Rubicon Project (NYSE:RUBI)
, the
global exchange for advertising, today reported its results of
operations for the fourth quarter and year ended December 31,
2017.
Recent Highlights:
- Total annualized spending reduced by $44 million or 23% on a
forward run rate basis. This compares Q4 2017 annualized run
rate of adjusted EBITDA operating expenses and capital expenditures
to the post reduction run rate.
- Reduction includes elimination of 100 positions, $20 million
reduction to capital expenditures, and implementation of other
operating efficiencies in 2018.
- Double digit year over year advertising spend growth since
early February.
- Take rate remaining stable since November 1, 2017 elimination
of the Company's buyer fees.
- Company expects to be adjusted EBITDA positive in Q4 of
2018.
- Improved auction dynamics by implementing a default first price
auction in header bidding transactions and launching our Estimated
Market Rate ("EMR") tool for buyers.
- Revenue for the fourth quarter 2017 was $31.4 million, compared
to $72.7 million for the fourth quarter of 2016; Non-GAAP net
revenue(1) was $31.4 million, compared to $66.9 million for
the fourth quarter of 2016.
- Net loss for the fourth quarter 2017 was $23.8 million, or
diluted loss per share of $0.48, compared to net loss of $21.2
million, or diluted loss per share of $0.44 for the fourth quarter
of 2016. Included in the net loss for the fourth quarter of 2017
was an impairment of intangible assets expense of $4.6
million.
- Adjusted EBITDA loss(1) for Q4 2017 was $6.2 million, compared
to Adjusted EBITDA of $21.7 million for the fourth quarter of
2016.
- Non-GAAP loss per share(1) was $0.28 for the fourth quarter of
2017, compared to $0.37 in non-GAAP earnings per share for the
fourth quarter of 2016.
“We made significant strides to strengthen our competitive and
financial position during and after the fourth quarter,” said
Michael G. Barrett, President and CEO of Rubicon Project. "As our
industry moves through a heightened consolidation phase, we
continue to lead in transparency, trust, support and technology,
all with extremely attractive pricing, to win business with buyers
and deliver meaningful revenue growth for our publishers.
2017 was a year we invested heavily to position the company for
growth and in 2018 we have now taken significant steps to reduce
our operating costs and capex. The result of recent double
digit ad spend growth, combined with today's cost reductions are
intended to put us on strong financial footing and make us adjusted
EBITDA positive in Q4 of 2018.”
Fourth Quarter and Full Year 2017 Results
Summary |
|
|
|
|
|
|
(in
millions, except per share amounts and percentages) |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2017 |
|
December 31, 2016 |
|
Change Favorable/(Unfavorable) |
|
December 31, 2017 |
|
December 31, 2016 |
|
Change Favorable/(Unfavorable) |
Revenue |
$ |
31.4 |
|
|
$ |
72.7 |
|
|
(57 |
)% |
|
$ |
155.5 |
|
|
$ |
278.2 |
|
|
(44 |
)% |
Advertising
spend(1) |
$ |
246.3 |
|
|
$ |
277.1 |
|
|
(11 |
)% |
|
$ |
837.2 |
|
|
$ |
1,025.8 |
|
|
(18 |
%) |
Non-GAAP net
revenue(1) |
$ |
31.4 |
|
|
$ |
66.9 |
|
|
(53 |
)% |
|
$ |
154.9 |
|
|
$ |
256.1 |
|
|
(40 |
%) |
Take rate(3) |
|
12.8 |
% |
|
|
24.1 |
% |
|
(11 ppt) |
|
|
18.5 |
% |
|
|
25.0 |
% |
|
(7 ppt) |
Net loss |
$ |
(23.8 |
) |
|
$ |
(21.2 |
) |
|
(12 |
)% |
|
$ |
(154.8 |
) |
|
$ |
(18.1 |
) |
|
NM |
Adjusted EBITDA(1) |
$ |
(6.2 |
) |
|
$ |
21.7 |
|
|
NM |
|
$ |
(4.4 |
) |
|
$ |
70.9 |
|
|
NM |
Adjusted EBITDA
margin(2) |
|
(20 |
%) |
|
|
32 |
% |
|
NM |
|
|
(3 |
%) |
|
|
28 |
% |
|
NM |
Basic net loss per
share |
$ |
(0.48 |
) |
|
$ |
(0.44 |
) |
|
(9 |
)% |
|
$ |
(3.17 |
) |
|
$ |
(0.39 |
) |
|
NM |
Diluted loss per
share |
$ |
(0.48 |
) |
|
$ |
(0.44 |
) |
|
(9 |
)% |
|
$ |
(3.17 |
) |
|
$ |
(0.39 |
) |
|
NM |
Non-GAAP earnings
(loss) per share(1) |
$ |
(0.28 |
) |
|
$ |
0.37 |
|
|
NM |
|
$ |
(0.68 |
) |
|
$ |
1.07 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Definitions: |
NM |
Not
meaningful. |
(1) |
|
Advertising
spend, non-GAAP net revenue, Adjusted EBITDA and non-GAAP earnings
(loss) per share are non-GAAP financial measures. Please see the
discussion in the section called "Non-GAAP Financial Measures" and
the reconciliations included at the end of this press release. |
(2) |
|
Adjusted
EBITDA margin is calculated as Adjusted EBITDA divided by non-GAAP
net revenue. Reconciliations for both net loss to Adjusted EBITDA
and revenue to non-GAAP net revenue are included at the end of this
