TELARIA REPORTS FOURTH QUARTER 2019 FINANCIAL RESULTS
Full year revenue of $68.0 million; driven by CTV revenue of $29.7 million, up 99% year-over-year
NEW YORK, NY - March 10, 2020 - Telaria, Inc. (NYSE:TLRA), the complete software platform that optimizes yield for leading video publishers, today announced financial results for the quarter December 31, 2019.
Fourth Quarter 2019 Highlights:
| • | Revenue of $19.6 million |
| • | CTV revenue of $10.1 million |
| • | Loss from continuing operations, net of income taxes $(0.4) million |
| • | Adjusted EBITDA(1) of $2.7 million |
Full Year 2019 Highlights:
| • | Revenue of $68.0 million |
| • | CTV revenue of $29.7 million |
| • | Loss from continuing operations, net of income taxes $(9.0) million |
| • | Adjusted EBITDA(1) of $1.0 million |
| • | Merger with Rubicon Project on track to close in early April 2020 |
| (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. |
Q1 2020 Outlook
Based on information available as of March 10, 2020, the Company expects Q1 2020 revenue of $15.0 - $16.0 million, with CTV revenue expected to represent the majority of revenue at $8.5-$9.5 million, implying a year-over-year increase in CTV revenue of 63%-82%.
"Our CTV business continues to drive our results, growing nearly 100% year-over-year, outperforming our expectations for the fourth quarter and the full year. As we look ahead, the market tailwinds powering CTV show no signs of abating and our platform is extremely well positioned to capitalize on these trends and capture market share,” said Mark Zagorski, Telaria CEO. “Additionally, our integration planning activities for our merger with The Rubicon Project are proceeding well. Clients, partners and employees are excited about aligning capabilities to become the world's largest independent omnichannel sell-side advertising platform.”
Fourth Quarter and Full-Year Results Summary (unaudited)
(in millions, unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, 2019 | December 31, 2018 | % Change | December 31, 2019 | December 31, 2018 | % Change | |||||||||||||||||||
| Revenue | $ | 19.6 | $ | 19.7 | (0.01 | )% | $ | 68.0 | $ | 55.2 | 23 | % | ||||||||||||
| Gross profit | $ | 15.3 | $ | 16.8 | (9 | )% | $ | 54.4 | $ | 48.3 | 13 | % | ||||||||||||
| Income (loss) from continuing operations, net of income taxes | $ | (0.4 | ) | $ | 1.4 | NM | $ | (9.0 | ) | $ | (9.2 | ) | 2 | % | ||||||||||
| Adjusted EBITDA | $ | 2.7 | $ | 4.0 | (33 | )% | $ | 1.0 | $ | (0.4 | ) | NM | ||||||||||||
About Telaria
Telaria, Inc. (NYSE:TLRA) powers the future of TV advertising with proprietary, programmatic software that optimizes ad yield for leading video publishers, enabling the most effective advertising experience across desktop, mobile and CTV. Telaria’s clients include the most innovative video content publishers across the globe such as Hulu, SlingTV, Viacom’s PlutoTV, TubiTV, Singtel, and Australia’s Channel Nine and Channel Ten.
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Telaria is headquartered in New York City and supports its global client base out of 13 offices worldwide across North America, EMEA, LATAM and APAC.
“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 our Q1 2020 outlook and any anticipated benefits arising from the previously announced stock-for-stock merger with The Rubicon Project, Inc. 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 ability to close the merger with Rubicon Project and realize the anticipated benefits of the merger; 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 programmatic 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; growth of ad-supported CTV and the shift in video consumption from linear TV to digital mediums such as CTV; political uncertainty and the ability of the company to attract political advertising; 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 adoption of programmatic advertising by CTV publishers; the impact of increased transparency in programmatic transactions executed through our platform; 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, use and process 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, including shareholder litigation relating to the merger with Rubicon Project; 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, 2018, filed with the U.S. Securities and Exchange Commission on March 19, 2019, its Quarterly Report on Form 10-Q for the period ended March 31, 2019 filed with the U.S Securities and Exchange Commission on May 9, 2019, its quarterly Report on Form 10-Q for the period ended June 30, 2019 filed with the U.S Securities and Exchange Commission on August 8, 2019, its Quarterly Report on Form 10-Q for the period ended September 30, 2019, filed with the U.S. Securities and Exchange Commission on November 6, 2019, our Definitive Proxy Statement filed with the U.S. Securities and Exchange Commission on February 13, 2020, and future filings by us, including our Annual Report on Form 10-K for the year ended December 31, 2019.
