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Meet Group (NASDAQ:MEET)
Q4 2018 Earnings Conference Call
March 6, 2019 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to The Meet Group's fourth-quarter and full-year 2018 earnings call. [Operator instructions] As a reminder, today's call will be recorded. I would now like to turn the call over to Leslie Arena, vice president of investor relations. Ma'am, you may begin.

Leslie Arena -- Vice President of Investor Relations

Thank you. Good morning, and welcome to The Meet Group's fourth-quarter and full-year 2018 earnings conference call. With me today are Geoff Cook, our CEO; and Jim Bugden, our CFO. At the conclusion of our prepared remarks, we will be happy to take your questions.

As a reminder, today's discussion will include statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. More information about those risks and uncertainties is contained in our SEC filings. We caution you against placing undue reliance on these statements and disclaim any intent or obligation to update them.

In addition, as we refer to earnings, we also will refer to adjusted EBITDA, which we define as earnings or loss from operations before interest expense; benefit or provision for income taxes; depreciation and amortization; stock-based compensation; changes in warrant obligations; nonrecurring acquisition; restructuring or other expenses; gain or loss on disposal of assets; gain or loss on foreign currency adjustment; and goodwill on long-lived asset impairment charges, if any. Adjusted EBITDA is a non-GAAP financial measure, and you can find a reconciliation to GAAP in our earnings release, which is posted on the IR section of our website. We believe that the use of adjusted EBITDA provides additional insight for investors to use in evaluation of operating results and trends. However, it should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.

I would now like to turn the call over to Geoff.

Geoff Cook -- Chief Executive Officer

Good morning, and thank you for joining us on the call. 2018 was a strong year for The Meet Group. We delivered solid results across our business while executing in our vision to create meaningful connections for our users through live video. In 2018, we increased revenue by 44% year over year to $176.8 million.

The increase was driven largely by LOVOO, which were acquired in October of 2017, as well as by strong growth in video revenue. Adjusted EBITDA was $32 million in 2018, an increase from $31.6 million in 2017. For the fourth quarter of 2018, we grew revenue by 31% year over year to $52.5 million. We generated $10.6 million of adjusted EBITDA, which was roughly flat year over year due primarily to the shift in revenue mix from predominantly advertising to predominantly user pay, which typically has lower margins than advertising.

Our results reflect the meaningful progress we've made transforming our business. In 2018, we generated 60% of our revenue from user pay sources, including subscription and in-app purchases. This is up from 27% in 2017 and speaks to our progress growing live video revenue and acquiring new user communities. In just 15 months since launching video monetization in our MeetMe app, we grew video revenue from virtually zero to a $71 million annualized run rate for the month of December across the portfolio.

And we are off to a good start in 2019, with the annualized video run rate increasing to more than $82 million for the month of February. We believe we are still at the early stages of delivering on the full potential of live video as we've only just recently completed the rollout of video monetization features to all of our apps, other than of course Growlr, which we acquired yesterday and which I will discuss shortly. As I previously discussed, we first observed the success of live video and apps throughout Asia in 2016. By 2017, we had built and launched a video platform to bring live to our MeetMe users and to users of our first acquired property, Skout.

In 2018, we expanded live to Tagged and LOVOO. And by mid-2018, live monetization was available across our entire platform. At our core, The Meet Group is and has always been about building community and connection. With live video, we strengthened that capability.

Where previously connections were made very textbased chats, likes and photos, now they are also made with live video, which we believe provides opportunity for far richer, more meaningful connections. We believe our solid execution against our mission to meet the needs for human connection has enabled our strong results. In the fourth quarter of 2018, we grew video revenue not only in total, but for each app compared to the third quarter. Global average revenue per daily active video or vARPDAU was $0.18 in the fourth quarter, an increase from $0.14 in the third quarter.

The average number of daily active users of video in the fourth quarter grew to 916,000 from 870,000 sequentially as approximately 20% of users across our platform engaged in video on a daily basis. We increased the average number of daily streamers to 138,000 in the fourth quarter, up from 117,000 sequentially as streamers continued to be attracted to the monetization opportunity in our large user base. Building on the success we've achieved in video, our goal is to be the best place to meet new people through video. In support of that objective, we've established three priorities for 2019: one, invest in the core business; two, expand into adjacencies to attract new audiences; and three, grow margins.

I will now discuss each of these in more detail. Our first priority is to invest in our core business and features. Having made significant progress transforming our business, we are focused on strengthening our core video platform. This includes building new features to drive monetization, to attract new video users and to enhance the user experience.

In December, we brought battles to Meet Me and Skout, and we launched it last month on Tagged. We expect to launch battle on LOVOO later this month. battles brings together two live streamers in a competition with the objective of increasing use engagement and monetization. Viewers can give gifts to support their favorite streamer, and the streamer with the most votes is named the winner.

Upon launch, users are quickly attracted to the fun and competitive aspects of battles, giving gifts, engaging in chat and battling each other. While still early, results have been encouraging with battles comprising a meaningful portion of daily credit spending. Additionally, we expect to introduce enhancements to live video search and discovery in order to enable users to find the streamers of greatest interest to them. We also plan to make it easier for streamers to identify top fans and to determine their progress through generating followers and gifts.

We have begun as well to invest in interactive games, events and shows while expanding our global talent team to capitalize on emerging user behaviors. One of the major features we look forward to launching is Levels, which we're planning to introduce in the third quarter of 2019. Levels adds a gamification element to live by establishing aspirational ranks for users to achieve and exclusive benefits for them to unlock. We expect Levels to increase user engagement as streamers and gifters strive to reach higher levels while competing for recognition bonuses and other benefits.