press release. For further discussion, please see "Non-GAAP
Financial Measures." |
(3) |
|
Take rate
is an operational performance measure calculated as revenue (or for
periods in which we have revenue reported on a gross basis, as
non-GAAP net revenue) divided by advertising spend. The decline in
our take rate compared to the 2016 periods is due to the reduction
of our buyer fees during 2017, culminating in their elimination on
November 1. Reconciliations for revenue to both advertising
spend and non-GAAP net revenue are included at the end of this
press release. For further discussion, please see "Non-GAAP
Financial Measures." We review take rate for internal management
purposes to assess the development of our marketplace with buyers
and sellers. Our take rate (and our fees, which drive take rate)
can be affected by a variety of factors, including the terms of our
arrangements with buyers and sellers active on our platform in a
particular period, the scale of a buyer's or seller's activity on
our platform, mix of inventory or transaction types, the
implementation of new products, platforms and solution features,
auction dynamics, negotiations with clients, header bidding,
competitive factors, and the overall development of the digital
advertising ecosystem. |
|
|
|
Fourth Quarter 2017 Results Conference Call and
Webcast:
The Company will host a conference call on March 14, 2018 at
1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its fourth
quarter of 2017.
Live conference
call |
|
Toll free number: |
(844) 875-6911 (for
domestic callers) |
Direct dial
number: |
(412) 902-6511 (for
international callers) |
Passcode: |
Ask to join the Rubicon
Project conference call |
Simultaneous audio
webcast: |
http://investor.rubiconproject.com, under "Events and
Presentations" |
|
|
Conference call
replay |
|
Toll free number: |
(877) 344-7529 (for
domestic callers) |
Direct dial
number: |
(412) 317-0088 (for
international callers) |
Passcode: |
10116890 |
Webcast link: |
http://investor.rubiconproject.com, under "Events and
Presentations" |
|
|
About Rubicon Project
Founded in 2007, Rubicon Project is one of the world’s
largest advertising exchanges. The company helps websites and apps
thrive by giving them tools and expertise to sell ads easily and
safely. In addition, the world's leading agencies and brands rely
on Rubicon Project’s technology to execute billions of advertising
transactions each month. Rubicon Project is an
independent, publicly traded company (NYSE:RUBI) headquartered
in Los Angeles, California.
Note: The Rubicon Project and the Rubicon Project logo are
registered service marks of The Rubicon Project, Inc.
Forward-Looking Statements:
This press release and management's prepared remarks during the
conference call referred to above include, and management's answers
to questions during the conference call may include,
forward-looking statements, including statements based upon or
relating to our expectations, assumptions, estimates, and
projections. In some cases, you can identify forward-looking
statements by terms such as "may," "might," "will," "objective,"
"intend," "should," "could," "can," "would," "expect," "believe,"
"design," "anticipate," "estimate," "predict," "potential," "plan"
or the negative of these terms, and similar expressions.
Forward-looking statements may include, but are not limited to,
statements concerning our anticipated financial performance,
including, without limitation, revenue, advertising spend, non-GAAP
net revenue, profitability, net income (loss), Adjusted EBITDA,
earnings per share, and cash flow; strategic objectives, including
focus on header bidding, mobile, video, and private marketplace
opportunities; investments in our business; development of our
technology; introduction of new offerings; the impact of our
acquisition of nToggle and its traffic shaping technology on our
business; the effects of our cost reduction initiatives; scope and
duration of client relationships; the fees we may charge in the
future; business mix and expansion of our mobile, video, and
private marketplace offerings; sales growth; client utilization of
our offerings; our competitive differentiation; our market share
and leadership position in the industry; market conditions, trends,
and opportunities; user reach; certain statements regarding future
operational performance measures including ad requests, fill rate,
paid impressions, average CPM, take rate, and advertising spend;
and factors that could affect these and other aspects of our
business.