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, the Company disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
(1) 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”), the Company reports Adjusted EBITDA, which is a non-GAAP financial measure. The Company defines Adjusted EBITDA as our income (loss) from continuing operations, net of income taxes, before depreciation and amortization expense, total interest and other income (expense), net and provision for income taxes, and as adjusted to eliminate the impact of non-cash stock-based compensation expense, acquisition related costs, transaction costs, expenses for prior corporate facilities required to be recorded as operating expenses as a result of the adoption of certain accounting standards, mark-to-market expense, executive severance, retention and recruiting costs, expenses for transitional services 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.
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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
646-226-0254
lrao@telaria.com
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Exhibit A
Telaria, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
| December 31, | ||||||||
| 2019 | 2018 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 54,164 | $ | 47,659 | ||||
| Accounts receivable, net allowance for doubtful accounts of $1,288 and $982 as of December 31, 2019 and December 31, 2018 respectively | 157,317 | 104,387 | ||||||
| Prepaid expenses and other current assets | 4,605 | 3,381 | ||||||
| Total current assets | 216,086 | 155,427 | ||||||
| Long-term assets: | ||||||||
| Operating lease right-of-use asset, net of amortization | 23,793 | — | ||||||
| Property and equipment, net | 1,990 | 2,789 | ||||||
| Intangible assets, net | 3,548 | 4,379 | ||||||
| Goodwill | 9,403 | 9,478 | ||||||
| Other assets | 2,030 | 2,633 | ||||||
| Total long-term assets | 40,764 | 19,279 | ||||||
| Total assets | $ | 256,850 | $ | 174,706 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 168,818 | $ | 109,991 | ||||
| Operating lease liability | 5,487 | — | ||||||
| Deferred rent | — | 797 | ||||||
| Contingent consideration on acquisition | — | 1,500 | ||||||
| Other current liabilities | 349 | 886 | ||||||
| Total current liabilities | 174,654 | 113,174 | ||||||
| Long-term liabilities: | ||||||||
| Operating lease liability, net of current portion | 24,046 | — | ||||||
| Deferred rent | — | 5,759 | ||||||
| Deferred tax liabilities | 1,050 | 1,153 | ||||||
| Other liabilities | 323 | 225 | ||||||
| Total liabilities | 200,073 | 120,311 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock | 4 | 4 | ||||||
| Treasury stock | (31,980 | ) | (31,980 | ) | ||||
| Additional paid-in capital | 304,781 | 293,154 | ||||||
| Accumulated other comprehensive loss | (1,187 | ) | (949 | ) | ||||
| Accumulated deficit | (214,841 | ) | (205,834 | ) | ||||
| Total stockholders’ equity | 56,777 | 54,395 | ||||||
| Total liabilities and stockholders’ equity | $ | 256,850 | $ | 174,706 | ||||
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Telaria, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue | $ | 19,636 | $ | 19,656 | $ | 68,038 | $ | 55,165 | ||||||||
| Cost of revenue | 4,287 | 2,812 | 13,625 | 6,844 | ||||||||||||
| Gross profit | 15,349 | 16,844 | 54,413 | 48,321 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Technology and development(1) | 2,609 | 2,881 | 11,140 | 9,925 | ||||||||||||
| Sales and marketing(1) | 5,718 | 6,646 | 25,503 | 25,424 | ||||||||||||
| General and administrative(1) | 7,996 | 5,517 | 29,200 | 20,187 | ||||||||||||
| Restructuring costs | — | — | — | 149 | ||||||||||||
| Depreciation and amortization | 333 | 507 | 1,486 | 3,705 | ||||||||||||
| Mark-to-market(2) | — | 57 | — | 57 | ||||||||||||
| Total operating expenses | 16,656 | 15,608 | 67,329 | 59,447 | ||||||||||||
| Income (loss) from continuing operations | (1,307 | ) | 1,236 | (12,916 | ) | (11,126 | ) | |||||||||
