0001193125-14-380208.txt : 20141023 0001193125-14-380208.hdr.sgml : 20141023 20141023160207 ACCESSION NUMBER: 0001193125-14-380208 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20141023 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20141023 DATE AS OF CHANGE: 20141023 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RUBICON PROJECT, INC. CENTRAL INDEX KEY: 0001595974 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 208881738 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36384 FILM NUMBER: 141169998 BUSINESS ADDRESS: STREET 1: 12181 BLUFF CREEK DRIVE, 4TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90094 BUSINESS PHONE: 310-207-0272 MAIL ADDRESS: STREET 1: 12181 BLUFF CREEK DRIVE, 4TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90094 8-K 1 d808102d8k.htm 8-K 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 23, 2014

 

 

THE RUBICON PROJECT, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-36384   20-8881738

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

12181 Bluff Creek Drive, Fourth Floor

Los Angeles, CA

  90094
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (310) 207-0272

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On October 23, 2014, The Rubicon Project, Inc. issued a press release announcing financial results for its fiscal quarter ended September 30, 2014. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

  (d) Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

 

99.1    Press release dated October 23, 2014.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   THE RUBICON PROJECT, INC.
Date: October 23, 2014    By:  

/s/ Todd Tappin

     Todd Tappin
     Chief Operating Officer and Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

No.

  

Description

99.1    Press release dated October 23, 2014.
EX-99.1 2 d808102dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Rubicon Project Announces Record Financial Results

Leader in Advertising Technology Reports 60% Revenue Growth; Raises Outlook

 

    Third quarter revenue was $32.2 million, up 60% year-over-year

 

    Third quarter managed revenue1 was $168.2 million, up 43% year-over-year, including RTB growth of 75% year-over-year

 

    Third quarter adjusted EBITDA2 was $4.8 million, up 656% year-over-year

 

    Third quarter non-GAAP earnings per share2 was $0.05

LOS ANGELES, California – October 23, 2014 – The Rubicon Project, Inc. (NYSE: RUBI), a leader in advertising automation and real-time trading platforms for the buying and selling of advertising, today reported financial results for the quarter ended September 30, 2014.

“Our revenue performance in the third quarter of 2014 was the best in our history and our positive adjusted EBITDA was well ahead of forecast,” said Frank Addante, CEO, Founder, and Chief Product Architect of Rubicon Project.

“Our innovations in private exchanges, mobile, and now agency marketplaces, on top of our ongoing momentum in open RTB auction technologies, fueled our 60% growth in the quarter. Our team continues to deliver outstanding results as we execute our mission to automate the buying and selling of advertising and we believe we are ideally positioned to continue to benefit from our investments and future innovations during the seasonally strong fourth quarter and beyond.”

Q3 2014 Financial Results:

 

    Revenue was $32.2 million for the third quarter of 2014, an increase of 60% from $20.1 million for the third quarter of 2013.

 

    Adjusted EBITDA2 was $4.8 million for the third quarter of 2014 compared to $0.6 million for the third quarter of 2013.

 

    Net loss was $4.6 million for the third quarter of 2014 compared to a net loss of $4.9 million for the third quarter of 2013.

 

    Net loss per share attributable to common stockholders was $0.14 for the third quarter of 2014, based on 33.7 million weighted-average shares outstanding. This compares to a net loss per share of $0.52 for the third quarter of 2013, which was based on 11.5 million weighted-average shares outstanding.

 

    Non-GAAP earnings per share2 was $0.05 for the third quarter of 2014, based on 33.7 million non-GAAP weighted-average shares outstanding. This compares to a non-GAAP net loss per share of $0.05 for the third quarter 2013, which was based on 26.2 million non-GAAP weighted-average shares outstanding.

Key Operational Measures:

 

    Managed revenue1 was $168.2 million for the third quarter of 2014, an increase of 43% from $117.6 million for the third quarter of 2013.

 

    Take rate1 was 19.1% for the third quarter of 2014, compared to 17.1% for the third quarter of 2013.

Guidance:

As of October 23, 2014, the Company is providing full year ending December 31, 2014 expectations and guidance as follows:

 

    Revenue between $122 million and $123 million;

 

    Adjusted EBITDA2 between $9 million and $10 million; and

 

    Non-GAAP loss per share2 between $0.06 and $0.03 based on approximately 32.1 million non-GAAP weighted-average shares outstanding.