These statements are not guarantees of future performance; they
reflect our current views with respect to future events and are
based on assumptions and estimates and subject to known and unknown
risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different
from expectations or results projected or implied by
forward-looking statements. These risks include, but are not
limited to: our ability to grow rapidly and to manage any growth
effectively, including in our mobile, video, PMP, header bidding,
and buyer businesses; our ability to develop innovative new
technologies and remain a market leader; our ability to attract and
retain buyers and sellers and increase our business with them; our
vulnerability to loss of, or reduction in spending by, buyers; our
ability to maintain and grow a supply of advertising inventory from
sellers; the effect on the advertising market and our business from
difficult economic conditions; the freedom of buyers and sellers to
direct their spending and inventory to competing sources of
inventory and demand; our ability to use our solution to purchase
and sell higher value advertising and to expand the use of our
solution by buyers and sellers utilizing evolving digital media
platforms; our ability to introduce new offerings and bring them to
market in a timely manner in response to client demands and
industry trends, including shifts in digital advertising growth
from display to mobile channels; the increased prevalence of header
bidding and its effect on our competitive position; uncertainty of
our estimates and expectations associated with new offerings,
including header bidding, private marketplace, mobile, video, and
guaranteed audience solutions, and traffic shaping; declining fees
and take rate, and the need to grow through advertising spend
increases rather than fee increases; our ability to compensate for
a reduced take rate by increasing the volume and/or value of
transactions on our platform; our vulnerability to the depletion of
our cash resources as revenue declines with the reduction in our
take rate and as we incur additional investments in technology
required to support the increased volume of transactions on our
exchange; our ability to support our growth objectives with reduced
resources resulting from our cost reduction initiatives; our
ability to raise additional capital if needed and/or to renew our
working capital line of credit; our limited operating history and
history of losses; our ability to continue to expand into new
geographic markets; our ability to adapt effectively to shifts in
digital advertising to mobile and video channels; increased
prevalence of ad blocking technologies; the slowing growth
rate of online digital display advertising; the growing percentage
of online and mobile advertising spending captured by owned and
operated sites (such as Facebook and Google); the effects,
including loss of market share, of increased competition in our
market and increasing concentration of advertising spending,
including mobile spending, in a small number of very large
competitors; acts of competitors and other third parties that can
adversely affect our business; our ability to differentiate our
offerings, and compete effectively in a market trending
increasingly toward commodification, transparency, and
disintermediation; requests from buyers and sellers for discounts,
fee concessions or revisions, rebates, refunds, and greater levels
of pricing transparency and specificity; potential adverse effects
of malicious activity such as fraudulent inventory and malware; the
effects of seasonal trends on our results of operations; costs
associated with defending intellectual property infringement and
other claims; our ability to attract and retain qualified employees
and key personnel; our ability to identify future acquisitions of
or investments in complementary companies or technologies and our
ability to consummate the acquisitions and integrate such companies
or technologies; and our ability to comply with, and the effect on
our business of, evolving legal standards and regulations,
particularly concerning data protection and consumer privacy and
evolving labor standards.
We discuss many of these risks and additional factors that could
cause actual results to differ materially from those anticipated by
our forward-looking statements under the headings "Risk Factors,"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and elsewhere in filings we have made
and will make from time to time with the Securities and Exchange
Commission, or SEC, including in our Annual Report on Form 10-K for
the year ended December 31, 2017 and Quarterly Reports on Form 10-Q
for 2018. These forward-looking statements represent our estimates
and assumptions only as of the date they are made. Unless required
by federal securities laws, we assume no obligation to update any
of these forward-looking statements, or to update the reasons
actual results could differ materially from those anticipated, to
reflect circumstances or events that occur after the statements are
made. Without limiting the foregoing, any guidance we may provide
will generally be given only in connection with quarterly and
annual earnings announcements, without interim updates, and we may
appear at industry conferences or make other public statements
without disclosing material nonpublic information in our
possession. Given these uncertainties, investors should not place
undue reliance on these forward-looking statements. Investors
should read this press release and the documents that we reference
in this press release and have filed or will file with the SEC
completely and with the understanding that our actual future
results may be materially different from what we expect. We qualify
all of our forward-looking statements by these cautionary
statements.
Non-GAAP Financial Measures:
This press release includes information relating to advertising
spend, non-GAAP net revenue, Adjusted EBITDA, non-GAAP net income,
and non-GAAP earnings per share, which are financial measures that
have not been prepared in accordance with GAAP. These non-GAAP
financial measures are used by our management and board of
directors, in addition to our GAAP results, to understand and
evaluate our performance and trends, to prepare and approve our
annual budget, and to develop short- and long-term plans and
performance objectives. Management believes that these non-GAAP
financial measures provide useful information about our core
results and thus are appropriate to enhance the overall
understanding of our past performance and our prospects for the
future.
These non-GAAP financial measures are not intended to be
considered in isolation from, as substitutes for, or as superior
to, the corresponding financial measures prepared in accordance
with GAAP. You are encouraged to evaluate these adjustments, and
review the reconciliation of these non-GAAP financial measures to
their most comparable GAAP measures, and the reasons we consider
them appropriate. It is important to note that the particular items
we exclude from, or include in, our non-GAAP financial measures may
differ from the items excluded from, or included in, similar
non-GAAP financial measures used by other companies. See
"Reconciliation of revenue to advertising spend and revenue to
non-GAAP net revenue," "Reconciliation of net loss to Adjusted
EBITDA," "Reconciliation of net loss to non-GAAP net income" and
"Reconciliation of GAAP EPS to non-GAAP EPS" included as part of
this press release.
