Tremor Video Reports Third Quarter 2016 Financial Results

Tremor Video, Inc. (NYSE:TRMR), a provider of software for video ad effectiveness, today announced financial results for the quarter ended September 30, 2016.

Third Quarter 2016 Highlights:
  • Revenue of $41.3 million, down 1% year-over-year
  • Total Spend 1 of $63.5 million, up 29% year-over-year
  • Gross profit of $18.6 million, up 6% year-over-year
  • Net loss of ($3.6) million; net loss per share of ($0.07)
  • Adjusted EBITDA 2 of $0.04 million
  • Repurchased 621,528 shares during the third quarter at an average price per share of $1.86
    (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 this press 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.
 

"In the third quarter we delivered profitable EBITDA and strong growth in our Total Spend," said Bill Day, Tremor Video CEO. "Our platform continues to scale, with programmatic spend more than doubling year-over-year. The growth of this predominantly self-service business is enabling us to achieve meaningful operating leverage."

The table below presents revenue, Total Spend, gross profit, net loss, Adjusted EBITDA, and net loss per share for the three month and nine month periods ended September 30, 2016 and September 30, 2015.
 
Third Quarter and Year-to-Date Results Summary (1)
(in millions, except per share amounts), (unaudited)  
    Three Months Ended   Nine Months Ended
September 30,

2016
  September 30,

2015
  % Change September 30,

2016
  September 30,

2015
  % Change
 
Revenue $41.3 $41.6 (1%) $113.0 $122.1 (7%)
Total Spend $63.5 $49.3 29% $169.4 $135.9 25%
Gross profit $18.6 $17.6 6% $52.0 $51.8 0%
Net loss ($3.6) ($28.6) 87% ($20.5) ($40.8) 50%
Adjusted EBITDA $0.0 ($1.5) NM ($5.4) ($6.8) 20%
Net loss per share ($0.07) ($0.55) 87% ($0.39) ($0.79) 51%
 
    (1)   As discussed in our Form 10-K for the year ended December 31, 2015, filed with the SEC on March 15, 2016, the previously issued quarterly financial statements for the periods ended March 31, 2015, June 30, 2015, and September 30, 2015 were restated to reflect the reporting of revenue attributable to the Company's seller platform on a net instead of a gross basis. The restatement has the effect of decreasing both revenue and cost of revenue in a like amount in such quarterly financial statements, and has no impact on reported gross profit, net loss or Adjusted EBITDA.
 
 
Third Quarter and Year-to-Date Breakdown of Total Spend (1)
(in thousands), (unaudited)      
  Three Months Ended Nine Months Ended
September 30,

2016
  September 30,

2015
  % Change September 30,

2016
  September 30,

2015
  % Change
 
Programmatic

$

35,490

$

17,019
109 %

$

88,667
$ 38,270 132 %
Non-programmatic higher function 22,239 22,372 (1 %) 65,050 62,125 5 %
Non-programmatic media network   5,745 9,882 (42 %)   15,656   35,553 (56 %)
Total Spend

$

63,474

$

49,273
29 %

$

169,373
$ 135,948 25 %
 

(1)  Please see the discussion in the section called "Non-GAAP Financial Measures".
 

Guidance

Based on information available as of November 3, 2016, the Company expects the following:
Full Year 2016 Outlook      
  Full Year 2016
 
Revenue $155.0 - $160.0 million
Total Spend $245.0 - $255.0 million
Adjusted EBITDA ($2.5) - $0.0 million
 

Q3 2016 Financial Results Webcast: Tremor Video will host a conference call today at 4:30 p.m. ET to discuss its third 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 (800) 449-5865 or internationally at (719) 325-2475. Until November 17, 2016, a domestic replay will be available at (844) 512-2921 or internationally at (412) 317-6671, using passcode 6750502, 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 or growth potential, including 2016 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; 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 Report on Form 10-Q for the period ended March 31, 2016, filed with the Security and Exchange Commission on May 10, 2016, its Quarterly Report on Form 10-Q for the period ended June 30, 2016, filed with the Security and Exchange Commission on August 9, 2016, and future filings and reports by the company, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 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.

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