1  Managed revenue and take rate are operational measures. Managed revenue represents advertising spending transacted on our platform and would represent our revenue if we were to record our revenue on a gross basis instead of a net basis. Take rate represents our share of managed revenue.
2  Adjusted EBITDA and non-GAAP earnings (loss) per share are non-GAAP financial measures. Please see the discussion in the section called “Key Operational and Non-GAAP Financial Measures” and the reconciliations included at the end of this earnings release.

Conference Call Information:

The Company will host a conference call on October 23, 2014 at 2:00 PM (PT) / 5:00 PM (ET) to discuss the third quarter, 2014 financial results of operations. The conference call can be accessed at (877) 201-0168 (U.S.) or (647) 788-4901 (International), conference ID# 14030031. The call will also be broadcast simultaneously at http://investor.rubiconproject.com. Following completion of the call, a recorded replay of the webcast will be available on Rubicon Project’s website. Additional investor information can be accessed at http://investor.rubiconproject.com.

About The Rubicon Project, Inc.

Rubicon Project pioneered advertising automation. Its technology platform provides leading user reach and is used by hundreds of the world’s premium publishers and applications to connect with top brands around the globe. Rubicon Project’s mission is to automate the buying and selling of advertising by offering innovative technology products to connect buyers and sellers globally.

Headquartered in Los Angeles, Rubicon Project has offices worldwide. Learn more at RubiconProject.com. Twitter: @RubiconProject.

Note: The Rubicon Project and the Rubicon Project logo are registered service marks of The Rubicon Project, Inc. All other marks mentioned are the property of their respective owners.

Forward-Looking Statements

This press release and management’s answers to questions during our earnings call may contain 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, our belief that we are innovating in private exchanges, mobile, and agency marketplaces; our belief that there is ongoing momentum in open RTB auction technologies; our belief that we are continuing to deliver outstanding results as we execute our mission to automate the buying and selling of advertising; and our belief that we are ideally positioned to continue to benefit from our investments and future innovations during the seasonally strong fourth quarter and beyond; our guidance and other statements concerning our anticipated performance, including revenue, margin, cash flow, balance sheet, and profit expectations; development of our technology; introduction of new offerings; scope and duration of client relationships; business mix; sales growth; client utilization of our offerings; market conditions and opportunities; operational measures including managed revenue, paid impressions, average CPM, and take rate; 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 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 rapidly and to manage our 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; the freedom of buyers and sellers to direct their spending and inventory to competing sources or 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 solutions and bring them to market in a timely manner; our ability to maintain a supply of advertising inventory from sellers; our limited operating history and history of losses; our ability to continue to expand into new geographic markets; the effects of increased competition in our market and our ability to compete effectively and to maintain our pricing and take rate; 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 consummate future acquisitions of or investments in complementary companies or technologies; 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 our ability to develop and maintain our corporate infrastructure, including our finance and information technology systems and controls. 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 captions “Risk Factors” and “Management Discussion and Analysis of Financial Condition and Results of Operations” in our periodic reports filed with the Securities and


Exchange Commission. Additional information will also be set forth in other filings we make from time to time with the SEC. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this press release. 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. 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 with the Securities and Exchange Commission 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.

Key Operational and Non-GAAP Financial Measures

Rubicon Project’s management evaluates and makes operating decisions using various operational and financial measures.

Operational Measures

Managed revenue is an operational measure that represents the advertising spending transacted on our platform, and would represent our revenue if we were to record our revenue on a gross basis instead of a net basis. Managed revenue does not represent revenue reported in accordance with generally accepted accounting principles in the United States (“GAAP”). We review managed revenue for internal management purposes to assess market share and scale. Many companies in our industry record revenue on a gross basis, so tracking our managed revenue allows us to compare our results to the results of those companies. Our managed revenue is influenced by the volume and characteristics of paid impressions, and average CPM.

Take rate is an operational measure that represents our share of managed revenue. We review take rate for internal management purposes to assess the development of our marketplace with buyers and sellers. Our 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, product mix, the implementation of new products, platforms and solution features, auction dynamics, and the overall development of the digital advertising ecosystem.

