YuMe Reports Fourth Quarter and Full Year 2013 Financial Results

REDWOOD CITY, Calif.--()--YuMe, Inc. (NYSE: YUME), a leading provider of digital video brand advertising solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2013. Financial highlights include:

Fourth Quarter 2013

  • Revenue of $54.0 million, an increase of 19% from the fourth quarter of 2012 (Q4 2012);
  • Gross margin of 48.1%, compared to 48.4% in Q4 2012;
  • Adjusted EBITDA1 of $8.3 million, compared to $9.1 million in Q4 2012;
  • Net income attributable to common shareholders of $5.4 million, or $0.16 per diluted share, compared to $0.4 million, or $0.06 per diluted share, in Q4 2012.

Full Year 2013

  • Revenue of $151.1 million, an increase of 29% from 2012;
  • Gross margin of 46.9%, compared to 46.0% in 2012;
  • Adjusted EBITDA1 of $9.0 million, compared to $11.8 million in 2012;
  • Net income attributable to common shareholders of $0.3 million, or $0.02 per diluted share, compared to $0.1 million, or $0.02 per share, in 2012.

“2013 was another successful year for YuMe, with strong financial results and continued execution on our long-term growth strategies,” said Jayant Kadambi, Chief Executive Officer of YuMe. “2014 is off to a strong start, and we are confident in our ability to drive financial performance while investing for long-term growth through further product enhancements such as TV-style audience targeting, continued geographical expansion and the addition of our programmatic solution.”

Customer highlights for the fourth quarter include:

  • 367 advertising customers, an increase of 38% from 265 in Q4 2012;
  • Average revenue per advertising customer of $145,000, a decrease of 14% year-over-year.

Customer highlights for the full year 2013 include:

  • 580 advertising customers, an increase of 29% from 449 for the full year 2012;
  • Average revenue per advertising customer of $255,000, a decrease of 1% from $257,000 for the full year 2012.

Business Outlook:

Today, the Company is providing the following estimates for its key financial measures for the first quarter and full year 2014:

      Q1 2014     FY 2014
Revenue $35.0 - $36.0 million $190 - $200 million
Adjusted EBITDA $(4.0) - $(3.0) million $2.0 - $8.0 million
 

Conference Call and Webcast Information:

Senior management will host a conference call today at 4:30 p.m. ET to discuss the Company’s results and outlook. The event can be accessed by dialing (877) 941-1429 or (480) 629-9858 (conference ID: 4667640). A replay will be available through Thursday, March 6 at (800) 406-7325 or (303) 590-3030 (conference ID: 4667640). A Webcast of the live call and replay will also be available at http://investors.yume.com.

About YuMe

YuMe, Inc. is a leading provider of digital video brand advertising solutions. Its proprietary data-science driven technologies and large audience footprint drive inventory monetization and enable advertisers to reach targeted, brand receptive audiences across a wide range of Internet-connected devices. Designed to serve the specific needs of brand advertising, YuMe’s technology platform simplifies the complexities associated with delivering effective digital video advertising campaigns in today’s highly-fragmented market. YuMe is headquartered in Redwood City, CA with European headquarters in London and eleven additional offices worldwide. For more information, visit YuMe.com/pr, follow @YuMeVideo and like YuMe on Facebook. Current YuMe logos can be found at www.yume.com/news/logos.

YuMe is a trademark of YuMe. All other brands, products or service names are or may be trademarks or service marks of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements, including those in management quotations and under the caption “Business Outlook”. In some cases, you can identify forward-looking statements by the words "may," "will," "expect," "intend," "plan," "objective," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue" and "ongoing," or the negative of these terms, or other comparable terminology intended to identify statements about the future. All statements other than statements of historical fact are statements that could be forward-looking statements, including, but not limited to, statements about our growth strategy; our operating results, including revenue, gross margin, net loss and adjusted EBITDA; market trends; and quotations from management. These forward-looking statements are subject to risks and uncertainties, assumptions and other factors that could cause actual results and the timing of events to differ materially from future results that are expressed or implied in our forward-looking statements. Factors that could cause or contribute to such differences include our history of net losses and limited operating history, which make it difficult to evaluate our prospects, our fluctuating quarterly results of operations, and our dependence on a limited number of customers in a highly competitive industry. These and other risk factors are discussed under “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 that has been filed with the U.S. Securities and Exchange Commission (the “SEC”), and in our future filings and reports with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2013. The forward-looking statements in this press release are based on information available to YuMe as of the date hereof, and YuMe assumes no obligation to update any forward-looking statements.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we report adjusted EBITDA, which is a non-GAAP financial measure. We calculate adjusted EBITDA as net income, excluding income taxes, interest, depreciation and amortization, and stock-based compensation. We believe that adjusted EBITDA provides useful information to investors in understanding our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information presented by other companies. Non-GAAP financial information should not be viewed as a substitute for, or superior to, financial information prepared in accordance with GAAP. Users of this non-GAAP financial information should consider the types of events and transactions for which adjustments have been made.

We have included adjusted EBITDA in this release because it is a key measure we use to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that adjusted EBITDA can provide a useful measure for period-to-period comparisons of our operating results because it excludes some expenses that may mask underlying trends.

