Delaware | 001-36384 | 20-8881738 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
12181 Bluff Creek Drive, 4th Floor | ||
Los Angeles, CA 90094 | ||
(Address of principal executive offices, including zip code) | ||
(310) 207-0272 | ||
(Registrant’s telephone number, including area code) | ||
Not applicable | ||
(Former name or former address, if changed since last report) | ||
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Trading Symbol(s) | Name on each exchange on which registered |
Common stock, par value $0.00001 per share | RUBI | New York Stock Exchange |
(d) | Exhibits |
Exhibit Number | Description | |
99.1 |
THE RUBICON PROJECT, INC. | ||||
Date: | November 6, 2019 | By: | /s/ David Day | |
David Day | ||||
Chief Financial Officer |
• | Revenue was $37.6 million for Q3 2019, up 27% from Q3 2018 |
• | We expect revenue for Q4 2019 to be between $47.0 to $48.5 million |
• | Audio and video were growth drivers in Q3 2019 year over year |
• | Significant operating efficiency realized in Q3 2019 from traffic shaping and enterprise-wide implementation of filtering |
• | Net loss for Q3 2019 was $6.2 million, or loss per share of $0.12, compared to net loss of $13.8 million, or loss per share of $0.27 for the third quarter of 2018 |
• | Adjusted EBITDA(1) was $6.1 million representing a 16% margin, compared to Adjusted EBITDA loss of $1.4 million for the third quarter of 2018 |
• | Non-GAAP loss per share(1) was $0.02, compared to $0.18 non-GAAP loss per share for the third quarter of 2018 |
• | We expect to be cash flow positive for full year 2019 (2) |
• | RTK.io acquisition closed just after the end of the quarter |
Third Quarter 2019 Results Summary | |||||||||||
(in millions, except per share amounts and percentages) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2019 | September 30, 2018 | Change Favorable/ (Unfavorable) | September 30, 2019 | September 30, 2018 | Change Favorable/ (Unfavorable) | ||||||
Revenue | $37.6 | $29.7 | 27% | $107.9 | $83.3 | 30% | |||||
Net loss | ($6.2) | ($13.8) | 55% | ($27.0) | ($59.6) | 55% | |||||
Adjusted EBITDA(1) | $6.1 | ($1.4) | nm | $10.4 | ($21.1) | nm | |||||
Adjusted EBITDA operating expenses(3) | $31.5 | $31.1 | (1)% | $97.5 | $104.4 | 7% | |||||
Adjusted EBITDA margin(4) | 16% | (5%) | 21 ppt | 10% | (25%) | 35 ppt | |||||
Basic and diluted loss per share | ($0.12) | ($0.27) | 56% | ($0.52) | ($1.19) | 56% | |||||
Non-GAAP loss per share(1) | ($0.02) | ($0.18) | 89% | ($0.21) | ($0.89) | 76% |
Definitions: | |
(1) | Adjusted EBITDA and non-GAAP loss per share are non-GAAP financial measures. Please see the discussion in the section called "Non-GAAP Financial Measures" and the reconciliations included at the end of this press release. |
(2) | Cash flow is calculated as Adjusted EBITDA less capital expenditures, excluding changes in working capital. |
(3) | Adjusted EBITDA operating expenses is calculated as revenue less Adjusted EBITDA. |
(4) | Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenue. A reconciliations for net loss to Adjusted EBITDA is included at the end of this press release. For further discussion, please see "Non-GAAP Financial Measures." |
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Live conference call | |
Toll free number: | (844) 875-6911 (for domestic callers) |
Direct dial number: | (412) 902-6511 (for international callers) |
Passcode: | Ask to join the Rubicon Project conference call |
Simultaneous audio webcast: | http://investor.rubiconproject.com, under "Events and Presentations" |
Conference call replay | |
Toll free number: | (877) 344-7529 (for domestic callers) |
Direct dial number: | (412) 317-0088 (for international callers) |
Passcode: | 10135543 |
Webcast link: | http://investor.rubiconproject.com, under "Events and Presentations" |
• | Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s performance without regard to items such as those we exclude in calculating this measure, which 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 performance and the effectiveness of our business strategies, and in communications with our board of directors concerning our performance. Adjusted EBITDA may also be used as a metric for determining payment of cash incentive compensation. |
• | Adjusted EBITDA provides a measure of consistency and comparability with our past performance that many investors find useful, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. |
• | Stock-based compensation is a non-cash charge 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, but Adjusted EBITDA does not reflect any cash requirements for these replacements. |
• | Impairment charges are non-cash charges related to goodwill, intangible assets and/or long-lived assets. |
• | Adjusted EBITDA does not reflect non-cash charges related to acquisition and related items, such as amortization of acquired intangible assets and changes in the fair value of contingent consideration. |
• | Adjusted EBITDA does not reflect cash and non-cash charges and changes in, or cash requirements for, acquisition and related items, such as certain transaction expenses and expenses associated with earn-out amounts. |
• | Adjusted EBITDA does not reflect changes in our working capital needs, capital expenditures, or contractual commitments. |
• | Adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income or expense. |
• | Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 85,122 | $ | 80,452 | |||
Marketable securities | — | 7,524 | |||||
Accounts receivable, net | 172,284 | 205,683 | |||||
Prepaid expenses and other current assets | 5,773 | 6,882 | |||||
TOTAL CURRENT ASSETS | 263,179 | 300,541 | |||||
Property and equipment, net | 24,238 | 33,487 | |||||
Right-of-use lease asset | 22,720 | — | |||||
Internal use software development costs, net | 15,189 | 14,570 | |||||
Intangible assets, net | 7,870 | 10,174 | |||||
Other assets, non-current | 2,125 | 1,240 | |||||
TOTAL ASSETS | $ | 335,321 | $ | 360,012 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 207,033 | $ | 239,678 | |||
Lease liabilities, current | 6,993 | — | |||||
Other current liabilities | 498 | 1,304 | |||||
TOTAL CURRENT LIABILITIES | 214,524 | 240,982 | |||||
Lease liabilities, non-current | 16,495 | — | |||||
Other liabilities, non-current | 179 | 1,017 | |||||
TOTAL LIABILITIES | 231,198 | 241,999 | |||||
STOCKHOLDERS' EQUITY | |||||||
Common stock | 1 | 1 | |||||
Additional paid-in capital | 447,314 | 433,877 | |||||
Accumulated other comprehensive loss | (585 | ) | (259 | ) | |||
Accumulated deficit | (342,607 | ) | (315,606 | ) | |||
TOTAL STOCKHOLDERS' EQUITY | 104,123 | 118,013 | |||||
TOTAL LIABILITITES AND STOCKHOLDERS' EQUITY | $ | 335,321 | $ | 360,012 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Revenue | $ | 37,642 | $ | 29,729 | $ | 107,928 | $ | 83,253 | |||||||
Expenses (1)(2): | |||||||||||||||
Cost of revenue | 13,869 | 14,687 | 44,070 | 44,514 | |||||||||||
Sales and marketing | 11,040 | 10,654 | 33,151 | 34,046 | |||||||||||
Technology and development | 10,293 | 9,299 | 29,848 | 29,038 | |||||||||||
General and administrative | 9,121 | 9,355 | 29,428 | 33,340 | |||||||||||
Restructuring and other exit costs | — | — | — | 3,440 | |||||||||||
Total expenses | 44,323 | 43,995 | 136,497 | 144,378 | |||||||||||
Loss from operations | (6,681 | ) | (14,266 | ) | (28,569 | ) | (61,125 | ) | |||||||
Other (income) expense: | |||||||||||||||
Interest income, net | (218 | ) | (232 | ) | (625 | ) | (777 | ) | |||||||
Other income | (48 | ) | (206 | ) | (236 | ) | (626 | ) | |||||||
Foreign exchange gain, net | (296 | ) | (120 | ) | (138 | ) | (363 | ) | |||||||
Total other income, net | (562 | ) | (558 | ) | (999 | ) | (1,766 | ) | |||||||
Loss before income taxes | (6,119 | ) | (13,708 | ) | (27,570 | ) | (59,359 | ) | |||||||
Provision (benefit) for income taxes | 55 | 84 | (569 | ) | 233 | ||||||||||
Net loss | $ | (6,174 | ) | $ | (13,792 | ) | $ | (27,001 | ) | $ | (59,592 | ) | |||
Net loss per share: | |||||||||||||||
Basic and Diluted | $ | (0.12 | ) | $ | (0.27 | ) | $ | (0.52 | ) | $ | (1.19 | ) | |||
Weighted average shares used to compute net loss per share: | |||||||||||||||
Basic and Diluted | 53,023 | 50,513 | 52,324 | 50,095 |
(1) Stock-based compensation expense included in our expenses was as follows: |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Cost of revenue | $ | 110 | $ | 72 | $ | 308 | $ | 256 | |||||||
Sales and marketing | 1,378 | 1,187 | 4,182 | 3,530 | |||||||||||
Technology and development | 1,157 | 691 | 3,382 | 2,163 | |||||||||||
General and administrative | 2,068 | 1,910 | 6,005 | 6,669 | |||||||||||
Restructuring and other exit costs | — | — | — | 398 | |||||||||||
Total stock-based compensation expense | $ | 4,713 | $ | 3,860 | $ | 13,877 | $ | 13,016 |
(2) Depreciation and amortization expense included in our expenses was as follows: |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Cost of revenue | $ | 7,737 | $ | 8,271 | $ | 23,540 | $ | 24,785 | |||||||
Sales and marketing | 67 | 141 | 305 | 455 | |||||||||||
Technology and development | 102 | 215 | 476 | 683 | |||||||||||
General and administrative | 121 | 140 | 520 | 432 | |||||||||||
Total depreciation and amortization expense | $ | 8,027 | $ | 8,767 | $ | 24,841 | $ | 26,355 |
Nine Months Ended | |||||||
September 30, 2019 | September 30, 2018 | ||||||
OPERATING ACTIVITIES: | |||||||
Net loss | $ | (27,001 | ) | $ | (59,592 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 24,841 | 26,355 | |||||
Stock-based compensation | 13,877 | 13,016 | |||||
Loss on disposal of property and equipment | 92 | 149 | |||||
Provision for doubtful accounts | 897 | 217 | |||||
Accretion of available for sale securities | 24 | (374 | ) | ||||
Non-cash lease expense | (469 | ) | — | ||||
Unrealized foreign currency (gains) losses, net | (391 | ) | (206 | ) | |||
Deferred income taxes | (748 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 32,149 | 10,318 | |||||
Prepaid expenses and other assets | 672 | 2,919 | |||||
Accounts payable and accrued expenses | (34,018 | ) | (14,415 | ) | |||
Other liabilities | (117 | ) | (939 | ) | |||
Net cash provided by (used in) operating activities | 9,808 | (22,552 | ) | ||||
INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (5,605 | ) | (5,474 | ) | |||
Capitalized internal use software development costs | (6,000 | ) | (6,569 | ) | |||
Investments in available-for-sale securities | — | (23,991 | ) | ||||
Maturities of available-for-sale securities | 7,500 | 55,650 | |||||
Sales of available-for-sale securities | — | 9,228 | |||||
Net cash (used in) provided by investing activities | (4,105 | ) | 28,844 | ||||
FINANCING ACTIVITIES: | |||||||
Proceeds from exercise of stock options | 529 | 45 | |||||
Proceeds from issuance of common stock under employee stock purchase plan | 477 | 143 | |||||
Taxes paid related to net share settlement | (1,847 | ) | (658 | ) | |||
Net cash used in financing activities | (841 | ) | (470 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (192 | ) | (110 | ) | |||