Financial Measures

This press release includes information relating to adjusted EBITDA and non-GAAP earnings (loss) 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 operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operational plans. Management believes that these non-GAAP financial measures provide useful information about our core operating results and thus are appropriate to enhance the overall understanding of our past financial 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. Adjusted EBITDA and non-GAAP earnings (loss) per share eliminate the impact of items that we do not consider indicative of our core operating performance and operating performance on a per share basis. You are encouraged to evaluate these adjustments, and review the reconciliation of these non-GAAP measures to their most comparable GAAP financial 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 net loss to adjusted EBITDA” and “Calculation of net loss attributable to common stockholders to non-GAAP earnings (loss) per share” included as part of this press release.

We define adjusted EBITDA as net loss adjusted for stock-based compensation expense, depreciation and amortization, interest income or expense, change in fair value of pre-IPO convertible preferred stock warrant liabilities, and other income or expense, which mainly consists of foreign exchange gains and losses, certain other non-recurring income or expenses such as acquisition and related costs, and provision for income taxes. We believe adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons:

 

    adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization, interest income or expense, change in fair value of preferred stock warrant liabilities, foreign exchange gains and losses, certain other non-recurring income or expense such as acquisition and related costs, and provision for income taxes that 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 operating performance and the effectiveness of our business strategies, and in communications with our board of directors concerning our financial performance;

 

    adjusted EBITDA may sometimes be considered by the compensation committee of our board of directors in connection with the determination of compensation for our executive officers; and

 

    adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and 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 you should not consider it 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 is 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; adjusted EBITDA does not reflect any cash requirements for these replacements;

 

    adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs, capital expenditures or contractual commitments, and therefore may not reflect periodic increases in capital expenditures;

 

    adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income or expense; and

 

    other companies may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, we also consider other financial measures, including net loss.

Non-GAAP earnings (loss) per share is calculated by dividing non-GAAP net income (loss) by non-GAAP weighted-average shares outstanding. Non-GAAP net income (loss) is equal to net loss attributable to common stockholders excluding the change in fair value of preferred stock warrant liabilities, cumulative preferred stock dividends, stock-based compensation, acquisition and related items expense, foreign currency gains and losses, and amortization of intangible assets. The non-GAAP weighted-average shares outstanding used to calculate non-GAAP earnings (loss) per share assume the net exercise of a preferred stock warrant and the conversion of each share of convertible preferred stock to one half share of common stock in connection with our initial public offering as if they had occurred at the beginning of each respective period presented, whereas, weighted-average shares outstanding used to calculate GAAP earnings (loss) per share reflect the net exercise and conversion as of April 7, the date our IPO closed. The weighted-average shares used to compute net loss per share, non-GAAP weighted-average shares outstanding used to compute non-GAAP earnings (loss) per share, and non-GAAP weighted-average shares outstanding used in our guidance for the full year non-GAAP earnings (loss) per share include the 6.4 million shares issued in our initial public offering from the date our IPO closed. 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 by taking into consideration all preferred stock ownership on an as-converted 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. Because of these limitations, we also consider the comparable GAAP financial measure of net loss attributable to common stockholders.

Investor Relations Contact

Derek Brown

ICR

(415) 430-2075

Investor@rubiconproject.com

Media Contact

Dallas Lawrence

Rubicon Project

(424) 230-7947

Press@rubiconproject.com


THE RUBICON PROJECT, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

     September 30, 2014     December 31, 2013  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 104,089     $ 29,956  

Accounts receivable, net

     99,913        94,722   

Prepaid expenses and other current assets

     6,336       4,141  
  

 

 

   

 

 

 

TOTAL CURRENT ASSETS

     210,338        128,819   

Property and equipment, net

     14,111       8,712  

Internal use software development costs, net

     11,221        7,204   

Goodwill

     1,491       1,491  

Intangible assets, net

     180        510   

Other assets, non-current

     1,425       3,151  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 238,766     $ 149,887  
  

 

 

   

 

 

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

    

LIABILITIES

    

Current liabilities:

    

Accounts payable and accrued expenses

   $ 127,982      $ 120,198   

Debt and capital lease obligations, current portion

     157       288  

Other current liabilities

     2,133       2,901  
  

 

 

   

 

 

 

