Q1 2020 Earnings Call

Three and the Securities exchange active 1934.

Forward looking statements include statements about our business outlook and strategies, including the potential effects of the covert 19 global pandemic, our expectations for the receipt of loan funds under the Paycheck protection program.

Historical results that may suggest trends for our business, our expectations about our ability to improve customer retention and new business bookies and to return to growth.

Our ability to manage our expenses in cash resources the impact of investments in products in technology progress on product development effort product capabilities and future financial results.

We make these statements as I've made 720 20.

Claim any duty to update them.

Note that the extent to which decoded 19, global pandemic may impact or businesses, particularly uncertain at this time and difficult for Dick considering the rapidly evolving landscape.

For more information regarding bees, and other wrist and uncertainties that could cause actual results to defer materially from those expressed or implied in these forward looking statements as well as risk relating to our business in general we refer you to this section entitled risk factors in our most recent reports on form 10 Q. and.

Form 10, K. as well as our other F.C.C. filings.

This presentation contain certain financial performance measures that are different from the financial measures calculated in accordance with gap and May also be different from similar calculations are measures used by other companies.

A quantitative reconciliation of these non got financial measures to the most directly comparable got financial measures is available in our first quarter 2020 earnings release with that let me turn the call over to Chris.

Thank you Bob.

Good afternoon, everyone and thank you for joining our call today.

Review the quarter provided an update on our initiatives to return murren to grow.

Wobble them provide additional detail on our first quarter and our outlets to the second quarter.

As we have discussed before we remain focused on returning we're into gross and maximizing shareholder value.

Friend to achieve this is focused on delivering a leading cross chow advertising down or some popcorn when naval Branson their agencies to grow and optimize returns from the online advertising in Boston.

We call this platform or in one.

Our efforts to return more into growth or taking longer than any of us would have preferred and our revenues continue to be under pressure at the same time, we continue to believe that our strategy a sound and that our initiatives will show results in the coming quarters.

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Some encouraging signs present, even if not yet sufficient to return we're into grow.

View is that as we deliver a more compelling product to our market then good results should follow.

Such we continue to invest a substantial amount and product development to better with the needs of the digital marketer.

As announced in today's earnings release Q1 revenues came in at 8.7 million, which was that the high end of our previously published guidance for Q1, but still down from Q1 in the prior year.

We also beat our guidance for our forecasted operating loss for Q1.

Our total cash balance at the end of Q1 was 9.6 million, reflecting our ongoing commitment to manage costs.

We will continue to monitor our cash use closely bouncing investments in our product would cost saving.

This earnings call as a first for Bob and me and that we are conducting it remotely has the entire world grapples with covert 19, which is both a global health emergency and economic disruptor.

Significant effects from covered 19 did not arrive until late in the first quarter runes first quarter financial results were not significantly impacted by corporate nineties.

However, more significant effects are being felt now in our second quarter.

Overall, we anticipate our business and q. to to be down about 20% from pre coven expected level.

I'm encouraged to share that although our overall businesses down we've begun to see some recovery and most spend verticals from our cope with low point, even at spend remains below pre covert levels.

Given the Tractability, an accountability of digital advertising spend we believe that marine as well positioned to whether the impact of Corona virus as our customers use our platform to drive revenue and to acquire customers.

One might gas the impact of covert have fallen most heavily on the travel vertical as well as on those activities that take place in person.

The same time, we've seen an increase in certain verticals, including parts of the commerce spending.

Overall cover there's a negative on morons business due to the reduction and spend in certain verticals and the overall increase in business uncertainty, which leads to a more conservative advertising investment level.

On a relative basis, we believe that digital advertising budgets should fare better than non digital spend.

Brenda's operating remotely now given the various shelter in place orders for our office locations around the world our priorities on our team health and we believe that we can operate remotely indefinitely if needed. Fortunately our team is able to support our customers globally without disruption and she continued to advance our products that especially Moran one.

