Rubicon Project (NYSE:RUBI), the global exchange for
advertising, today reported its results of operations for the third
quarter of 2017.
Recent Highlights
- Buy side transaction fees eliminated effective November 1,
2017.
- Prebid beta version launched as a server-side header bidding
solution.
- Google’s DoubleClick Bid Manager has integrated Rubicon
Project’s Private Marketplace (PMP) deals directly into the Bid
Manager interface, making Rubicon Project the first third party
exchange to offer PMPs through Bid Manager.
- Auction dynamics tests underway to evaluate first-price
auctions in header bidding.
- nToggle acquisition for $38.6 million in cash closed during the
quarter. Rollout of technology underway to help DSPs identify and
target key audiences more effectively, win more auctions and reduce
capital expenditures to keep up with explosion of bid requests
driven by header bidding.
- Revenue was $35.2 million, compared to $65.8 million for the
third quarter of 2016; non-GAAP net revenue(1) was also $35.2
million, compared to $60.6 million for the third quarter of
2016.
- Net loss(2) was $103.6 million, or loss per share(2) of $2.11,
compared to net income of $3.5 million, or income per share of
$0.07 for the third quarter of 2016. The net loss for the third
quarter of 2017 included a $90.3 million non-cash goodwill
impairment charge.
- Adjusted EBITDA(1) was a negative $2.3 million, compared to
Adjusted EBITDA of $15.3 million for the third quarter of
2016.
- Non-GAAP loss per share(1)(2) was $0.14, compared to $0.20
earnings per share for the third quarter of 2016.
“We continued to take additional actions, specifically changes
to our auction dynamics and elimination of our buy side transaction
fees, in support of our clear strategy to increase supply, improve
win rates and be the most valuable and efficient marketplace in a
very competitive market,” said Michael G. Barrett, President and
CEO of Rubicon Project. “The combination of recent improvements
with nToggle, elimination of our buyer fees, our improved auction
dynamics, commitment to transparency, leadership in server-side
header bidding, plus our long-term commitment to quality and trust,
continue to differentiate us as the leading exchange of choice for
DSPs and publishers.”
|
Third Quarter 2017 Results Summary |
(in
millions, except per share amounts and percentages) |
|
|
Three Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
Change |
Revenue |
|
$35.2 |
|
|
$65.8 |
|
|
(47 |
)% |
Advertising spend(1) |
|
$195.0 |
|
|
$242.8 |
|
|
(20 |
)% |
Non-GAAP
net revenue(1) |
|
$35.2 |
|
|
$60.6 |
|
|
(42 |
)% |
Take
rate(4) |
|
|
18.1 |
% |
|
|
24.9 |
% |
|
(680 bps) |
Net
income (loss) (2) |
|
($103.6 |
) |
|
$3.5 |
|
|
nm |
Adjusted
EBITDA(1) |
|
($2.3 |
) |
|
$15.3 |
|
|
(115 |
)% |
Adjusted
EBITDA margin(3) |
|
|
(7 |
%) |
|
|
25 |
% |
|
(32 ppt) |
Basic and
diluted income (loss) per share (2) |
|
|
($2.11 |
) |
|
$0.07 |
|
|
nm |
Non-GAAP
earnings (loss) per share(1)(2) |
|
|
($0.14 |
) |
|
$0.20 |
|
|
(170 |
)% |
Definitions: |
(1 |
) |
Non-GAAP net revenue,
Adjusted EBITDA, non-GAAP earnings (loss) per share, and
advertising spend 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 |
) |
Net income (loss),
diluted income (loss) per share and non-GAAP earnings (loss) per
share for the third quarter 2017 and third quarter 2016 include a
tax benefit of $2.0 million and a tax provision of $0.5 million,
respectively. In addition, non-GAAP earnings (loss) per share
includes the tax effect of non-GAAP adjustments for the third
quarter 2017 and third quarter of 2016 resulting in provision of
$0.1 million and $6.1 million, respectively. |
(3 |
) |
Adjusted EBITDA margin
is calculated as Adjusted EBITDA divided by revenue (or for periods
in which we have revenue reported on a gross basis, by non-GAAP net
revenue). Reconciliations for both net income (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." |
(4 |
) |
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. 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 our strategic pricing
decisions, including strategic fee reductions we implemented during
the first half of 2017 and elimination of our buyer transaction
fees as of November 1, and additional fee reductions or alternative
pricing models we may implement in the future; and the overall
development of the digital advertising ecosystem. |
(nm |
) |
not meaningful |
|
|
Third Quarter 2017 Results Conference Call and
Webcast:
The Company will host a conference call on November 2, 2017
at 1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its third
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: |
10113478 |
Webcast link: |
http://investor.rubiconproject.com, under "Events and
Presentations" |
About Rubicon ProjectFounded 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,
profitability, net income (loss), Adjusted EBITDA, earnings per
