43.8 million, up 50% |
• | Gross profit of $40.4 million, up 50% |
• | Gross margin 92% |
• | Adjusted EBITDA(1) $(6.5) million |
(1) | Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion in the section called “Non-GAAP Financial Measures” and the reconciliation included at the end of this press release. |
“I am very proud of our results this quarter, our first full quarter as Telaria,” said Mark Zagorski, Telaria CEO. “We successfully completed the transition to an independent video seller platform and delivered exceptional results, including 45% revenue growth and 20% EBITDA margins. With our continued focus on premium CTV partners and our strong momentum in a fast-growing market, we are excited about our outlook for 2018 and remain committed to our long-term targets."
Business Highlights:
• | Increased CTV contribution to nearly 16% of revenue by year-end |
• | Introduced Fraud Fighter, a first-to-market quality guarantee for premium video inventory |
• | Appointed industry veteran Rick Song as Chief Revenue Officer, bringing a strong history of building successful sales teams at Microsoft, iHeart and Zefr |
Fourth Quarter and Full-Year Results Summary
(in millions, except per share amounts), (unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||
December 31, 2017 | December 31, 2016 | % Change | December 31, 2017 | December 31, 2016 | % Change | |||||||
Revenue | $15.0 | $10.4 | 45% | $43.8 | $29.1 | 50% | ||||||
Gross profit | $14.0 | $9.6 | 46% | $40.4 | $26.9 | 50% | ||||||
Loss from continuing operations, net of income taxes | $(0.1) | $(3.1) | 98% | $(19.7) | $(23.9) | 17% | ||||||
Adjusted EBITDA | $3.0 | $(0.8) | 364% | $(6.5) | $(11.8) | 45% | ||||||
Net income (loss) from continuing operations, net of income taxes per share | $— | $(0.06) | NM | $(0.39) | $(0.46) | 15% | ||||||
1
Guidance
Based on information available as of February 26, 2018, the Company expects the following:
First Quarter and Full Year 2018 Outlook
Q1 2018 | Full Year 2018 | |||
Revenue | $8.5-$10.0 million | $58.0-$62.0 million | ||
Adjusted EBITDA | $(4.5)-$(3.5) million | $5.0-$8.0 million | ||
Q4 2018 Financial Results Webcast: The Company will host a conference call at 8:00 AM ET today to discuss its results. The conference call can be accessed toll-free at (877) 407-9039 or (201) 689-8470 (Toll/International). The call will also be broadcast simultaneously at http://telaria.com. Following completion of the call, a recorded replay of the webcast will be available on Telaria’s website. To listen to the telephone replay, call toll-free (844) 512-2921 or (412) 317-6671 (Toll/International), replay Pin #: 13675683. The telephone replay will be available from 11:00 AM ET February 26, 2018 through 11:59 PM ET March 5, 2018. Additional investor information can be accessed at http://telaria.com.
About Telaria
Telaria (NYSE: TLRA) is the leading independent data-driven software platform built to monetize and manage premium video inventory with the greatest speed, control, and transparency, wherever and however audiences are watching.
“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 statements related to 2018 first quarter and full year financial guidance and long-term financial targets. 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 continuing development of its business model; the impact of the disposition of the company’s buyer platform on the company’s operations and financial results, including loss of synergies between the buyer platform and seller platform; 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 demand partners and maintain relationships with current demand partners; the company’s ability to increase or maintain spend from existing demand partners, including the Tremor Video DSP buyer platform, which the company sold in August 2017; growth of OTT and connected TV markets; risks of entering new markets in which we have limited or no experience and difficulty adapting our solutions for new markets; the company’s ability to attract sellers of premium video advertising inventory to its platform and secure inventory 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 its solutions; the impact of tools that block the display of video ads; the effect of legal, 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 the company’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission on March 10, 2017, its Quarterly Report on Form 10-Q for the period ended March 31, 2017, filed with the U.S. Securities and Exchange Commission on May 10, 2017, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the U.S. Securities and Exchange Commission on August 9, 2017, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed with the Securities and
2
Exchange Commission on November 9, 2017 and future filings and reports by the company, including its Annual Report on Form 10-K for the year ended December 31, 2017.