As we have discussed before Bryn seeks to be an ally and digital for the world's leading brands and their agencies customers and prospects traverse arrange of channels devices and publishers online on their path to purchase marketers need a crock channel platform to engage in all points of this customer journey and as we have highlighted the walled gardens of Google Facebook.

Amazon do not play well together, leading brands to connect the dots on their own.

We're going to help these advertisers to measure managing optimize their online advertising investments to maximize the results to acquire customers tend to drive revenue.

Schools from the publishers understandably focus on how to enable it gives an advertiser to spend more money on ads from that particular publisher.

<unk> serves as a performance layer to supplement their capability and to provide an objective independent measurement of advertising performance as we have highlighted in previous discussion can you imagine a publisher tools that them, forming an advertiser that his or her marginal dollars should be invested on a competitors platform.

Rent is uniquely positioned to meet this growing demand, but as we have shared before our vision remains ahead of many branson agencies were not yet ready to make this change over time, we believe morons approach will become the new standards and that marine will be rewarded for its leadership has the online advertising management category evolves to this new state.

As we invest in product innovation, you're creating more compelling reasons for brands on their agencies to select morin.

We continue to invest in the development and adoption of them are in one our next generation Cross channel advertising platform.

Focus now is on adding sufficient functionality so that our customers can spend the majority of their day to day activities in Marin one.

During the past quarter, we released several enhancements tumor in one including custom columns, a complete been strategy side panel and we're in one linking wizard for Google.

We also added dimensions, which is marines flexible met attacking functionality as well as support for prominence metrics and additional historical data to the devices grant.

These enhancements give morons customers more transparency in control of their campaigns and what is provided in the publisher tools.

As part of our investments in we're in one we've made significant advancements in our social capability to compliment the robust functionality that Facebook provides in its tool.

We're in enhanced social pacing dashboards to enable advertisers to track how their campaigns are performing against the K.P. I.

Customers are able to gain insight into their current results alongside daily expected data based on their target in projects expected timeframe, allowing them to chef more money into better performing campaigns.

And also added support for additional Facebook placements, including marketplace search and Instagram explore.

As more people spend time on social media during the coven 19 locked down these new placements offer advertisers new placement options in areas that face, but that are not entirely overrun with competitor advertising.

We also expanded automated rules for social campaigns him or in one, allowing advertisers to offload task. They perform regularly throughout the day such a checking that they are within budget or that their C.P.A. is our allies or row at our within their target caveat.

Any commerce, we continue to invest in our support for Amazon advertising and launched day parting for Amazon sponsored products campaigns day party enables advertisers to bid higher or lower throughout the day down to 15 minute intervals if desired.

In addition, advertisers can day part campaign schedules by day, if we for example, the bit more aggressively on weekdays versus weekends.

This is especially useful functionality as we all adjust to new work from home patterns. During the widespread shelter in place activities, which also have impacted online shopping behavior.

In the past quarter, we also introduce whole campaign management for Amazon sponsored brands and sponsored display campaign.

I was on advertisers can now used were in bulk an automated bidding functionality for each of the Amazon advertising campaign pipes, giving him more performance and time saving.

As I mentioned last quarter brain continues to work with participants in the Amazon attributes in beta which provides advertisers with insight into how they're marketing of essence outside of Amazon contribute to shopping activity on Amazon.

Brands advertising on Google Facebook and other channels and see how many conversions occurred on Amazon, giving them a more accurate understanding of the our rely on those investments.

In addition to our ongoing investments to support Amazon advertising, you'll recall that we shared last quarter that we also now support Walmart advertising.

This past quarter Marine also added reporting for Google Smart shopping campaigns and improved display of product information, including product title, which gives the market or more insight into his or her campaigns and expands morons analytics to action for E. commerce.

You may have seen the recent announcement that Google has expanded shopping listings, including adding clay since at no cost to assist consumers to find more of the products that they're seeking.