TOTAL CURRENT LIABILITIES

     130,272       123,387  

Debt and capital leases, net of current portion

     —          3,893   

Convertible preferred stock warrant liabilities

     —          5,451  

Other liabilities, non-current

     1,674        996   
  

 

 

   

 

 

 

TOTAL LIABILITIES

     131,946       133,727  
  

 

 

   

 

 

 

Convertible preferred stock

     —          52,571  

STOCKHOLDERS’ EQUITY (DEFICIT)

    

Preferred stock

     —          —     

Common stock

     —          —     

Additional paid-in capital

     188,899       25,532  

Accumulated other comprehensive income

     62       96  

Accumulated deficit

     (82,141 )     (62,039 )
  

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

     106,820       (36,411 )
  

 

 

   

 

 

 

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

   $ 238,766     $ 149,887  
  

 

 

   

 

 

 


THE RUBICON PROJECT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30, 2014     September 30, 2013     September 30, 2014     September 30, 2013  

Revenue

   $ 32,165     $ 20,063     $ 83,463     $ 55,698  

Expenses:

        

Cost of revenue1

     5,144       4,181       14,456       11,212  

Sales and marketing1

     11,540        6,405        30,863        18,767   

Technology and development1

     5,766       4,823       15,041       14,072  

General and administrative1

     15,157       7,603       42,130       17,963  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     37,607       23,012       102,490       62,014  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (5,442     (2,949     (19,027     (6,316

Other (income) expense:

        

Interest expense, net

     23        69        94        229   

Change in fair value of preferred stock warrant liabilities

     —         1,090       732       2,067  

Foreign exchange (gain) loss, net

     (826     763        104        413   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other (income) expense, net

     (803 )     1,922       930       2,709  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (4,639     (4,871     (19,957     (9,025

Provision (benefit) for income taxes

     (17 )     74       145       187  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (4,622     (4,945     (20,102     (9,212

Cumulative preferred stock dividends

     —         (1,070 )     (1,116 )     (3,174 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (4,622 )   $ (6,015 )   $ (21,218 )   $ (12,386 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share attributable to common stockholders

   $ (0.14 )   $ (0.52 )   $ (0.81 )   $ (1.08 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted weighted-average shares used to compute net loss per share attributable to common stockholders

     33,673       11,544       26,130       11,433  
  

 

 

   

 

 

   

 

 

   

 

 

 


1  Includes stock-based compensation expense as follows (in thousands):

 

     Three Months Ended      Nine Months Ended  
   September 30, 2014      September 30, 2013      September 30, 2014      September 30, 2013  

Cost of revenue

   $ 39      $ 24       $ 127       $ 64  

Selling and marketing

     793         242         2,070         805   

Technology and development

     530        396         1,257         1,183  

General and administrative

     5,788         887         13,273         2,515  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation

   $ 7,150      $ 1,549       $ 16,727       $ 4,567  
  

 

 

    

 

 

    

 

 

    

 

 

 


THE RUBICON PROJECT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

 

     Nine Months Ended  
     September 30, 2014     September 30, 2013  

OPERATING ACTIVITIES:

    

Net loss

   $ (20,102   $ (9,212

Adjustments to reconcile net loss to net cash provided by operating activities

    

Depreciation and amortization

     8,123        6,133   

Stock-based compensation

     16,727       4,567  

Loss (gain) on disposal of property and equipment, net

     199       (12 )

Change in fair value of preferred stock warrant liabilities

     732       2,067  

Deferred income taxes

     (43     —     

Unrealized foreign currency (gain) loss

     (1,356 )     663  

Changes in operating assets and liabilities:

    

Accounts receivable

     (5,301 )     (2,504 )

Prepaid expenses and other assets

     (1,936     (796

Accounts payable and accrued expenses

     9,115       6,909  

Other liabilities

     (906 )     976  
  

 

 

   

 

 

 

Net cash provided by operating activities

     5,252       8,791  
  

 

 

   

 

 

 

INVESTING ACTIVITIES:

    

Purchases of property and equipment

     (8,564 )     (5,441 )

Capitalized internal use software development costs

     (6,619     (2,384

Change in restricted cash

     100       (1,200 )
  

 

 

   

 

 

 

Net cash used in investing activities

     (15,083 )     (9,025 )
  

 

 

   

 

 

 

FINANCING ACTIVITIES:

    