share, and cash flow; strategic objectives, including focus on
header bidding, mobile, video, Orders, 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; scope and duration of client relationships; the fees we
may charge in the future; business mix; sales growth; client
utilization of our offerings; our competitive differentiation; our
leadership position in the industry; our market share, market
conditions, trends, and opportunities; user reach; certain
statements regarding future operational performance measures
including ad requests, fill rate, advertising spend, take rate,
paid impressions, and average CPM; 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 and to manage any growth
effectively; 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; our
header bidding solution not resulting in revenue growth and causing
infrastructure strain and added cost; uncertainty of our estimates
and expectations associated with new offerings, including header
bidding, private marketplace, mobile, video, Orders, automated
guaranteed, and guaranteed audience solutions, and traffic shaping;
declining fees and take rate, including as a result of
implementation of alternative pricing models in response to market
pressures, including demands for reduction or elimination of buyer
fees, and the need to grow through advertising spend and fill rate
increases rather than pricing increases; our ability to compensate
for declining take rate by increasing the volume of transactions on
our platform; our vulnerability to the depletion of our cash
resources as revenue declines with the reduction of 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 raise additional capital; 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 and formats;
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 the 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,"
"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 our Annual Report on Form 10-K for
the year ended December 31, 2016 and subsequent Quarterly Reports
on Form 10-Q. These forward-looking statements represent our
estimates and assumptions only as of the date 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.
Advertising Spend:
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
facilitates comparison of our results to the results of companies
in our industry that report GAAP revenue on a gross basis. We also
use advertising spend for internal management purposes to assess
market share of total advertising spending. Advertising spend may
fluctuate due to seasonality and increases or decreases in paid
impressions, CPM, and fees. In the past, we have experienced higher
advertising spend during the fourth quarter of a given year
resulting from higher advertiser budgets and more bidding activity
on our platform, which may drive higher volumes of paid impressions
or average CPM. However, lower buyer fees reduce advertising spend,
and expected seasonal increases in ad spend in the fourth quarter
of 2017 may not be enough to compensate for decreased take rates
resulting from elimination of our buyer transaction fees on
November 1, 2017, in which case we would not experience a holiday
season fourth quarter revenue uplift this year. Advertising spend
during the nine months ended September 30, 2017 has decreased $158
million compared to the nine months ended September 30, 2016,
primarily due to market and competitive pressures, deceleration in
traditional desktop display spending, header bidding dynamics and
decreases in our fees. The elimination of our buyer transaction
fees on November 1, 2018 will result in further
decreases in advertising spend in the fourth quarter of 2017
and into 2018 absent compensating increases in transaction activity
on our platform.
Non-GAAP Net Revenue:
We define non-GAAP net revenue as GAAP revenue less amounts paid
to 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 gross revenue reporting that
we applied to transactions under the intent marketing business that
we exited in the first quarter of 2017, 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 solution. Because we exited that business
in the first quarter of 2017, we do not expect any difference
between revenue and non-GAAP net revenue unless and until changes
in our business or applicable accounting standards require gross
reporting for at least some of our revenue. Elimination of
our buyer transaction fees on November 1, 2017 will
reduce our take rate, resulting in reduced non-GAAP net revenue in
the fourth quarter of 2017 and into 2018 absent compensating
increases in transaction activity on our platform.
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. 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 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 fluctuations 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.