In the table following the financial statements attached to this press release, the non-GAAP financial measures used in this press release are reconciled to the most directly comparable GAAP financial measures. With respect to adjusted EBITDA expectations provided under “Business Outlook” above, quantitative reconciliation to the most directly comparable GAAP financial measure is not feasible, because unpredictable fluctuations in our stock price makes it difficult to estimate accurately future stock-based compensation expenses that are excluded from these non-GAAP financial measures. We expect the variability of the above charges may have a significant and unpredictable impact on our future GAAP financial results.

______________
1 Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income, adjusted to exclude income taxes, interest, depreciation and amortization, and stock-based compensation. We believe that adjusted EBITDA provides useful information to investors in understanding and evaluating our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information of other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income prepared in accordance with GAAP as a measure of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made.

 

YuMe, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

   
December 31, 2013 December 31, 2012
Assets (Unaudited) (1)
Current assets:
Cash and cash equivalents $ 42,626 $ 27,909
Marketable securities 7,295
Accounts receivable, net 65,493 48,067
Prepaid expenses and other current assets   2,572   1,355
Total current assets 117,986 77,331
 
Marketable securities – long-term 14,186
Property, equipment and software, net 6,610 5,551
Goodwill 3,902 3,902
Intangible assets, net 2,049 2,847
Restricted cash 292 292
Deposits and other assets   362   691
Total assets $ 145,387 $ 90,614
 
Liabilities, convertible preferred stock, and stockholders’ equity (deficit)
Current liabilities:
Accounts payable $ 7,722 $ 6,893
Accrued digital media property owner costs 17,359 12,475
Accrued liabilities 12,734 7,219
Deferred revenue, current 314 528
Notes payable, current 185
Capital leases, current   359   631
Total current liabilities 38,488 27,931
 
Capital leases, non-current 22 380
Other long-term liabilities 139 178
Deferred tax liability 773 962
Preferred stock warrant liability     301
Total liabilities 39,422 29,752
 
Convertible preferred stock 76,191
 
Stockholders’ equity (deficit):
Common stock 32 5
Additional paid-in-capital 127,690 6,782
Accumulated deficit (21,677 ) (21,998 )
Accumulated other comprehensive loss   (80 )   (118 )
Total stockholders’ equity (deficit)   105,965   (15,329 )
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit) $ 145,387 $ 90,614
 

(1) The condensed consolidated balance sheet as of December 31, 2012 was derived from audited financial statements.

 

YuMe, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

   
Three Months Ended

December 31,

Year Ended

December 31,

 

2013   2012 2013   2012
(1)
 
Revenue $ 54,039 $ 45,469 $ 151,128 $ 116,744
Cost of revenue(2)   28,063   23,442   80,242   62,985
Gross profit 25,976 22,027 70,886 53,759
 
Operating expenses:
Sales and marketing(2) 14,273 8,986 47,118 31,385
Research and development(2) 1,417 875 4,499 2,766
General and administrative(2)   4,406   4,229   17,992   12,466
Total operating expenses 20,096 14,090 69,609 46,617
 
Income from operations 5,880 7,937 1,277 7,142
Interest and other income (expense):
Interest expense (6 ) (21 ) (47 ) (117 )
Other income (expense), net   13   (109 )   (239 )   (147 )
Total interest and other income (expense)   7   (130 )   (286 )   (264 )
 
Income before income taxes 5,887 7,807 991 6,878
Income tax expense   (508 )   (652 )   (670 )   (612 )
 
Net income $ 5,379 $ 7,155 $ 321 $ 6,266
Net income attributable to common shareholders $ 5,379 $ 362 $ 321 $ 89
 
Net income per share attributable to common stockholders:
Basic $ 0.17 $ 0.08 $ 0.02 $ 0.02
Diluted $ 0.16 $ 0.06 $ 0.02 $ 0.02
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic   31,916   4,801   15,752   4,716
Diluted   33,461   5,840   17,250   5,545

(1) The condensed consolidated statement of operations for the year ended December 31, 2012 was derived from audited financial statements.

(2) Stock-based compensation included above:

  Three Months Ended December 31,     Year Ended December 31,
2013     2012 2013     2012
Cost of revenue $ 78 $ 24 $ 185 $ 128
Sales and marketing 619 197 1,806 1,215
Research and development 123 117 346 184
General and administrative   506   166   1,497   515
Total employee stock-based compensation $ 1,326 $ 504 $ 3,834 $ 2,042
 

YuMe, Inc.

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

(In thousands)

(Unaudited)

     
Three Months Ended

December 31,

Year Ended

December 31,

  2013       2012   2013       2012
Net income $ 5,379 $ 7,155 $ 321 $ 6,266
Adjustments:
Interest expense 6 21 47 117
Income tax expense 508 652 670 612
Depreciation and amortization expense 1,066 738 4,103 2,783
Stock-based compensation expense   1,326   504   3,834   2,042
Total Adjustments   2,906   1,915   8,654   5,554
Adjusted EBITDA $ 8,285 $ 9,070 $ 8,975 $ 11,820

Contacts

YuMe, Inc.
Investor Relations:
Gary J. Fuges, CFA, 650-503-7875
ir@yume.com

Release Summary

YuMe, Inc. (NYSE: YUME), a leading provider of digital video brand advertising solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2013.

Sharing

Contacts

YuMe, Inc.
Investor Relations:
Gary J. Fuges, CFA, 650-503-7875
ir@yume.com