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, Telaria 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”), Telaria reports Adjusted EBITDA, which is a non-GAAP financial measure. We define Adjusted EBITDA as net loss before total interest expense and other income (expense), net, provision for income taxes, and depreciation and amortization expense, and adjusted to eliminate the impact of non-cash stock-based compensation expense, acquisition related costs, mark-to-market expense, executive severance, retention and recruiting costs, disposition related costs, expenses for transitional services, litigation costs and other adjustments. We use Adjusted EBITDA for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that the use of Adjusted EBITDA provides useful information about our operating results, enhances the overall understanding of our past financial performance and future prospects, and allows for greater transparency with respect to a key metric that is 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. With respect to our expectations under “Guidance” above, reconciliation 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 costs and charges excluded from this non-GAAP measure, 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 these costs and charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
###
Investor Relations Contact:
Andrew Posen
Vice President, Head of Investor Relations
212-792-2315
IR@telaria.com
Media Contact:
Lekha Rao
Vice President, Media Relations & Corporate Communications
646-699-7706
lrao@telaria.com
3
Exhibit A
Telaria, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 76,320 | $ | 43,160 | ||||
Accounts receivable, net | 59,288 | 29,429 | ||||||
Prepaid expenses and other current assets | 2,499 | 1,833 | ||||||
Current assets of discontinued operations | — | 50,170 | ||||||
Total current assets | 138,107 | 124,592 | ||||||
Long-term assets: | ||||||||
Restricted cash | — | 770 | ||||||
Property and equipment, net | 3,194 | 7,141 | ||||||
Intangible assets, net | 1,307 | 1,544 | ||||||
Goodwill | 6,320 | 6,228 | ||||||
Deferred tax asset | 332 | — | ||||||
Other assets | 1,168 | 1,251 | ||||||
Non-current assets of discontinued operations | — | 12,699 | ||||||
Total long-term assets | 12,321 | 29,633 | ||||||
Total assets | $ | 150,428 | $ | 154,225 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 59,419 | $ | 32,998 | ||||
Deferred rent, short-term | 808 | 704 | ||||||
Contingent consideration on acquisition, short-term | — | 2,483 | ||||||
Deferred income | 674 | — | ||||||
Other current liabilities | 53 | 179 | ||||||
Current liabilities of discontinued operations | — | 32,060 | ||||||
Total current liabilities | 60,954 | 68,424 | ||||||
Long-term liabilities: | ||||||||
Deferred rent | 5,260 | 5,996 | ||||||
Deferred tax liabilities | 338 | 447 | ||||||
Other liabilities | 737 | — | ||||||
Non-current liabilities of discontinued operations | — | 836 | ||||||
Total liabilities | 67,289 | 75,703 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock | 5 | 5 | ||||||
Treasury stock | (8,443 | ) | (6,037 | ) | ||||
Additional paid-in capital | 288,277 | 283,486 | ||||||
Accumulated other comprehensive loss | (232 | ) | (331 | ) | ||||
Accumulated deficit | (196,468 | ) | (198,601 | ) | ||||
Total stockholders’ equity | 83,139 | 78,522 | ||||||
Total liabilities and stockholders’ equity | $ | 150,428 | $ | 154,225 | ||||
4
Telaria, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue | $ | 15,011 | $ | 10,377 | $ | 43,799 | $ | 29,121 | ||||||||
Cost of revenue | 1,003 | 769 | 3,448 | 2,211 | ||||||||||||
Gross profit | 14,008 | 9,608 | 40,351 | 26,910 | ||||||||||||
Operating expenses: | ||||||||||||||||
Technology and development(1) | 1,936 | 1,834 | 8,586 | 6,961 | ||||||||||||
Sales and marketing(1) | 6,386 | 5,935 | 28,073 | 22,297 | ||||||||||||
General and administrative(1) | 5,207 | 4,126 | 20,197 | 16,069 | ||||||||||||
Depreciation and amortization | 1,591 | 952 | 4,586 | 3,754 | ||||||||||||