You see these moves by Google as ones to seek to offset the product search games of Amazon in the past years Morons smart feed functionality enables a marketer to post products to both Amazon ads and Google shopping as well as Facebooks dynamic product that for maximum product search coverage.

Bring continues to invest to help our customers to stay at the forefront of the rapidly changing privacy landscape in the past quarter. We gave you to our upgraded marine tracker offering which supports crumbs latest privacy updates requiring advertisers to label third party cookies with same site.

This means that marine tracker customers can continue to measure across site across multiple domains, where required with minimal disruption to their current solution.

As I've shared in the past despite are recent and current challenges and the additional burden of covert 19, I continue to believe that marine has a tremendous opportunity.

And now Bobl review, our first quarter financial results and our outlook for the second quarter of 2020.

Thank you Chris I'll provide an overview of our first quarter results and then share for forecast for the second quarter.

Then with a review of our income statement.

But the first quarter of 2020 marine generated $8.7 million and revenue at the high end of our guidance for the quarter sit down 36% when compared to total revenue for the first quarter of 2019.

Or 31% when adjusted for the revenue impact, resulting from the sale of our perfect audience business and late 2019.

And the revised timing of revenue recognition under or strategic agreement with Google.

During the first quarter, we signed an amendment to our existing strategic agreement with Google They removed to write for Google to terminate the agreement after the second contract year.

<unk> increases our total expected revenue over the life of the contract is it now includes the third contract here.

And we are now recognizing the increased expected total revenue.

From the agreement over a longer term includes the additional third contracts here.

The new longer revenue recognition period had the effective reducing revenue recognized in the first quarter of 2020.

Under the agreement by approximately $700000 as compared to the first quarter of 2019.

<unk> accounting adjustment, we would've feed the high end of our revenue guidance for T. 120, 20 by approximately $600000, primarily as a result of lower than anticipated churn.

Although we began to see a reduction advertising spent during the second half of March as a result of the code at 19 pandemic the impact on our first quarter revenue was not significant.

Our geographic shift for revenue in the first quarter was approximately 75 per cent U.S. and 25 per cent international.

Moving onto our operating results in the balance sheet.

As a reminder, our financial statements in a reconciliation of our gap to non got financial measures can be found in our earnings release issued earlier today.

Are non gap operating loss was $3.5 million for the first quarter about 2020, and 20 nineties. The 3.5 million dollar operating loss and Q1 2020 was $200000 better than the high end of our guidance and also include the impact of the 700000 dollar adjustment and timing of revenue reckon.

<unk> under the Google agreement without which we wouldn't beat the high end of our guidance by approximately $900000.

During the quarter, we continued to tape meaningful steps to reduce our overall cost structure.

As a result or non gap operating expenses were down 36% on a year over year basis, and we ended the quarter with 219 total headcount versus 280, a year ago, we will continue to align our costs with revenue in 2020, as we seek to operate it break even.

In terms of our balance sheet, we ended the quarter with a total cash balance of $9.6 million, representing the net decrease in cash a two and a half million dollars from the queue for about.

The decreasing cash was primarily attributable to a reduction in accrued liabilities the costs of Catholic software in our net loss.

To help us respond to the recent and anticipated effects of the covert 19 pandemic on our business and to maintain our workforce. During this time of uncertainty and continue our plan business activities. We applied for a 3.3 million dollar S.B.A. loan under the Paycheck protection programs are application has been approved but we.

Not yet received the funds from this low we expect to receive the proceeds in the second quarter of 2020.

Moving onto our outlook.

For Q2, 2020, we expect revenues to be in the range of six six and a half million dollars and are known gap operating losses expected to be in the range at $4.8 million to $5.3 million.

<unk> reflects our current estimate the anticipated impacted the coded 19 pandemics on our financial results for the second quarter, including a reduction of revenue of approximately 20% from our pre covert 19 outlook.

This concludes our call for today. Thank you for your time and we look forward to updating you again during our two 220 20 earnings call.

The conferences now concluded. Thank you for attending today's presentation you may now disconnect.