Tremor Video, Inc. (NYSE:TRMR), a provider of software for video ad effectiveness, today announced record financial results for the fourth quarter and full year ended December 31, 2016, meeting or exceeding expectations across all metrics, including record quarterly Total Spend, revenue, gross profit, and Adjusted EBITDA.
The Company also announced that Bill Day, who has served as Tremor Video’s CEO since 2008, has decided to resign from his position, effective immediately. Mr. Day will continue to serve as a special advisor to the Company and its Board of Directors through June 1, 2017. Non-Executive Chairman of the Board and media industry veteran Paul Caine has been appointed Interim Chief Executive Officer, effective February 9, 2017, and will lead the search along with the Board for the new CEO of the Company. Mr. Day will also resign as a member of the Company’s Board, effective March 1, 2017.
Full Year 2016 Highlights:
- Total revenue of $166.8 million, down 4% year-over-year
- Record Total Spend1 of $254.2 million, up 25% year-over-year
- Record gross profit of $76.3 million, up 2% year-over-year
- Adjusted EBITDA2 of ($2.0) million
Fourth Quarter 2016 Highlights:
- Record revenue of $53.8 million, up 4% year-over-year
- Record Total Spend of $84.8 million, up 25% year-over-year
- Record gross profit of $24.3 million, up 7% year-over-year
- Record Adjusted EBITDA of $3.5 million
- Repurchased 2,062,124 shares during the fourth quarter
(1)We define Total Spend as the aggregate gross spend transacted through our platforms. Total Spend is a non-GAAP financial measure.Please see the discussion in the section called “Non-GAAP Financial Measures” and the reconciliations included at the end of thispress release.
(2)Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion in the section called “Non-GAAP Financial Measures” and the reconciliations included at the end of this press release.
“We are proud to be closing the year strong with solid growth in our Total Spend, and particularly programmatic spend, which increased 96% in 2016. The scaling of our programmatic business, combined with strong expense discipline, helped the Company deliver profitable EBITDA results for the quarter,” said Interim CEO Paul Caine. “We have a lot of momentum heading into 2017 and as we move forward we’re poised to continue to build on our industry-leading position as a provider of software for brand effectiveness."
Fourth Quarter and Full-Year Financial Results
The table below presents revenue, Total Spend, gross profit, net loss, Adjusted EBITDA and net loss per share for the three month and twelve month periods ended December 31, 2016 and December 31, 2015.
“On behalf of the board, we applaud Bill for his significant contributions during his eight years of service with the Company, and we are grateful for his efforts in building our leadership position in the video advertising marketplace. We reached many important milestones during Bill’s tenure and his expertise has guided the Company to a position of strength while setting us on a strong path for sustainable profitability and future growth,” said Mr. Caine.
Paul Caine has deep industry experience and knowledge of Tremor Video’s business, having served on the Board and as a member of its Audit Committee since 2014, and as its Non-Executive Chairman since July 2016. Mr. Caine has previously held positions as the Global Chief Revenue and Client Partnerships Officer for Bloomberg Media and as CEO of WestwoodOne as well as several executive roles at Time Inc. While serving as Interim CEO, Mr. Caine will remain a member of the Company’s Board, but will step down from his roles with the Audit Committee and as Non-Executive Chairman.
The Company’s Board has engaged the executive search firm Heidrick & Struggles to assist in the search for Mr. Day’s replacement.
Bill Day commented, “Tremor Video’s innovative software platforms strongly position it to capitalize on two of the largest advertising growth trends, programmatic video buying and selling, and the increasing flow of spend from linear TV into digital video. As evident in today’s results, the Company is on a positive trajectory towards combined growth and profitability. It’s been a true team effort, and I fully expect that this team will continue to deliver strong outcomes during this transition.
Q4 and Full Year 2016 Financial Results Webcast: Tremor Video will host a conference call today at 8:00 a.m. ET to discuss its fourth quarter financial results. A live webcast of the event will be available on the Tremor Video Investor Relations website at http://investor.tremorvideo.com. A live domestic dial-in is available at (877) 407-9039 or internationally at (201) 689-8470. Until February 16, 2017, a domestic replay will be available at (844) 512-2921 or internationally at (412) 317-6671, using passcode 13652701, and via webcast on the Tremor Video Investor Relations website.