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 4,670 | 5,712 | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period | 80,452 | 76,642 | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period | $ | 85,122 | $ | 82,354 | |||
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION: | |||||||
Cash paid for income taxes | $ | 300 | $ | 272 | |||
Cash paid for interest | $ | 46 | $ | 46 | |||
Capitalized assets financed by accounts payable and accrued expenses | $ | 2,005 | $ | 3 | |||
Capitalized stock-based compensation | $ | 401 | $ | 394 | |||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ | 13,074 | $ | — |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Net loss | $ | (6,174 | ) | $ | (13,792 | ) | $ | (27,001 | ) | $ | (59,592 | ) | |||
Add back (deduct): | |||||||||||||||
Depreciation and amortization expense, excluding amortization of acquired intangible assets | 7,309 | 7,971 | 22,537 | 23,967 | |||||||||||
Amortization of acquired intangibles | 718 | 796 | 2,304 | 2,388 | |||||||||||
Stock-based compensation expense | 4,713 | 3,860 | 13,877 | 13,016 | |||||||||||
Interest income, net | (218 | ) | (232 | ) | (625 | ) | (777 | ) | |||||||
Foreign exchange gain, net | (296 | ) | (120 | ) | (138 | ) | (363 | ) | |||||||
Provision (benefit) for income taxes | 55 | 84 | (569 | ) | 233 | ||||||||||
Adjusted EBITDA | $ | 6,107 | $ | (1,433 | ) | $ | 10,385 | $ | (21,128 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
Net loss | $ | (6,174 | ) | $ | (13,792 | ) | $ | (27,001 | ) | $ | (59,592 | ) | |||
Add back (deduct): | |||||||||||||||
Acquisition and related items, including amortization of acquired intangibles | 718 | 796 | 2,304 | 2,388 | |||||||||||
Stock-based compensation expense | 4,713 | 3,860 | 13,877 | 13,016 | |||||||||||
Foreign exchange gain, net | (296 | ) | (120 | ) | (138 | ) | (363 | ) | |||||||
Tax effect of Non-GAAP adjustments (1) | (38 | ) | (35 | ) | (190 | ) | (64 | ) | |||||||
Non-GAAP loss | $ | (1,077 | ) | $ | (9,291 | ) | $ | (11,148 | ) | $ | (44,615 | ) |
(1 | ) | Non-GAAP loss includes the estimated tax impact from the expense items reconciling between net loss and non-GAAP loss. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | ||||||||||||
GAAP net loss per share (1): | |||||||||||||||
Basic and Diluted | $ | (0.12 | ) | $ | (0.27 | ) | $ | (0.52 | ) | $ | (1.19 | ) | |||
Non-GAAP loss (2) | $ | (1,077 | ) | $ | (9,291 | ) | $ | (11,148 | ) | $ | (44,615 | ) | |||
Weighted-average shares used to compute net loss per share (3) | 53,023 | 50,513 | 52,324 | 50,095 | |||||||||||
Non-GAAP loss per share | $ | (0.02 | ) | $ | (0.18 | ) | $ | (0.21 | ) | $ | (0.89 | ) |
(1) Calculated as net loss divided by basic weighted-average shares used to compute net loss per share as included in the consolidated statement of operations. |
(2) Refer to reconciliation of net loss to non-GAAP loss. |
(3) Non-GAAP loss per share is computed using the same weighted-average number of shares that are used to compute GAAP net loss per share in periods where there is both a non-GAAP loss and a GAAP net loss. |
Revenue | |||||||||||||
Three Months Ended | |||||||||||||
September 30, 2019 | September 30, 2018 | ||||||||||||
(in thousands, except percentages) | |||||||||||||
Channel: | |||||||||||||
Desktop | $ | 15,936 | 42 | % | $ | 12,481 | 42 | % | |||||
Mobile | 21,706 | 58 | 17,248 | 58 | |||||||||
Total | $ | 37,642 | 100 | % | $ | 29,729 | 100 | % |
Revenue | |||||||||||||
Nine Months Ended | |||||||||||||
September 30, 2019 | September 30, 2018 | ||||||||||||
(in thousands, except percentages) | |||||||||||||
Channel: | |||||||||||||
Desktop | $ | 47,745 | 44 | % | $ | 40,453 | 49 | % | |||||
Mobile | 60,183 | 56 | 42,800 | 51 | |||||||||
Total | $ | 107,928 | 100 | % | $ | 83,253 | 100 | % |