We define advertising spend as the buyer spending on advertising
transacted on our platform. Advertising spend does not represent
revenue reported on a GAAP basis. Tracking our advertising spend
allows us to compare our results to the results of companies that
report all spending transacted on their platforms as GAAP revenue
on a gross basis. We also use advertising spend for internal
management purposes to assess market share of total advertising
spending. Our advertising spend may be influenced by demand for our
services, the volume and characteristics of paid impressions,
average CPM, and other factors such as changes in the market, our
execution of the business, and competition. Advertising spend may
fluctuate due to seasonality and increases or decreases in average
CPM and paid impressions. In addition, we generally experience
higher advertising spend during the fourth quarter of a given year
resulting from higher advertising budgets by advertisers and more
bidding activity on our platform, which may drive higher volumes of
paid impressions or average CPM. Growth in our advertising spend
slowed significantly in 2016 for various reasons, including shift
of spending on digital advertising from desktop, which represents
the majority of our business to mobile, our delay in embracing
header bidding, and absorption by competitors, principally Google
and Facebook, of an increasing share of growth in spending on
digital advertising.
We define non-GAAP net revenue as GAAP revenue less amounts we
pay sellers that are included within cost of revenue for the
portion of our revenue reported on a gross basis. Non-GAAP net
revenue would represent our revenue if we were to record all of our
revenue on a net basis. Non-GAAP net revenue does not represent
revenue reported on a GAAP basis. Non-GAAP net revenue is one
useful measure in assessing the performance of our business in
periods for which our revenue includes revenue reported on a gross
basis, because it shows the operating results of our business on a
consistent basis without the effect of differing revenue reporting
(gross vs. net) that we apply under GAAP across different types of
transactions, and facilitates comparison of our results to the
results of companies that report all of their revenue on a net
basis. A potential limitation of non-GAAP net revenue is that other
companies may define non-GAAP net revenue differently, which may
make comparisons difficult.
Non-GAAP net revenue is influenced by demand for our services,
the volume and characteristics of advertising spend, and our take
rate. The revenue we have reported on a gross basis was associated
with our intent marketing business. Because we exited that business
in the first quarter of 2017, we do not expect to report any
revenue on a gross basis after the first quarter of 2017 unless and
until we change our business practices, develop new products, or
make an acquisition, in each case with characteristics that require
gross reporting.
Adjusted EBITDA:
We define Adjusted EBITDA as net income (loss) adjusted to
exclude stock-based compensation expense, depreciation and
amortization, amortization of acquired intangible assets,
impairment charges, interest income or expense, and other cash and
non-cash based income or expenses that we do not consider
indicative of our core operating performance, including, but not
limited to foreign exchange gains and losses, acquisition and
related items, and provision (benefit) for income taxes. These
items may include recurring as well as non-recurring items. These
adjustments should not be construed to imply that all of these
adjustments or costs are unusual, infrequent or non-recurring. We
believe Adjusted EBITDA is useful to investors in evaluating our
performance for the following reasons:
- Adjusted EBITDA is widely used by investors and securities
analysts to measure a company’s performance without regard to items
such as those we exclude in calculating this measure, which can
vary substantially from company to company depending upon their
financing, capital structures, and the method by which assets were
acquired.
- Our management uses Adjusted EBITDA in conjunction with GAAP
financial measures for planning purposes, including the preparation
of our annual operating budget, as a measure of performance and the
effectiveness of our business strategies, and in communications
with our board of directors concerning our performance. Adjusted
EBITDA may also be used as a metric for determining payment of cash
incentive compensation.
- Adjusted EBITDA provides a measure of consistency and
comparability with our past performance that many investors find
useful, facilitates period-to-period comparisons of operations, and
also facilitates comparisons with other peer companies, many of
which use similar non-GAAP financial measures to supplement their
GAAP results.
Although Adjusted EBITDA is frequently used by investors and
securities analysts in their evaluations of companies, Adjusted
EBITDA has limitations as an analytical tool, and should not be
considered in isolation or as a substitute for analysis of our
results of operations as reported under GAAP. These limitations
include:
- Stock-based compensation is a non-cash charge and is and will
remain an element of our long-term incentive compensation package,
although we exclude it as an expense when evaluating our ongoing
operating performance for a particular period.
- Depreciation and amortization are non-cash charges, and the
assets being depreciated or amortized will often have to be
replaced in the future, but Adjusted EBITDA does not reflect any
cash requirements for these replacements.
- Impairment charges are non-cash charges related to goodwill,
intangible assets and/or long-lived assets.
- Adjusted EBITDA does not reflect non-cash charges related to
acquisition and related items, such as amortization of acquired
intangible assets and changes in the fair value of contingent
consideration.
- Adjusted EBITDA does not reflect cash and non-cash charges and
changes in, or cash requirements for, acquisition and related
items, such as certain transaction expenses and expenses associated
with earn-out amounts.
- Adjusted EBITDA does not reflect changes in our working capital
needs, capital expenditures, or contractual commitments.
- Adjusted EBITDA does not reflect cash requirements for income
taxes and the cash impact of other income or expense.
- Other companies may calculate Adjusted EBITDA differently than
we do, limiting its usefulness as a comparative measure.
Our Adjusted EBITDA is influenced by fluctuation in our revenue
and the timing and amounts of our investments in our operations.