About Tremor Video: Tremor Video (NYSE: TRMR) provides software for video advertising effectiveness. Our buyer and seller platforms enable seamless transactions in a premium video marketplace by offering control and transparency to clients. We employ patented all-screen technology to make every advertising moment more relevant for consumers, and deliver maximum results for buyers and sellers.
“Safe Harbor" Statement: This press release contains forward-looking statements that involve risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those set forth in or implied by such forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements related to Tremor Video’s future financial results, growth potential, or future profitability, including 2017 full year financial guidance and statements with respect to future revenue mix or the development or adoption of the company’s solutions. Important factors that could cause actual results or the timing of events to differ materially from those set forth in or implied by any forward-looking statements include, without limitation, risks and uncertainties associated with: the company’s continuing development of its business model; unfavorable conditions in the global economy or reductions in digital advertising spend; the company’s ability to effectively innovate and adapt to rapidly changing technology and client needs; increased competition as well as innovations by new and existing competitors; expansion of the online video advertising market; the company’s ability to attract new advertisers and increase spend from existing advertisers; the company’s ability to attract advertising spend from TV media buyers; risks of entering new markets in which we have limited or no experience and difficulty adapting our solutions for new markets; adoption of brand-centric metrics, advanced ad formats and performance-based pricing models by advertisers; the company’s ability to effectively deliver video ad campaigns with demo guarantees; the rate of decline of the company’s non-programmatic media network; adoption of the company’s programmatic solutions by advertisers and publishers; adoption of the company’s All-Screen product and other higher-function buying products by advertisers; the company’s ability to acquire an adequate supply of premium video advertising inventory from publishers on terms that are favorable to it; the company’s ability to detect fraudulent or malicious activity and ensure a high level of brand safety for its clients; identifying, attracting and retaining qualified personnel, including a successor CEO; defects, errors or interruptions in the company’s solutions; the company’s ability to collect and use data to deliver video ads; the impact of tools that block the display of video ads; the effect of regulatory developments and industry standards regarding internet privacy and other matters; maintaining, protecting and enhancing the company’s intellectual property; costs associated with defending intellectual property infringement, securities litigation and other claims; future opportunities and plans, including the uncertainty of expected future financial performance and results; as well as other risks and uncertainties detailed from time-to-time under the caption “Risk Factors” and elsewhere in Tremor Video’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2015, filed with the U.S. Securities and Exchange Commission on March 15, 2016, its Quarterly Reports on Form 10-Q for the periods ended March 31, 2016, June 30, 2016, and September 30, 2016, and future filings and reports by the company, including its Annual Report on Form 10-K for the year ended December 31, 2016.
Forward-looking statements are based on current expectations and beliefs and are not guarantees of future performance or events. Investors are cautioned not to place undue reliance on any forward-looking statements. Furthermore, forward-looking statements speak only as of the date on which they are made, and, except as required by law, Tremor Video disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
Non-GAAP Financial Measures: To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), Tremor Video reports Total Spend and Adjusted EBITDA, which are non-GAAP financial measures. We define Total Spend as the aggregate gross spend transacted through our platforms. Total Spend does not represent revenue earned by us. Within Total Spend, we closely monitor the percentage contributions among the following operational metrics: programmatic; non-programmatic higher function; and non-programmatic media. Programmatic includes all spend attributable to the Tremor Video SSP, Tremor Video DSP and agency trading desks. We define non-programmatic higher-function as non-programmatic spend running through our buyer platform that utilizes our higher-function products, including our All-Screen optimization solution, our advanced data targeting solutions, and our proprietary outcome-based pricing models. We define non-programmatic media as non-programmatic spend running through our buyer platform that is purchased without any of our higher-function products. We track these operational metrics in order to better understand how our clients are transacting on our platforms, which informs decisions as to the allocation of resources and capital. We define Adjusted EBITDA as net loss plus (minus): interest expense and other income (expense), net, provision for income taxes, depreciation and amortization expense, non-cash stock-based compensation expense, non-cash stock-based long-term incentive compensation, executive severance costs, acquisition related costs, litigation costs associated with class action securities litigation, mark-to-market expense, impairment charges, and other adjustments. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about our operating results, enhance the overall understanding of our past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Non-GAAP financial measures should be considered in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP financial measures included in this press release have been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release. With respect to our expectations under “Guidance” above, reconciliation of Total Spend and 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 these non-GAAP measures, in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of these costs and charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Investor Relations Contact: