Telaria Reports Second Quarter 2019 Financial Results

Revenue increased 47% year-over-year to $18.2 million and Adjusted EBITDA increased to $1.0 million

NEW YORK–(BUSINESS WIRE)–Telaria, Inc. (NYSE:TLRA), the complete software platform that optimizes yield for leading video publishers, today announced financial results for the quarter ended June 30, 2019.

Our strong second quarter results reflect the successful execution of our strategy to build the leading technology platform for programmatic CTV. With our CTV business growing 133% year-over-year, helping to drive overall revenue by 47% and delivering our first EBITDA positive second quarter, it is clear that our investment in platform innovation and transparency are paying off,” said Mark Zagorski, Telaria CEO. “Additionally, we signed numerous premium partners during the quarter and enhanced our technology to take advantage of the growing addressable opportunities in CTV. As programmatic CTV continues to scale, we believe we are well-positioned to take advantage of this growth.”

Second Quarter 2019 Financial Highlights:

  • Revenue of $18.2 million, up 47% year-over-year
  • Gross profit of $14.7 million, up 31% year-over-year
  • Adjusted EBITDA(1) of $1.0 million, compared to $(1.1) million in the prior year
  • Increased full year revenue guidance to $68.0 – $72.0 million from $66.0 – $70.0 million

(1)

Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion in the section called “Non-GAAP Financial Measures” and the reconciliation included at the end of this press release.

Second Quarter 2019 Business Highlights:

  • CTV revenue increased to $7.1 million, up 133% year-over-year, and represented 39% of quarterly revenue, up from 24% of quarterly revenue in Q2 2018
  • Launched addressable targeting capabilities for CTV
  • Continued to add premium OTT publishers to Telaria’s platform across multiple geographic regions including North America, LATAM and APAC

Second Quarter Results Summary

(in millions, except per share amounts), (unaudited)

 

Three Months Ended

June 30,

Six Months Ended

June 30,

 

2019

 

2018

 

%

Change

 

2019

 

2018

 

%

Change

 

 

 

 

 

 

 

Revenue

$18.2

 

$12.4

 

47%

 

$31.8

 

$22.0

 

45%

Gross profit

$14.7

 

$11.3

 

31%

 

$25.9

 

$19.9

 

30%

Loss from continuing operations, net of income taxes

$(1.5)

 

$(3.0)

 

50%

 

$(5.8)

 

$(9.1)

 

36%

Loss from continuing operations, net of income taxes per share

$(0.03)

 

$(0.06)

 

50%

 

$(0.13)

 

$(0.18)

 

28%

Adjusted EBITDA(1)

$1.0

 

$(1.1)

 

NM

 

$(1.4)

 

$(4.4)

 

68%

(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.

Guidance

Based on information available as of August 6, 2019, the Company expects the following:

Third Quarter and Full Year 2019 Outlook

 

Q3 2019

 

Full Year 2019

 

 

 

 

Revenue

$16.0 – $17.0 million

 

$68.0 – $72.0 million

Adjusted EBITDA (1)

$(1.0) – $0.0 million

 

$2.0 – $5.0 million

(1)

Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion in the section called “Non-GAAP Financial Measures”

Q2 2019 Financial Results Webcast: The Company will host a conference call at 8:00 AM ET today to discuss its results. The conference call can be accessed toll-free at (877) 407-9039 or (201) 689-8470 (Toll/International). The call will also be broadcast simultaneously at https://telaria.com. Following completion of the call, a recorded replay of the webcast will be available on Telaria’s website. To listen to the telephone replay, call toll-free (844) 512-2921 or (412) 317-6671 (Toll/International), replay Pin #: 13692518. The telephone replay will be available from 11:00 AM ET August 6, 2019 through 11:59 PM ET August 13, 2019. Additional investor information can be accessed at https://investor.telaria.com.

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, SonyVue, Viacom’s PlutoTV, TubiTV, Singtel, Australia’s Channel Nine and Channel Ten, and Brazil’s Globo.

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 2019 third quarter and full year financial guidance and statements concerning the Company’s growth or any markets in which it operates, including CTV and OTT. 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 demand partners and maintain relationships with current demand partners; the company’s ability to increase or maintain spend from existing demand partners; the impact of the disposition of the company’s buyer platform on the company’s operations and financial results; growth of OTT and connected TV markets; risks of entering new markets in which we have limited or no experience and difficulty adapting our solutions for new markets; the company’s ability to attract sellers of premium video advertising inventory to its platform and secure inventory on terms that are favorable to it; the 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; 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 and future filings by the Company, including its Quarterly Report on Form 10-Q for the period ended June 30, 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 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, expenses for prior corporate facilities required to be recorded as operating expenses as a result of the adoption of certain accounting standards, acquisition related costs, restructuring costs, 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. With respect to our expectations under “Guidance” above, reconciliation of Adjusted EBITDA guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the costs and charges excluded from this non-GAAP measure, in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of these costs and charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Exhibit A

Telaria, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

June 30,

 

December 31,

 

2019

 

2018

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

58,164

 

 

$

47,659

 

Accounts receivable net of allowance for doubtful accounts of $1,265 and $982 as of June 30, 2019 and December 31, 2018 respectively.

116,566

 

 

104,387

 

Prepaid expenses and other current assets

3,933

 

 

3,381

 

Total current assets

178,663

 

 

155,427

 

Long-term assets:

 

 

 

Operating lease right-of-use asset, net of amortization

25,152

 

 

 

Property and equipment net of accumulated depreciation of $3,168 and $2,696 as of June 30, 2019 and December 31, 2018, respectively

2,336

 

 

2,789

 

Intangible assets, net

3,949

 

 

4,379

 

Goodwill

9,448

 

 

9,478

 

Deferred tax assets

126

 

 

193

 

Other assets

2,128

 

 

2,440

 

Total long-term assets

43,139

 

 

19,279

 

Total assets

$

221,802

 

 

$

174,706

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$

133,617

 

 

$

109,991

 

Operating lease liability

5,017

 

 

 

Deferred rent

 

 

797

 

Contingent consideration on acquisition

 

 

1,500

 

Deferred income

459

 

 

69

 

Other current liabilities

116

 

 

817

 

Total current liabilities

139,209

 

 

113,174

 

Long-term liabilities:

 

 

 

Operating lease liability, net of current portion

26,255

 

 

 

Deferred rent, net of current portion

 

 

5,759

 

Deferred tax liabilities

1,145

 

 

1,153

 

Other non-current liabilities

203

 

 

225

 

Total liabilities

166,812

 

 

120,311

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Common stock

4

 

 

4

 

Treasury stock

(31,980

)

 

(31,980

)

Additional paid-in capital

299,586

 

 

293,154

 

Accumulated other comprehensive loss

(969

)

 

(949

)

Accumulated deficit

(211,651

)

 

(205,834

)

Total stockholders’ equity

54,990

 

 

54,395

 

Total liabilities and stockholders’ equity

$

221,802

 

 

$

174,706

 

Telaria, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2019

 

2018

 

2019

 

2018

Revenue

$

18,216

 

 

$

12,430

 

 

$

31,838

 

 

$

22,031

 

Cost of revenue

3,468

 

 

1,136

 

 

5,919

 

 

2,164

 

Gross profit

14,748

 

 

11,294

 

 

25,919

 

 

19,867

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Technology and development(1)

2,739

 

 

2,305

 

 

5,594

 

 

4,613

 

Sales and marketing(1)

6,756

 

 

6,646

 

 

13,103

 

 

12,938

 

General and administrative(1)

7,529

 

 

5,365

 

 

14,365

 

 

10,363

 

Restructuring costs

 

 

117

 

 

 

 

117

 

Depreciation and amortization

370

 

 

874

 

 

809

 

 

2,675

 

Total operating expenses

17,394

 

 

15,307

 

 

33,871

 

 

30,706

 

 

 

 

 

 

 

 

 

Loss from continuing operations

(2,646

)

 

(4,013

)

 

(7,952

)

 

(10,839

)

 

 

 

 

 

 

 

 

Interest and other income (expense), net:

 

 

 

 

 

 

 

Interest income (expense)

2

 

 

(45

)

 

(1

)

 

(48

)

Other income, net

1,203

 

 

1,127

 

 

2,187

 

 

1,844

 

Total interest income (expense) and other income, net

1,205

 

 

1,082

 

 

2,186

 

 

1,796

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income taxes

(1,441

)

 

(2,931

)

 

(5,766

)

 

(9,043

)

 

 

 

 

 

 

 

 

Provision for income taxes

44

 

 

29

 

 

51

 

 

43

 

 

 

 

 

 

 

 

 

Loss from continuing operations, net of income taxes

(1,485

)

 

(2,960

)

 

(5,817

)

 

(9,086

)

 

 

 

 

 

 

 

 

Loss on sale of discontinued operations, net of income taxes

 

 

(161

)

 

 

 

(136

)

 

 

 

 

 

 

 

 

Net loss

$

(1,485

)

 

$

(3,121

)

 

$

(5,817

)

 

$

(9,222

)

 

 

 

 

 

 

 

 

Net loss per share — basic and diluted:

 

 

 

 

 

 

 

Loss from continuing operations, net of income taxes

$

(0.03

)

 

$

(0.06

)

 

$

(0.13

)

 

$

(0.18

)

Net loss

$

(0.03

)

 

$

(0.06

)

 

$

(0.13

)

 

$

(0.18

)

 

 

 

 

 

 

 

 

Weighted-average number of shares of common stock outstanding:

 

 

 

 

 

 

 

Basic and diluted

45,702,810

 

 

52,241,605

 

 

45,283,647

 

 

52,035,788

 

(1) Stock-based compensation expenses included above:

 

Three Months Ended

June 30,

Six Months Ended

June 30,

 

2019

 

2018

 

2019

 

2018

Stock-based compensation expense:

 

 

 

 

Technology and development

$

222

$

124

$

365

$

253

Sales and marketing

663

394

1,043

704

General and administrative

1,135

462

1,695

879

Total stock-based compensation expense in continuing operations

$

2,020

$

980

$

3,104

$

1,836

 

Telaria, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Six Months Ended

June 30,

 

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

Net loss from continuing operations

 

$

(5,817

)

 

$

(9,086

)

Total loss from discontinued operations

 

 

 

(136

)

Depreciation and amortization expense

 

809

 

 

2,675

 

Bad debt expense

 

108

 

 

163

 

Loss on disposal of property and equipment

 

128

 

 

21

 

Amortization of operating lease right-of-use asset

 

1,971

 

 

 

Stock-based compensation expense

 

3,104

 

 

1,836

 

Net changes in operating assets and liabilities:

 

 

 

 

(Increase) decrease in accounts receivable

 

(12,491

)

 

709

 

Increase in prepaid expenses, other current assets

 

(294

)

 

(776

)

Decrease in deferred tax assets

 

67

 

 

 

Increase in accounts payable and accrued expenses

 

23,859

 

 

615

 

(Decrease) increase in other current liabilities

 

(755

)

 

243

 

Decrease in operating lease liability

 

(2,342

)

 

 

Increase in deferred rent and security deposits payable

 

7

 

 

760

 

Increase (decrease) in deferred income

 

393

 

 

(657

)

Decrease in other liabilities

 

(22

)

 

(639

)

Net cash provided by (used in) operating activities

 

8,725

 

 

(4,272

)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property and equipment

 

(183

)

 

(2,505

)

Acquisition, net of cash acquired

 

 

 

(4,856

)

Net cash used in investing activities

 

(183

)

 

(7,361

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Contingent consideration on acquisition

 

(1,500

)

 

 

Proceeds from the exercise of stock options awards

 

3,792

 

 

1,178

 

Proceeds from issuance of common stock under employee stock purchase plan

 

271

 

 

239

 

Tax withholdings related to net share settlements of restricted stock unit awards (RSUs)

 

(734

)

 

(1,014

)

Net cash provided by financing activities

 

1,829

 

 

403

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

10,365

 

 

(11,230

)

 

 

 

 

 

Effect of exchange rate changes in cash and cash equivalents

 

134

 

 

(140

)

 

 

 

 

 

Cash, cash equivalents at beginning of period

 

47,659

 

 

76,320

 

Cash, cash equivalents at end of period

 

$

58,164

 

 

$

64,950

 

Exhibit B

Telaria, Inc.

Reconciliation of Net Loss from Continuing Operations, Net of Income Taxes to Adjusted EBITDA

(in thousands)

(unaudited)

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

Loss from continuing operations, net of income taxes

$

(1,485

)

 

$

(2,960

)

 

$

(5,817

)

 

$

(9,086

)

Adjustments:

 

 

 

 

 

 

 

Depreciation and amortization expense

418

 

 

874

 

 

905

 

 

2,675

 

Total interest and other income (expenses), net(1)

(1,205

)

 

(1,082

)

 

(2,186

)

 

(1,796

)

Provision for income taxes

44

 

 

29

 

 

51

 

 

43

 

Stock-based compensation expense

2,020

 

 

980

 

 

3,103

 

 

1,836

 

Expenses for prior corporate facilities (2)

1,033

 

 

 

 

2,065

 

 

 

Acquisition-related costs

 

 

329

 

 

 

 

329

 

Restructuring costs

 

 

117

 

 

 

 

117

 

Executive severance, retention and recruiting costs

188

 

 

80

 

 

473

 

 

223

 

Expenses for transitional services(3)

 

 

308

 

 

 

 

697

 

Other adjustments(4)

 

 

251

 

 

 

 

565

 

Total net adjustments

2,498

 

 

1,886

 

 

4,411

 

 

4,689

 

Adjusted EBITDA(5)

$

1,013

 

 

$

(1,074

)

 

$

(1,406

)

 

$

(4,397

)

(1)

Reflects sublease income for our former office facilities. In addition, for the three and six months ended June 30, 2018, includes income received from the transfer of rights in the name “Tremor Video”.

(2)

For the three and six months ended June 30, 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 (Leases).

(3)

For the three and six months ended June 30, 2018, reflects costs incurred providing transitional services following the sale of the divested buyer platform.

(4)

For the three and six months ended June 30, 2018, reflects rent expense for our current corporate headquarters, which was then unoccupied.

(5)

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.

 

Contacts

Investor Relations:

Andrew Posen

Vice President, Head of Investor Relations

212-792-2315

IR@telaria.com

Media:

Lekha Rao

Vice President, Media Relations & Corporate Communications

646-226-0254

lrao@telaria.com

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