Adjusted EBITDA should not be considered as an alternative to net
income (loss), operating loss, or any other measure of financial
performance calculated and presented in accordance with GAAP.
We define non-GAAP earnings per share as non-GAAP net income
(loss) divided by non-GAAP weighted-average shares outstanding.
Non-GAAP net income (loss) is equal to net income (loss) excluding
stock-based compensation, impairment charges, cash and non-cash
based acquisition and related expenses, including amortization of
acquired intangible assets, transaction expenses, expenses
associated with earn-out amounts, and foreign currency gains and
losses. In periods in which non-GAAP net income (loss) is positive,
non-GAAP weighted-average shares outstanding used to calculate
non-GAAP earnings per share includes the impact of potentially
dilutive shares. Potentially dilutive shares consist of stock
options, restricted stock awards, restricted stock units, potential
shares issued under the Employee Stock Purchase Plan, each computed
using the treasury stock method, shares held in escrow, and
potential shares issued as part of contingent consideration as a
result of business combinations. We believe non-GAAP earnings per
share is useful to investors in evaluating our ongoing operational
performance and our trends on a per share basis, and also
facilitates comparison of our financial results on a per share
basis with other companies, many of which present a similar
non-GAAP measure. However, a potential limitation of our use of
non-GAAP earnings per share is that other companies may define
non-GAAP earnings per share differently, which may make comparison
difficult. This measure may also exclude expenses that may have a
material impact on our reported financial results. Non-GAAP
earnings per share is a performance measure and should not be used
as a measure of liquidity. Because of these limitations, we also
consider the comparable GAAP measure of net income (loss).
Investor Relations ContactNick Kormeluk(949)
500-0003nkormeluk@rubiconproject.com
Media ContactEric BonachRubicon Project(310)
207-0272press@rubiconproject.com
|
THE RUBICON PROJECT,
INC.CONSOLIDATED CONDENSED BALANCE
SHEETS(In
thousands)(unaudited) |
|
|
|
December 31, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
76,642 |
|
|
$ |
149,423 |
|
Marketable securities |
|
52,504 |
|
|
40,550 |
|
Accounts
receivable, net |
|
165,890 |
|
|
192,064 |
|
Prepaid
expenses and other current assets |
|
9,620 |
|
|
9,540 |
|
TOTAL
CURRENT ASSETS |
|
304,656 |
|
|
391,577 |
|
Property and equipment,
net |
|
47,393 |
|
|
36,246 |
|
Internal use software
development costs, net |
|
12,734 |
|
|
16,522 |
|
Other assets,
non-current |
|
5,493 |
|
|
2,921 |
|
Intangible assets,
net |
|
13,359 |
|
|
6,804 |
|
Goodwill |
|
— |
|
|
65,705 |
|
TOTAL ASSETS |
|
$ |
383,635 |
|
|
$ |
519,775 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
214,103 |
|
|
$ |
214,903 |
|
Other
current liabilities |
|
3,141 |
|
|
3,534 |
|
TOTAL
CURRENT LIABILITIES |
|
217,244 |
|
|
218,437 |
|
Deferred tax liability,
net |
|
— |
|
|
42 |
|
Other liabilities,
non-current |
|
1,780 |
|
|
1,783 |
|
TOTAL LIABILITIES |
|
219,024 |
|
|
220,262 |
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
Common stock |
|
— |
|
|
— |
|
Additional paid-in
capital |
|
418,354 |
|
|
398,787 |
|
Accumulated other
comprehensive loss |
|
41 |
|
|
(273 |
) |
Accumulated
deficit |
|
(253,784 |
) |
|
(99,001 |
) |
TOTAL STOCKHOLDERS'
EQUITY |
|
164,611 |
|
|
299,513 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
$ |
383,635 |
|
|
$ |
519,775 |
|
|
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Revenue |
|
$ |
31,397 |
|
|
$ |
72,667 |
|
|
$ |
155,545 |
|
|
$ |
278,221 |
|
Expenses: |
|
|
|
|
|
|
|
|
Cost of
revenue(1)(2) |
|
15,465 |
|
|
21,126 |
|
|
56,836 |
|
|
73,247 |
|
Sales and
marketing(1)(2) |
|
12,134 |
|
|
18,449 |
|
|
51,794 |
|
|
83,328 |
|
Technology and development(1)(2) |
|
11,123 |
|
|
12,934 |
|
|
47,500 |
|
|
51,184 |
|
General