Mark-to-market(2) | — | 168 | 148 | 1,263 | ||||||||||||
Total operating expenses | 15,120 | 13,015 | 61,590 | 50,344 | ||||||||||||
Loss from continuing operations | (1,112 | ) | (3,407 | ) | (21,239 | ) | (23,434 | ) | ||||||||
Interest and other income (expense), net: | ||||||||||||||||
Interest expense | (14 | ) | (110 | ) | (268 | ) | (129 | ) | ||||||||
Other income (expense), net | 660 | 90 | 1,460 | (123 | ) | |||||||||||
Total interest and other income (expense), net | 646 | (20 | ) | 1,192 | (252 | ) | ||||||||||
Loss from continuing operations before income taxes | (466 | ) | (3,427 | ) | (20,047 | ) | (23,686 | ) | ||||||||
(Benefit) provision for income taxes | (403 | ) | (333 | ) | (347 | ) | 164 | |||||||||
Loss from continuing operations, net of income taxes | (63 | ) | (3,094 | ) | (19,700 | ) | (23,850 | ) | ||||||||
(Loss) gain on sale of discontinued operations, net of income taxes | (298 | ) | — | 14,626 | — | |||||||||||
(Loss) income from discontinued operations, net of income taxes | (546 | ) | 2,693 | 7,301 | 2,903 | |||||||||||
Total (loss) income from discontinued operations, net of income taxes | (844 | ) | 2,693 | 21,927 | 2,903 | |||||||||||
Net (loss) income | $ | (907 | ) | $ | (401 | ) | $ | 2,227 | $ | (20,947 | ) | |||||
Net (loss) income per share - basic and diluted | ||||||||||||||||
Income (loss) from continuing operations, net of income taxes | $ | — | $ | (0.06 | ) | $ | (0.39 | ) | $ | (0.46 | ) | |||||
(Loss) income from discontinued operations, net of income taxes | $ | (0.02 | ) | $ | 0.05 | 0.43 | 0.06 | |||||||||
Net income (loss) | $ | (0.02 | ) | $ | (0.01 | ) | $ | 0.04 | $ | (0.40 | ) | |||||
Weighted-average number of shares of common stock outstanding: | ||||||||||||||||
Basic and diluted | 51,195,402 | 51,644,295 | 50,511,366 | 52,279,738 | ||||||||||||
5
Telaria, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
(1) Stock-based compensation expenses included above:
Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Stock-based compensation expense: | ||||||||||||||||
Technology and development | $ | 159 | $ | 123 | $ | 615 | $ | 459 | ||||||||
Sales and marketing | 811 | 113 | 2,062 | 476 | ||||||||||||
General and administrative | 721 | 396 | 2,044 | 1,551 | ||||||||||||
Total in continuing operations | $ | 1,691 | $ | 632 | $ | 4,721 | $ | 2,486 | ||||||||
(2) Reflects expense incurred based on the Company’s re-measurement of the estimated fair value of earn-out payments that were paid in connection with the acquisition of The Video Network Pty Ltd, an Australian proprietary limited company (“TVN”), and which are not conditioned on continued employment with the Company.
6
Telaria, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Years Ended December 31, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net loss from continuing operations | $ | (19,700 | ) | $ | (23,850 | ) | ||
Net income from discontinued operations | 21,927 | 2,903 | ||||||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
Impairment charges | — | — | ||||||
Depreciation and amortization expense | 7,760 | 9,173 | ||||||
Gain on sale of discontinued operations, before income taxes | (14,958 | ) | — | |||||
Loss from sublease | — | 246 | ||||||
Bad debt expense (recovery) | 356 | (66 | ) | |||||
Mark-to-market expense | 148 | 1,263 | ||||||
Compensation expense related to the acquisition-contingent consideration | 1,810 | 3,568 | ||||||
Deferred tax benefit | (332 | ) | (92 | ) | ||||
Loss on disposal of property and equipment | 392 | 23 | ||||||
Stock based compensation expense | 5,394 | 3,900 | ||||||
Stock-based long-term incentive compensation | — | (300 | ) | |||||
Net change in operating assets and liabilities: | ||||||||
Increase in accounts receivable | (19,891 | ) | (8,277 | ) | ||||
Decrease in contingent consideration on acquisition | (4,753 | ) | (3,406 | ) | ||||
(Increase)/decrease in prepaid expenses, other current assets and other long-term assets | (3,157 | ) | 583 | |||||