Non-GAAP Net Income (Loss) and Non-GAAP Earnings (Loss)
per Share:
We define non-GAAP earnings (loss) 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 (loss) 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 (loss) 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 (loss) per share is that other
companies may define non-GAAP earnings (loss) 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 (loss) 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.CONDENSED CONSOLIDATED BALANCE
SHEETS(In
thousands)(unaudited) |
|
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
99,525 |
|
|
$ |
149,423 |
|
Marketable securities |
|
39,480 |
|
|
40,550 |
|
Accounts
receivable, net |
|
132,958 |
|
|
192,064 |
|
Prepaid
expenses and other current assets |
|
10,500 |
|
|
9,540 |
|
TOTAL CURRENT ASSETS |
|
282,463 |
|
|
391,577 |
|
Property and equipment,
net |
|
37,448 |
|
|
36,246 |
|
Internal use software
development costs, net |
|
13,617 |
|
|
16,522 |
|
Other assets,
non-current |
|
3,239 |
|
|
2,921 |
|
Intangible assets,
net |
|
18,122 |
|
|
6,804 |
|
Goodwill |
|
— |
|
|
65,705 |
|
TOTAL ASSETS |
|
$ |
354,889 |
|
|
$ |
519,775 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
165,783 |
|
|
$ |
214,903 |
|
Other
current liabilities |
|
3,046 |
|
|
3,534 |
|
TOTAL CURRENT LIABILITIES |
|
168,829 |
|
|
218,437 |
|
Deferred tax liability,
net |
|
42 |
|
|
42 |
|
Other liabilities,
non-current |
|
1,817 |
|
|
1,783 |
|
TOTAL LIABILITIES |
|
170,688 |
|
|
220,262 |
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
Additional paid-in
capital |
|
414,081 |
|
|
398,787 |
|
Accumulated other
comprehensive loss |
|
87 |
|
|
(273 |
) |
Accumulated
deficit |
|
(229,967 |
) |
|
(99,001 |
) |
TOTAL STOCKHOLDERS'
EQUITY |
|
184,201 |
|
|
299,513 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
$ |
354,889 |
|
|
$ |
519,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Revenue |
|
$ |
35,211 |
|
|
$ |
65,811 |
|
|
$ |
124,148 |
|
|
$ |
205,554 |
|
Expenses (1)(2): |
|
|
|
|
|
|
|
|
Cost of
revenue |
|
12,985 |
|
|
17,798 |
|
|
41,371 |
|
|
52,121 |
|
Sales and
marketing |
|
12,503 |
|
|
21,635 |
|
|
39,660 |
|
|
64,879 |
|
Technology and development |
|
11,580 |
|
|
12,513 |
|
|
36,377 |
|
|
38,250 |
|
General
and administrative |
|
13,644 |
|
|
16,238 |
|
|
43,079 |
|
|
53,233 |
|
Restructuring and other exit costs |
|
— |
|
|
— |
|
|
5,959 |
|
|
— |
|
Impairment of goodwill |
|
90,251 |
|
|
— |
|
|
90,251 |
|
|
— |
|
Total expenses |
|
140,963 |
|
|
68,184 |
|
|
256,697 |
|
|
208,483 |
|
Loss from
operations |
|
(105,752 |
) |
|
(2,373 |
) |
|
(132,549 |
) |
|
(2,929 |
) |
Other (income)
expense: |
|
|
|
|
|
|
|
|
Interest
income, net |
|
(269 |
) |
|
(134 |
) |
|
(664 |
) |
|
(359 |
) |
Other
income |
|
(123 |
) |
|
(191 |
) |
|
(502 |
) |
|
(388 |
) |
Foreign
exchange (gain) loss, net |
|
242 |
|
|
(21 |
) |
|
1,093 |
|
|
(338 |
) |
Total other income,
net |
|
(150 |
) |
|
(346 |
) |
|
(73 |
) |
|
(1,085 |
) |
Loss before income
taxes |
|
(105,602 |
) |
|
(2,027 |
) |
|
(132,476 |
) |
|
(1,844 |
) |
Benefit
for income taxes |
|
(2,031 |
) |
|
(5,557 |
) |
|
(1,510 |
) |
|
(4,981 |
) |
Net income (loss) |
|
$ |
(103,571 |
) |
|
$ |
3,530 |
|
|
$ |
(130,966 |
) |
|
$ |
3,137 |
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.11 |
) |
|
$ |
0.07 |
|
|
$ |
(2.69 |
) |
|
$ |
0.07 |
|
Diluted |
|
$ |
(2.11 |
) |
|
$ |
0.07 |
|
|
$ |
(2.69 |
) |
|
$ |
0.06 |
|
Weighted-average shares
used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
Basic |
|
49,055 |
|
|
47,538 |
|
|
48,726 |
|
|
46,186 |
|
Diluted |
|
49,055 |
|
|
48,683 |
|
|
48,726 |
|
|
49,126 |
|
(1) Stock-based
compensation expense included in our expenses was as follows: |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Cost of revenue |
|
$ |
115 |
|
|
$ |
91 |
|
|
$ |
295 |
|
|
$ |
261 |
|
Sales and
marketing |
|
1,115 |
|
|
2,054 |
|
|
3,524 |
|
|
6,711 |
|
Technology and
development |
|
1,122 |
|
|
1,287 |
|
|
3,178 |
|
|
4,461 |
|
General and
administrative |
|
2,294 |
|
|
3,099 |
|
|
7,631 |
|
|
10,615 |
|
Restructuring and other
exit costs |
|
— |
|
|
— |
|
|
1,560 |
|
|
— |
|
Total stock-based
compensation expense |
|
$ |
4,646 |
|
|
$ |
6,531 |
|
|
$ |
16,188 |
|
|
$ |
22,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Depreciation
and amortization expense included in our expenses was as
follows: |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Cost of revenue |
|
$ |
7,221 |
|
|
$ |
7,010 |
|
|
$ |
23,645 |
|
|
$ |
19,678 |
|
Sales and
marketing |
|
135 |
|
|
2,736 |
|
|
888 |
|
|
6,298 |
|
Technology and
development |
|
615 |
|
|
692 |
|
|
1,612 |
|
|
1,896 |
|
General and
administrative |
|
207 |
|
|
516 |
|
|
1,009 |
|
|
1,490 |
|
Total depreciation and
amortization expense |
|
$ |
8,178 |
|
|
$ |
10,954 |
|
|
$ |
27,154 |
|
|
$ |
29,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In
thousands)(unaudited) |
|
|
|
Nine Months Ended |
|
September 30, 2017 |
|
September 30, 2016 |
OPERATING
ACTIVITIES: |
|
|
|
Net
income (loss) |
$ |
(130,966 |
) |
|
$ |
3,137 |
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: |
|
|
|
Depreciation and amortization |
27,154 |
|
|
29,362 |
|
Stock-based compensation |
16,188 |
|
|
22,048 |
|
Impairment of goodwill |
90,251 |
|
|
— |
|
Loss on
disposal of property and equipment |
269 |
|
|
5 |
|
Provision
for doubtful accounts |
482 |
|
|
558 |
|
Unrealized foreign currency gains, net |
372 |
|
|
— |
|
Deferred
income taxes |
(1,453 |
) |
|
(4,985 |
) |
Changes
in operating assets and liabilities, net of effect of business
acquisitions: |
|
|
|
Accounts receivable |
58,876 |
|
|
65,025 |
|
Prepaid expenses and other assets |
(1,478 |
) |
|
(3,276 |
) |
Accounts payable and accrued expenses |
(49,972 |
) |
|
(63,141 |
) |
Other liabilities |
(510 |
) |
|
78 |
|
Net cash provided by operating activities |
9,213 |
|
|
48,811 |
|
INVESTING
ACTIVITIES: |
|
|
|
Purchases
of property and equipment |
(14,554 |
) |
|
(11,393 |
) |
Capitalized internal use software development costs |
(6,127 |
) |
|
(7,526 |
) |
Acquisitions, net of cash acquired |
(38,610 |
) |
|
(238 |
) |
Investments in available-for-sale securities |
(66,419 |
) |
|
(22,722 |
) |
Maturities of available-for-sale securities |
67,650 |
|
|
20,600 |
|
Net cash used in investing activities |
(58,060 |
) |
|
(21,279 |
) |
FINANCING
ACTIVITIES: |
|
|
|
Proceeds
from exercise of stock options |
391 |
|
|
13,796 |
|
Proceeds
from issuance of common stock under employee stock purchase
plan |
444 |
|
|
1,137 |
|
Taxes
paid related to net share settlement |
(2,067 |
) |
|
(4,886 |
) |
Net cash provided by (used in) financing activities |
(1,232 |
) |
|
10,047 |
|
EFFECT OF EXCHANGE RATE
CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
186 |
|
|
(71 |
) |
CHANGE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
(49,893 |
) |
|
37,508 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH — Beginning of period |