| Interest income (expense) and other income (expense), net: | ||||||||||||||||
| Interest income (expense) | 2 | (15 | ) | — | (89 | ) | ||||||||||
| Other income | 1,287 | 58 | 4,385 | 1,975 | ||||||||||||
| Total interest expense and other income (expense), net | 1,289 | 43 | 4,385 | 1,886 | ||||||||||||
| Income (loss) from continuing operations before income taxes | (18 | ) | 1,279 | (8,531 | ) | (9,240 | ) | |||||||||
| Provision (benefit) from income taxes | 372 | (156 | ) | 476 | (10 | ) | ||||||||||
| Income (loss) from continuing operations, net of income taxes | (390 | ) | 1,435 | (9,007 | ) | (9,230 | ) | |||||||||
| Loss on sale of discontinued operations, net of income taxes | — | — | — | (136 | ) | |||||||||||
| Net income (loss) | $ | (390 | ) | $ | 1,435 | $ | (9,007 | ) | $ | (9,366 | ) | |||||
| Net income (loss) per share - basic | ||||||||||||||||
| Income (loss) from continuing operations, net of income taxes | $ | (0.01 | ) | $ | 0.03 | $ | (0.20 | ) | $ | (0.18 | ) | |||||
| Net income (loss) | $ | (0.01 | ) | $ | 0.03 | $ | (0.20 | ) | $ | (0.18 | ) | |||||
| Net income (loss) per share - diluted | ||||||||||||||||
| Income (loss) from continuing operations, net of income taxes | $ | (0.01 | ) | $ | 0.03 | $ | (0.20 | ) | $ | (0.18 | ) | |||||
| Net income (loss) | $ | (0.01 | ) | $ | 0.03 | $ | (0.20 | ) | $ | (0.18 | ) | |||||
| Weighted-average number of shares of common stock outstanding: | ||||||||||||||||
| Basic | 46,710,402 | 50,278,668 | 45,864,500 | 51,764,506 | ||||||||||||
| Diluted | 46,710,402 | 51,266,321 | 45,864,500 | 51,764,506 | ||||||||||||
(1) Stock-based compensation expenses included above:
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Telaria, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Stock-based compensation expense: | ||||||||||||||||
| Technology and development | $ | 174 | $ | 122 | $ | 818 | $ | 492 | ||||||||
| Sales and marketing | 292 | 415 | 2,196 | 1,470 | ||||||||||||
| General and administrative | 321 | 514 | 2,745 | 1,858 | ||||||||||||
| Total in continuing operations | $ | 787 | $ | 1,051 | $ | 5,759 | $ | 3,820 | ||||||||
(2) Reflects expense incurred based on the Company’s re-measurement of the estimated fair value of certain earn-out payments that were paid in connection with the acquisition of SlimCut.
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Telaria, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Years Ended December 31, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss from continuing operations, net of income taxes | $ | (9,007 | ) | $ | (9,230 | ) | ||
| Net loss from discontinued operations, net of income taxes | — | (136 | ) | |||||
| Adjustments required to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization expense | 1,486 | 3,705 | ||||||
| Amortization of acquired technology | 190 | — | ||||||
| Bad debt expense | 27 | 190 | ||||||
| Amortization of right-of-use asset | 4,035 | — | ||||||
| Deferred tax benefit (liability) | 6 | (4 | ) | |||||
| Loss on disposal of property and equipment | 145 | 21 | ||||||
| Stock based compensation expense | 5,759 | 3,820 | ||||||
| Net change in operating assets and liabilities: | ||||||||
| Increase in accounts receivable | (53,616 | ) | (43,283 | ) | ||||
| Increase in prepaid expenses, other current assets and other long-term assets | (2,087 | ) | (1,781 | ) | ||||
| Increase in accounts payable and accrued expenses | 59,407 | 48,779 | ||||||
| Increase in other current liabilities | 710 | 322 | ||||||
| Decrease in operating lease liability | (4,788 | ) | — | |||||
| Increase in deferred rent and security deposits payable | 7 | 488 | ||||||
| Decrease in deferred income | — | (619 | ) | |||||
| Increase (decrease) in other liabilities | 100 | (512 | ) | |||||
| Net cash provided by operating activities | 2,374 | 1,760 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (253 | ) | (2,740 | ) | ||||
| Purchase of patents not subject to amortization | (41 | ) | — | |||||
| Acquisition, net of cash acquired | — | (4,771 | ) | |||||