and administrative(1)(2) |
|
12,517 |
|
|
15,337 |
|
|
55,596 |
|
|
68,570 |
|
Restructuring and other exit costs |
|
— |
|
|
3,316 |
|
|
5,959 |
|
|
3,316 |
|
Impairment of intangible assets and internal use software |
|
4,585 |
|
|
23,473 |
|
|
4,585 |
|
|
23,473 |
|
Impairment of goodwill |
|
— |
|
|
— |
|
|
90,251 |
|
|
— |
|
Total expenses |
|
55,824 |
|
|
94,635 |
|
|
312,521 |
|
|
303,118 |
|
Loss from
operations |
|
(24,427 |
) |
|
(21,968 |
) |
|
(156,976 |
) |
|
(24,897 |
) |
Other (income)
expense: |
|
|
|
|
|
|
|
|
Interest
income, net |
|
(244 |
) |
|
(132 |
) |
|
(908 |
) |
|
(491 |
) |
Other
income |
|
(186 |
) |
|
(166 |
) |
|
(688 |
) |
|
(554 |
) |
Foreign
exchange (gain) loss, net |
|
72 |
|
|
(601 |
) |
|
1,165 |
|
|
(939 |
) |
Total other income,
net |
|
(358 |
) |
|
(899 |
) |
|
(431 |
) |
|
(1,984 |
) |
Loss before income
taxes |
|
(24,069 |
) |
|
(21,069 |
) |
|
(156,545 |
) |
|
(22,913 |
) |
Provision
(benefit) for income taxes |
|
(252 |
) |
|
121 |
|
|
(1,762 |
) |
|
(4,860 |
) |
Net loss |
|
$ |
(23,817 |
) |
|
$ |
(21,190 |
) |
|
$ |
(154,783 |
) |
|
$ |
(18,053 |
) |
Net loss per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.48 |
) |
|
$ |
(0.44 |
) |
|
$ |
(3.17 |
) |
|
$ |
(0.39 |
) |
Diluted |
|
$ |
(0.48 |
) |
|
$ |
(0.44 |
) |
|
$ |
(3.17 |
) |
|
$ |
(0.39 |
) |
Weighted-average shares
used to compute net loss per share: |
|
|
|
|
|
|
|
|
Basic |
|
49,293 |
|
|
48,051 |
|
|
48,869 |
|
|
46,655 |
|
Diluted |
|
49,293 |
|
|
48,051 |
|
|
48,869 |
|
|
46,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Stock-based
compensation expense included in our expenses was as follows: |
|
|
|
|
|
Three Months Ended |
|
Year Ended |
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Cost of revenue |
|
$ |
109 |
|
|
$ |
83 |
|
|
$ |
404 |
|
|
$ |
344 |
|
Sales and
marketing |
|
1,058 |
|
|
1,809 |
|
|
4,582 |
|
|
8,520 |
|
Technology and
development |
|
856 |
|
|
1,327 |
|
|
4,034 |
|
|
5,788 |
|
General and
administrative |
|
2,293 |
|
|
3,427 |
|
|
9,924 |
|
|
14,042 |
|
Restructuring and other
exit costs |
|
— |
|
|
— |
|
|
1,560 |
|
|
— |
|
Total stock-based
compensation expense |
|
$ |
4,316 |
|
|
$ |
6,646 |
|
|
$ |
20,504 |
|
|
$ |
28,694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
Depreciation and
amortization expense included in our expenses was as follows: |
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Cost of revenue |
|
$ |
8,336 |
|
|
$ |
9,175 |
|
|
$ |
31,981 |
|
|
$ |
28,853 |
|
Sales and
marketing |
|
178 |
|
|
2,722 |
|
|
1,066 |
|
|
9,020 |
|
Technology and
development |
|
345 |
|
|
863 |
|
|
1,957 |
|
|
2,759 |
|
General and
administrative |
|
212 |
|
|
641 |
|
|
1,221 |
|
|
2,131 |
|
Total depreciation and
amortization expense |
|
$ |
9,071 |
|
|
$ |
13,401 |
|
|
$ |
36,225 |
|
|
$ |
42,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In
thousands)(unaudited) |
|
|
Year Ended |
|
December 31, 2017 |
|
December 31, 2016 |
OPERATING
ACTIVITIES: |
|
|
|
Net
loss |
$ |
(154,783 |
) |
|
$ |
(18,053 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
36,225 |
|
|
42,763 |
|
Stock-based compensation |
20,504 |
|
|
28,694 |
|
Loss on
disposal of property and equipment |
195 |
|
|
214 |
|
Provision
for doubtful accounts |
580 |
|
|
540 |
|
Accretion
of available for sale securities |
(276 |
) |
|
(82 |
) |
Unrealized foreign currency gains, net |
970 |
|
|
(1,122 |
) |
Impairment of intangible assets and internal use software |
4,585 |
|
|
23,473 |
|
Impairment of goodwill |
90,251 |
|
|
— |
|
Deferred
income taxes |
(1,564 |
) |
|
(6,635 |
) |
Changes
in operating assets and liabilities, net of effect of business
acquisitions: |
|
|
|
Accounts
receivable |
26,051 |
|
|
25,303 |
|
Prepaid
expenses and other assets |
(224 |
) |
|
(2,956 |
) |
Accounts
payable and accrued expenses |
(502 |
) |
|
(32,965 |
) |
Other
liabilities |
(477 |
) |
|
947 |
|
Net cash
provided by operating activities |
21,535 |
|
|
60,121 |
|
INVESTING
ACTIVITIES: |
|
|
|
Purchases
of property and equipment |