149,498 |
|
|
116,832 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH — End of period |
$ |
99,605 |
|
|
$ |
154,340 |
|
SUPPLEMENTAL
DISCLOSURES OF OTHER CASH FLOW INFORMATION: |
|
|
|
Capitalized assets
financed by accounts payable and accrued expenses |
2,065 |
|
|
1,754 |
|
Capitalized stock-based
compensation |
338 |
|
|
772 |
|
|
|
|
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.RECONCILIATION OF REVENUE TO ADVERTISING SPEND
AND REVENUE TO NON-GAAP NET REVENUE(In
thousands)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Revenue |
|
$ |
35,211 |
|
|
$ |
65,811 |
|
|
$ |
124,148 |
|
|
$ |
205,554 |
|
Plus
amounts paid to sellers(1) |
|
159,808 |
|
|
176,991 |
|
|
466,802 |
|
|
543,158 |
|
Advertising spend |
|
$ |
195,019 |
|
|
$ |
242,802 |
|
|
$ |
590,950 |
|
|
$ |
748,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Revenue |
|
$ |
35,211 |
|
|
$ |
65,811 |
|
|
$ |
124,148 |
|
|
$ |
205,554 |
|
Less
amounts paid to sellers reflected in cost of revenue(2) |
|
— |
|
|
5,248 |
|
|
633 |
|
|
16,323 |
|
Non-GAAP net
revenue |
|
$ |
35,211 |
|
|
$ |
60,563 |
|
|
$ |
123,515 |
|
|
$ |
189,231 |
|
(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. |
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.RECONCILIATION OF NET INCOME (LOSS) TO
ADJUSTED EBITDA(In
thousands)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Net income (loss) |
|
$ |
(103,571 |
) |
|
$ |
3,530 |
|
|
$ |
(130,966 |
) |
|
$ |
3,137 |
|
Add back (deduct): |
|
|
|
|
|
|
|
|
Depreciation and amortization expense, excluding amortization of
acquired intangible assets |
|
7,021 |
|
|
5,259 |
|
|
23,633 |
|
|
15,018 |
|
Amortization of acquired intangibles |
|
1,157 |
|
|
5,695 |
|
|
3,521 |
|
|
14,344 |
|
Stock-based compensation expense |
|
4,646 |
|
|
6,531 |
|
|
16,188 |
|
|
22,048 |
|
Impairment of goodwill |
|
90,251 |
|
|
— |
|
|
90,251 |
|
|
— |
|
Acquisition and related items |
|
268 |
|
|
3 |
|
|
268 |
|
|
334 |
|
Interest
income, net |
|
(269 |
) |
|
(134 |
) |
|
(664 |
) |
|
(359 |
) |
Foreign currency (gain) loss, net |
|
242 |
|
|
(21 |
) |
|
1,093 |
|
|
(338 |
) |
Benefit
for income taxes |
|
(2,031 |
) |
|
(5,557 |
) |
|
(1,510 |
) |
|
(4,981 |
) |
Adjusted EBITDA |
|
$ |
(2,286 |
) |
|
$ |
15,306 |
|
|
$ |
1,814 |
|
|
$ |
49,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.RECONCILIATION OF NET INCOME (LOSS) TO
NON-GAAP NET INCOME (LOSS)(In
thousands)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Net income (loss) |
|
$ |
(103,571 |
) |
|
$ |
3,530 |
|
|
$ |
(130,966 |
) |
|
$ |
3,137 |
|
Add back (deduct): |
|
|
|
|
|
|
|
|
Acquisition and related items, including amortization of acquired
intangibles |
|
1,425 |
|
|
5,698 |
|
|
3,789 |
|
|
14,678 |
|
Stock-based compensation expense |
|
4,646 |
|
|
6,531 |
|
|
16,188 |
|
|
22,048 |
|
Impairment of goodwill |
|
90,251 |
|
|
— |
|
|
90,251 |
|
|
— |
|
Foreign currency (gain) loss, net |
|
242 |
|
|
(21 |
) |
|
1,093 |
|
|
(338 |
) |
Tax
effect of Non-GAAP adjustments (1) |
|
(79 |
) |
|
(6,066 |
) |
|
(89 |
) |
|
(5,228 |
) |
Non-GAAP net income
(loss) |
|
$ |
(7,086 |
) |
|
$ |
9,672 |
|
|
$ |
(19,734 |
) |
|
$ |
34,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
Non-GAAP net loss
for the third quarter of 2017 includes the estimated tax impact
from the expense items reconciling between net loss and non-GAAP
net loss. For consistency, 2016 historical non-GAAP income has