| Net cash used in investing activities | (294 | ) | (7,511 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock under employee stock purchase plan | 511 | 523 | ||||||
| Decrease in contingent consideration on acquisition | (1,500 | ) | — | |||||
| Proceeds from the exercise of stock option awards | 6,749 | 1,845 | ||||||
| Treasury stock — repurchase of stock | — | (23,537 | ) | |||||
| Tax withholdings related to net share settlements of restricted stock units | (1,391 | ) | (1,312 | ) | ||||
| Net cash provided by (used in) financing activities | 4,369 | (22,481 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 6,449 | (28,232 | ) | |||||
| Effect of exchange rate changes in cash and cash equivalents | 56 | (429 | ) | |||||
| Cash, cash equivalents at beginning of year | 47,659 | 76,320 | ||||||
| Cash, cash equivalents at end of year | $ | 54,164 | $ | 47,659 | ||||
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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, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Income (loss) from continuing operations, net of income taxes | $ | (390 | ) | $ | 1,435 | $ | (9,007 | ) | $ | (9,230 | ) | |||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization expense | 379 | 507 | 1,676 | 3,705 | ||||||||||||
| Total interest and other income (expense), net(1) | (1,290 | ) | (43 | ) | (4,385 | ) | (1,886 | ) | ||||||||
| Provision (benefit) for income taxes | 373 | (156 | ) | 476 | (10 | ) | ||||||||||
| Stock-based compensation expense | 787 | 1,051 | 5,759 | 3,820 | ||||||||||||
| Acquisition-related costs(2) | — | 81 | — | 483 | ||||||||||||
| Transaction costs(3) | 1,715 | — | 1,715 | — | ||||||||||||
| Expenses for prior corporate facilities(4) | 1,082 | — | 4,212 | — | ||||||||||||
| Mark-to market expense(5) | — | 57 | — | 57 | ||||||||||||
| Executive severance, retention and recruiting costs(6) | 84 | 616 | 557 | 839 | ||||||||||||
| Expenses for transitional services(7) | — | — | — | 697 | ||||||||||||
| Other adjustments(8) | — | 453 | — | 1,165 | ||||||||||||
| Total net adjustments | 3,130 | 2,566 | 10,010 | 8,870 | ||||||||||||
| Adjusted EBITDA | $ | 2,740 | $ | 4,001 | $ | 1,003 | $ | (360 | ) | |||||||
(1) For the three months and year ended December 31 2019, includes other income (expense), net and only sublease income (not sublease expense) for our former office locations due to the adoption of ASC 842. During three months and year ended December 31, 2018, includes other income (expense), net and sublease income and sublease expense. In addition for the year ended December 31, 2018, includes income received from the transfer of rights in the name "Tremor Video".
(2) For the three months and year ended December 31, 2018, reflects acquisition-related costs incurred in connection with our acquisition of SlimCut Media ("SlimCut") in June 2018.
(3) For the three months and year ended December 31, 2019, reflects the transaction costs incurred as a result of the merger with The Rubicon Project that is expected to close in April 2020.
(4) For the three months and year ended December 31, 2019, reflects lease costs for prior corporate facilities, previously recorded in interest and other income (expenses), which are now required to be recorded in operating expenses as a result of the adoption of ASC 842.
(5) For the three months and year ended December 31, 2018, reflects expense incurred based on the re-measurement of the estimated fair value of earn-out payments paid in connection with the acquisition of SlimCut.
(6) Reflects certain executive severance, recruiting and retention costs.
(7) Reflects costs incurred providing transitional services following the sale of our buyer platform.
(8) For the three months and year ended December 31, 2018, includes rent expense for our current corporate headquarters during the period of time in which such space was unoccupied as well as expenses relating to the reversal of certain capitalized professional fees.
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