(32,438 |
) |
|
(23,479 |
) |
Capitalized internal use software development costs |
(7,988 |
) |
|
(9,922 |
) |
Acquisitions, net of cash acquired |
(38,610 |
) |
|
(238 |
) |
Investments in available-for-sale securities |
(95,224 |
) |
|
(41,096 |
) |
Maturities of available-for-sale securities |
81,050 |
|
|
37,360 |
|
Net cash
used in investing activities |
(93,210 |
) |
|
(37,375 |
) |
FINANCING
ACTIVITIES: |
|
|
|
Proceeds
from exercise of stock options |
394 |
|
|
14,249 |
|
Proceeds
from issuance of common stock under employee stock purchase
plan |
629 |
|
|
1,886 |
|
Taxes
paid related to net share settlement |
(2,403 |
) |
|
(6,058 |
) |
Net cash
provided by (used in) financing activities |
(1,380 |
) |
|
10,077 |
|
EFFECT OF EXCHANGE RATE
CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
199 |
|
|
(157 |
) |
CHANGE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
(72,856 |
) |
|
32,666 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH — Beginning of period |
149,498 |
|
|
116,832 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH — End of period |
$ |
76,642 |
|
|
$ |
149,498 |
|
SUPPLEMENTAL
DISCLOSURES OF OTHER CASH FLOW INFORMATION: |
|
|
|
Cash paid for income
taxes |
382 |
|
|
1,285 |
|
Cash paid for
interest |
61 |
|
|
61 |
|
Capitalized assets
financed by accounts payable and accrued expenses |
109 |
|
|
1,627 |
|
Capitalized stock-based
compensation |
443 |
|
|
952 |
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.RECONCILIATION OF REVENUE TO ADVERTISING SPEND
AND REVENUE TO NON-GAAP NET REVENUE(In
thousands)(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Revenue |
|
$ |
31,397 |
|
|
$ |
72,667 |
|
|
$ |
155,545 |
|
|
$ |
278,221 |
|
Plus
amounts paid to sellers(1) |
|
214,874 |
|
|
204,403 |
|
|
681,676 |
|
|
747,561 |
|
Advertising spend |
|
$ |
246,271 |
|
|
$ |
277,070 |
|
|
$ |
837,221 |
|
|
$ |
1,025,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Revenue |
|
$ |
31,397 |
|
|
$ |
72,667 |
|
|
$ |
155,545 |
|
|
$ |
278,221 |
|
Less
amounts paid to sellers reflected in cost of revenue(2) |
|
(16 |
) |
|
5,800 |
|
|
617 |
|
|
22,123 |
|
Non-GAAP net
revenue |
|
$ |
31,413 |
|
|
$ |
66,867 |
|
|
$ |
154,928 |
|
|
$ |
256,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts paid to sellers
for the portion of our revenue reported on a net basis for GAAP
purposes. |
(2) |
|
Amounts paid to sellers
for the portion of our revenue reported on a gross basis for GAAP
purposes. Before our acquisition of Chango in April 2015, we
recorded all revenue on a net basis and therefore payments to
sellers were not included in cost of revenue prior to April
2015. |
THE RUBICON PROJECT,
INC.RECONCILIATION OF NET INCOME (LOSS) TO
ADJUSTED EBITDA(In
thousands)(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Net loss |
|
$ |
(23,817 |
) |
|
$ |
(21,190 |
) |
|
$ |
(154,783 |
) |
|
$ |
(18,053 |
) |
Add back (deduct): |
|
|
|
|
|
|
|
|
Depreciation and amortization expense, excluding amortization of
acquired intangible assets |
|
7,810 |
|
|
7,206 |
|
|
31,443 |
|
|
22,224 |
|
Amortization of acquired intangibles |
|
1,261 |
|
|
6,195 |
|
|
4,782 |
|
|
20,539 |
|
Stock-based compensation expense |
|
4,316 |
|
|
6,646 |
|
|
20,504 |
|
|
28,694 |
|
Impairment of intangible assets and internal use software |
|
4,585 |
|
|
23,473 |
|
|
4,585 |
|
|
23,473 |
|
Impairment of goodwill |
|
— |
|
|
— |
|
|
90,251 |
|
|
— |
|
Acquisition and related items |
|
35 |
|
|
(1 |
) |
|
303 |
|
|
333 |
|
Interest
income, net |
|
(244 |
) |
|
(132 |
) |
|
(908 |
) |
|
(491 |
) |
Foreign
currency (gain) loss, net |
|
72 |
|
|
(601 |
) |
|
1,165 |
|
|
(939 |
) |
Provision
(Benefit) for income taxes |
|
(252 |
) |
|
121 |
|
|
(1,762 |
) |
|
(4,860 |
) |
Adjusted EBITDA |
|
$ |
(6,234 |
) |
|
$ |
21,717 |
|
|
$ |
(4,420 |
) |
|
$ |
70,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.RECONCILIATION OF NET INCOME (LOSS) TO
NON-GAAP NET INCOME (LOSS)(In
thousands)(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
Net loss |
|