been adjusted to reflect the estimated tax impact of those
items. |
|
|
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.RECONCILIATION OF GAAP EPS TO NON-GAAP
EPS(In thousands, except per share
amounts)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
GAAP net income (loss)
per share (1): |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.11 |
) |
|
$ |
0.07 |
|
|
$ |
(2.69 |
) |
|
$ |
0.07 |
|
Diluted |
|
$ |
(2.11 |
) |
|
$ |
0.07 |
|
|
$ |
(2.69 |
) |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss) (2) |
|
$ |
(7,086 |
) |
|
$ |
9,672 |
|
|
$ |
(19,734 |
) |
|
$ |
34,297 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of
weighted-average shares used to compute net income (loss) per share
to non-GAAP weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Weighted-average shares
used to compute net income (loss) per share: |
|
49,055 |
|
|
48,683 |
|
|
48,726 |
|
|
49,126 |
|
Dilutive
effect of weighted-average common stock options, RSAs, and
RSUs(3) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Dilutive
effect of weighted-average escrow shares |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Dilutive
effect of weighted-average ESPP(3) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Non-GAAP
weighted-average shares outstanding |
|
49,055 |
|
|
48,683 |
|
|
48,726 |
|
|
49,126 |
|
Non-GAAP earnings
(loss) per share |
|
$ |
(0.14 |
) |
|
$ |
0.20 |
|
|
$ |
(0.40 |
) |
|
$ |
0.70 |
|
(1) Calculated as net
income (loss) divided by basic weighted-average shares used to
compute income (loss) per share as included in the
consolidated statement of operations. |
(2) Refer to
reconciliation of net income (loss) to non-GAAP net income
(loss). |
(3) In most
periods in which net income is positive, the weighted-average
shares used to compute diluted earnings per share are equal to the
weighted-average shares used to compute basic loss per share and
already include the dilutive effect of common stock options, RSAs,
RSUs, acquisition related contingent and escrow shares, and ESPP
using the treasury stock method. |
|
|
|
|
|
|
THE RUBICON PROJECT,
INC.REVENUE AND ADVERTISING SPEND BY
CHANNEL(In thousands, except
percentages)(unaudited) |
|
|
|
|
|
|
|
Revenue |
|
Advertising Spend |
|
|
Three Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
percentages) |
Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Desktop |
|
$ |
16,881 |
|
|
48 |
% |
|
$ |
42,684 |
|
|
65 |
% |
|
$ |
103,325 |
|
|
53 |
% |
|
$ |
159,460 |
|
|
66 |
% |
Mobile |
|
18,330 |
|
|
52 |
|
|
23,127 |
|
|
35 |
|
|
91,694 |
|
|
47 |
|
|
83,342 |
|
|
34 |
|
Total |
|
$ |
35,211 |
|
|
100 |
% |
|
$ |
65,811 |
|
|
100 |
% |
|
$ |
195,019 |
|
|
100 |
% |
|
$ |
242,802 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
Advertising Spend |
|
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
percentages) |
Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Desktop |
|
$ |
68,956 |
|
|
56 |
% |
|
$ |
135,672 |
|
|
66 |
% |
|
$ |
345,481 |
|
|
58 |
% |
|
$ |
506,579 |
|
|
68 |
% |
Mobile |
|
55,192 |
|
|
44 |
|
|
69,882 |
|
|
34 |
|
|
245,469 |
|
|
42 |
|
|
242,133 |
|
|
32 |
|
Total |
|
$ |
124,148 |
|
|
100 |
% |
|
$ |
205,554 |
|
|
100 |
% |
|
$ |
590,950 |
|
|
100 |
% |
|
$ |
748,712 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Rubicon Project (NYSE:RUBI)
Historical Stock Chart
From Apr 2024 to May 2024
The Rubicon Project (NYSE:RUBI)
Historical Stock Chart
From May 2023 to May 2024