(Decrease)/increase in accounts payable and accrued expenses | 13,831 | 6,728 | ||||||
(Decrease)/increase in other current liabilities | (126 | ) | 179 | |||||
Decrease in deferred tax liability | (110 | ) | — | |||||
(Decrease)/increase in deferred rent and security deposits payable | (629 | ) | 628 | |||||
Decrease/(increase) in restricted cash | 770 | (170 | ) | |||||
Increase/(decrease) in deferred income and other liabilities | 1,407 | (103 | ) | |||||
Net cash used in operating activities | (9,861 | ) | (7,070 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (1,113 | ) | (2,933 | ) | ||||
Acquisition, net of cash acquired | — | — | ||||||
Cash received from sale of discontinued operations | 49,000 | — | ||||||
Expenses paid with respect to sale of discontinued operations | (1,954 | ) | — | |||||
Net cash provided by (used in) investing activities | 45,933 | (2,933 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock under employee stock purchase plan | 446 | 499 | ||||||
Decrease in contingent consideration on acquisition | — | (431 | ) | |||||
Proceeds from the exercise of stock option awards | 699 | 161 | ||||||
Principal portion of capital lease payments | (214 | ) | (19 | ) | ||||
Treasury stock — repurchase of stock | (2,406 | ) | (6,037 | ) | ||||
Tax withholdings related to net share settlements of restricted stock units | (1,842 | ) | (505 | ) | ||||
Net cash used in financing activities | (3,317 | ) | (6,332 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 32,755 | (16,335 | ) | |||||
Effect of exchange rate changes in cash and cash equivalents | 405 | (392 | ) | |||||
Cash and cash equivalents at beginning of year | 43,160 | 59,887 | ||||||
Cash and cash equivalents at end of year | $ | 76,320 | $ | 43,160 | ||||
7
Exhibit B
Telaria, Inc.
Reconciliation of Net Loss from Continuing Operations to Adjusted EBITDA
(in thousands)
(unaudited)
Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Income (loss) from continuing operations, net of income taxes | $ | (63 | ) | $ | (3,094 | ) | $ | (19,700 | ) | $ | (23,850 | ) | ||||
Adjustments: | ||||||||||||||||
Depreciation and amortization expense | 1,591 | 952 | 4,586 | 3,754 | ||||||||||||
Total interest and other expense (income), net | (646 | ) | 20 | (1,192 | ) | 252 | ||||||||||
Provision for income taxes | (403 | ) | (333 | ) | (347 | ) | 164 | |||||||||
Stock-based compensation expense | 1,691 | 632 | 4,721 | 2,486 | ||||||||||||
Acquisition-related costs(1) | — | 819 | 1,810 | 3,583 | ||||||||||||
Mark-to market expense(2) | — | 168 | 148 | 1,263 | ||||||||||||
Executive severance, retention and recruiting costs | 202 | — | 1,421 | 59 | ||||||||||||
Disposition related costs(3) | 129 | — | 1,029 | — | ||||||||||||
Expenses for transitional services(4) | 541 | — | 905 | — | ||||||||||||
Litigation costs | — | — | — | 194 | ||||||||||||
Other adjustments(5) | — | — | 102 | 266 | ||||||||||||
Total net adjustments | 3,105 | 2,258 | 13,183 | 12,021 | ||||||||||||
Adjusted EBITDA | $ | 3,042 | $ | (836 | ) | $ | (6,517 | ) | $ | (11,829 | ) | |||||
(1) Reflects acquisition-related costs incurred in connection with our acquisition of TVN. Includes compensation-related expenses related to contingent consideration payments that were paid to certain TVN sellers that are subject to continued employment.
(2) Reflects expense incurred based on the Company’s re-measurement of the estimated fair value of earn-out payments that were paid in connection with the acquisition of TVN and which are not conditioned on continued employment with the Company.
(3) Professional fees incurred in connection with the Company’s sale of its buyer platform in August 2017.
(4) In connection with the sale of the Company's buyer platform, the Company entered into a transitional services agreement with the acquirer. Reflects cost incurred providing such transitional services.
(5) Reflects amounts accrued in connection with a one-time change in the Company’s employee vacation policy.
8