$ |
(23,817 |
) |
|
$ |
(21,190 |
) |
|
$ |
(154,783 |
) |
|
$ |
(18,053 |
) |
Add back (deduct): |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
4,316 |
|
|
6,646 |
|
|
20,504 |
|
|
28,694 |
|
Impairment of intangible assets and internal use software |
|
4,585 |
|
|
23,473 |
|
|
4,585 |
|
|
23,473 |
|
Impairment of goodwill |
|
— |
|
|
— |
|
|
90,251 |
|
|
— |
|
Acquisition and related items, including amortization of acquired
intangibles |
|
1,296 |
|
|
6,194 |
|
|
5,085 |
|
|
20,872 |
|
Foreign
currency (gain) loss, net |
|
72 |
|
|
(601 |
) |
|
1,165 |
|
|
(939 |
) |
Tax
effect of Non-GAAP adjustments (1) |
|
(65 |
) |
|
3,620 |
|
|
(152 |
) |
|
(1,608 |
) |
Non-GAAP net income
(loss) |
|
$ |
(13,613 |
) |
|
$ |
18,142 |
|
|
$ |
(33,345 |
) |
|
$ |
52,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Non-GAAP
net income (loss) includes the estimated tax impact from the
expense items reconciling between net income and non-GAAP net
income. |
THE RUBICON PROJECT,
INC.RECONCILIATION OF GAAP EPS TO NON-GAAP
EPS(In thousands, except per share
amounts)(unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
GAAP net loss per share
(1): |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.48 |
) |
|
$ |
(0.44 |
) |
|
$ |
(3.17 |
) |
|
$ |
(0.39 |
) |
Diluted |
|
$ |
(0.48 |
) |
|
$ |
(0.44 |
) |
|
$ |
(3.17 |
) |
|
$ |
(0.39 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)(2) |
|
$ |
(13,613 |
) |
|
$ |
18,142 |
|
|
$ |
(33,345 |
) |
|
$ |
52,439 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of
weighted-average shares used to compute net loss per share to
non-GAAP weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Weighted-average shares
used to compute net loss per share: |
|
49,293 |
|
|
48,051 |
|
|
48,869 |
|
|
46,655 |
|
Dilutive
effect of weighted-average common stock options, RSAs, and
RSUs |
|
— |
|
|
749 |
|
|
— |
|
|
1,976 |
|
Dilutive
effect of weighted-average acquisition related escrow shares |
|
— |
|
|
— |
|
|
— |
|
|
392 |
|
Dilutive
effect of weighted-average ESPP |
|
— |
|
|
23 |
|
|
— |
|
|
30 |
|
Non-GAAP
weighted-average shares outstanding |
|
49,293 |
|
|
48,823 |
|
|
48,869 |
|
|
49,053 |
|
Non-GAAP earnings
(loss) per share |
|
$ |
(0.28 |
) |
|
$ |
0.37 |
|
|
$ |
(0.68 |
) |
|
$ |
1.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Calculated as net loss
divided by basic and diluted weighted-average shares used to
compute net loss per share as included in the consolidated
statement of operations. |
(2) |
|
Refer to reconciliation of
net loss to non-GAAP net income (loss). |
|
|
THE RUBICON PROJECT,
INC.REVENUE AND ADVERTISING SPEND BY
CHANNEL(In thousands, except
percentages)(unaudited) |
|
|
|
Revenue |
|
Advertising Spend |
|
|
Three Months Ended |
|
Three Months Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
|
|
(in thousands, except
percentages) |
Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Desktop |
|
$ |
15,371 |
|
|
49 |
% |
|
$ |
45,786 |
|
|
63 |
% |
|
$ |
129,777 |
|
|
53 |
% |
|
$ |
178,203 |
|
|
64 |
% |
Mobile |
|
16,026 |
|
|
51 |
|
|
26,881 |
|
|
37 |
|
|
116,494 |
|
|
47 |
|
|
98,867 |
|
|
36 |
|
Total |
|
$ |
31,397 |
|
|
100 |
% |
|
$ |
72,667 |
|
|
100 |
% |
|
$ |
246,271 |
|
|
100 |
% |
|
$ |
277,070 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
Advertising Spend |
|
|
Year Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
|
|
(in thousands, except
percentages) |
Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Desktop |
|
$ |
84,327 |
|
|
54 |
% |
|
$ |
181,407 |
|
|
65 |
% |
|
$ |
475,258 |
|
|
57 |
% |
|
$ |
684,782 |
|
|
67 |
% |
Mobile |
|
71,218 |
|
|
46 |
|
|
96,814 |
|
|
35 |
|
|
361,963 |
|
|
43 |
|
|
341,000 |
|
|
33 |
|
Total |
|
$ |
155,545 |
|
|
100 |
% |
|
$ |
278,221 |
|
|
100 |
% |
|
$ |
837,221 |
|
|
100 |
% |
|
$ |
1,025,782 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Rubicon Project (NYSE:RUBI)
Historical Stock Chart
From Mar 2024 to Apr 2024
The Rubicon Project (NYSE:RUBI)
Historical Stock Chart
From Apr 2023 to Apr 2024