Proceeds from the issuance of common stock in initial public offering, net of underwriting discounts and commissions

     89,733        —     

Payments of initial public offering costs

     (3,037 )     —     

Proceeds from exercise of stock options

     1,194        478   

Repayment of debt and capital lease obligations

     (4,025 )     (906 )
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     83,865       (428 )
  

 

 

   

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

     99       5  

CHANGE IN CASH AND CASH EQUIVALENTS

     74,133        (657

CASH—Beginning of period

     29,956       21,616  
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS—End of period

   $ 104,089     $ 20,959  
  

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:

    

Capitalized assets financed by accounts payable and accrued expenses

   $ 1,124      $ —     

Leasehold improvements paid by landlord

   $ 803     $ —     

Capitalized stock-based compensation

   $ 492      $ 103   

Conversion of preferred stock to common stock

   $ 52,571      $ —     

Reclassification of preferred stock warrant liabilities to additional-paid-in-capital

   $ 6,183      $ —     

Reclassification of deferred offering costs to additional-paid-in-capital

   $ 3,533     $ —     


THE RUBICON PROJECT, INC.

KEY OPERATIONAL AND FINANCIAL MEASURES

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30, 2014     September 30, 2013     September 30, 2014     September 30, 2013  

Operational Measures:

        

Managed revenue (in thousands)

   $ 168,213      $ 117,554      $ 451,319      $ 326,656   

Take rate

     19.1     17.1     18.5     17.1

Financial Measures:

        

Revenue (in thousands)

   $ 32,165     $ 20,063     $ 83,463     $ 55,698  

Adjusted EBITDA (in thousands)

   $ 4,778      $ 632      $ 5,823      $ 4,697   


THE RUBICON PROJECT, INC.

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

(In thousands)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30, 2014     September 30, 2013     September 30, 2014     September 30, 2013  

Financial Measure:

    

Net loss

   $ (4,622 )   $ (4,945 )   $ (20,102 )   $ (9,212 )

Add back (deduct):

        

Depreciation and amortization expense

     3,070       2,032       8,123       6,133  

Stock-based compensation expense

     7,150        1,549        16,727        4,567   

Acquisition and related items

     —         —         —         313  

Interest expense, net

     23        69        94        229   

Change in fair value of preferred stock warrant liabilities

     —         1,090       732       2,067  

Foreign currency (gain) loss, net

     (826     763        104        413   

Provision (benefit) for income taxes

     (17 )     74       145       187  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 4,778     $ 632     $ 5,823     $ 4,697  
  

 

 

   

 

 

   

 

 

   

 

 

 


THE RUBICON PROJECT, INC.

CALCULATION OF NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS TO NON-GAAP (EARNINGS) LOSS PER SHARE

(In thousands, except per share amounts)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30, 2014     September 30, 2013     September 30, 2014     September 30, 2013  

Calculation of non-GAAP earnings (loss) per share:

        

Net loss attributable to common stockholders

   $ (4,622   $ (6,015   $ (21,218   $ (12,386

Add back (deduct):

        

Change in fair value of preferred stock warrant liabilities

     —          1,090        732        2,067   

Cumulative preferred stock dividends

     —          1,070        1,116        3,174   

Stock-based compensation

     7,150        1,549        16,727        4,567   

Acquisition and related items

     —          —          —          313   

Foreign currency (gain) loss, net

     (826     763        104        413   

Amortization of intangible assets

     68        168        329        744   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

   $ 1,770      $ (1,375   $ (2,210   $ (1,108
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP earnings (loss) per share

   $ 0.05      $ (0.05   $ (0.07   $ (0.04
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP weighted-average shares outstanding

     33,673        26,240        31,298        26,129   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of basic and diluted weighted-average shares used to compute net earnings (loss) per share attributable to common stockholders to non-GAAP weighted-average shares outstanding:

        

Basic and diluted weighted-average shares used to compute net earnings (loss) per share attributable to common stockholders

     33,673        11,544        26,130        11,433   

Conversion of preferred stock, weighted-average

     —          14,410        5,067        14,410   

Conversion of net exercised preferred stock warrant, weighted-average

     —          286        101        286   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP weighted-average shares outstanding

     33,673        26,240        31,298        26,129   
  

 

 

   

 

 

   

 

 

   

 

 

 
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