Users have traditionally responded well to contests, badging and other forms of recognition. Levels provides tangible rewards that we expect will stimulate user behavior as streamers and their fans work to progress through the ranks. Investing our core video platform also means expanding our current suite of video options. Our video product has grown quickly from zero to 29% of our revenue in the fourth quarter of 2018, all from a single type of video interaction, broadcast video in which one or two users can broadcast to a large audience.

In 2019, we intend to complement broadcast video with one-on-one and group video to enable different types of rich interactions among our members. We envision a not-too-distant future in which virtually every tab of our apps leads with video, in which our foundational textbased chat system is a feeder to one-on-one video and in which we continue to explore innovative concepts like battles and other interactive video formats. We believe by doing so, we will enrich our users interactions while driving engagement and monetization. Our second priority is to expand into adjacencies to attract new audiences.

We plan to expand our product offerings to new geographies, niches and use cases, both organically and inorganically. This includes the development of stand-alone apps that we believe will enable community and connection for users beyond our existing audience and help our users find their tribe, whatever their interest may be. Expanding into adjacencies also includes acquiring communities of significance, as we announced this morning with the acquisition of Growlr. We are thrilled to add Growlr to The Meet Group as the fifth of our core apps.

Growlr is a global same-sex dating and social media app, which we believe provides us with a meaningful entrée into the gay dating space. Like LOVOO, Growlr operates on a subscription and freemium model, allowing users to download the app and use basic features for free, with the option of making in-app purchases and subscribing for premium membership. Growlr has more than 200,000 highly engaged DAU, who exchange millions of messages each day. Importantly, similar to what was done with other acquired properties, we plan to be aggressive in bringing our video model to Growlr and to same-sex dating generally.

We expect to begin rolling out live video to the app in the fourth quarter of 2019. We also see opportunities to grow advertising revenue in the app. We expect full-year pro forma revenue and adjusted EBITDA for Growlr in 2019 to be approximately $5.3 million and $3.1 million, respectively. The app has a highly effective cost structure, contributing to planned adjusted EBITDA margins in excess of 50% once fully integrated.

We acquired the app at an attractive valuation of approximately 4.5 times pro forma 2019 EBITDA, using cash on hand and bank debt for $11.8 million, plus an earnout of up to $2 million contingent upon achieving revenue targets over the next two years. Growlr is accretive to adjusted EBITDA margins. As we invest in our core and expand into adjacencies, we must stay focused on our third priority, growing adjusted EBITDA margins. We believe we can grow adjusted EBITDA while also investing in our fast-growing video business by implementing ongoing cost improvements, as we continue to scale video by enacting price optimizations to certain networks based on our learnings and others and from marketing efficiencies and cross-promotional opportunities.

Jim, our CFO, will provide further comment on our margin-impacting plans. Beyond video, I'd like to take a moment to discuss our results and outlook in advertising. Our fourth quarter of 2018 advertising results were strong. Nearly two years after the macro disruption to the advertising markets, we continue to see signs of stabilization and a return to traditional seasonal advertising patterns.

Advertising revenue in the fourth quarter were seasonally strong, increasing 20% from the third quarter, our third consecutive quarter of improving sequential results. That's the larger sequential percentage gain in 2018. In addition to our strong financial and operating metrics, I'd like to highlight a recent recognition for LOVOO, which won one the 2018 Google Play Users' Choice award for the Best Dating App in Germany. This is a noteworthy accomplishment that speaks to the value and appeal of the LOVOO app.

With a relatively small but able team, we have managed to achieve significant scale while innovating as fast as anyone in the mobile meeting space, both in the U.S. and in Europe. In summary, we had a great year in 2018, and we have tremendous momentum entering 2019. Guided by our commitment to create meaningful connections, we executed across the entire business, driving enormous video engagement and significant monetization.

What's more, we believe we are still early. Now 20% of our users engage with our video products every day. We believe this number has room to run in 2019 and beyond as we put video at the core of our user experience. I'm thankful for our large and loyal and engaged users, and I'm confident that we have the plan and the team to execute on our ambitious objectives.

With that, I'll pass the call to Jim.

Jim Bugden -- Chief Financial Officer

Thanks, Geoff. I'm pleased to report our results for the fourth-quarter and full-year 2018. As in prior quarters, I will review our results on an as-reported basis unless otherwise specified. I'll begin with our progress growing revenue.

Total revenue for the fourth-quarter 2018 was $52.5 million, an increase of 31% from $40.1 million a year ago. User pay revenue in the fourth-quarter 2018 was $31.3 million, an increase of 103% from the $15.4 million in the fourth-quarter 2017. This increase was due largely to the phenomenal growth in video, offset in part by decline in non-value user pay revenue, largely coming from the legacy web-based product on one of our brands. Video revenue, which is a component of user pay revenue, for the quarter was $15.2 million.

Advertising revenue in the fourth quarter was $21.2 million, a decline of 14% from $24.7 million in the fourth quarter of 2017. Total pro forma revenue in the fourth quarter grew 22%. Pro forma user pay revenue was up 75% compared to the fourth quarter of 2017, while pro forma advertising declined 16% from the year-ago quarter. We are continuing to narrow the year-over-year declines in advertising revenue.

As you'll recall, we began Q1 2018 with ad revenue down 36% year over year, Q2 down 32%, Q3 down 31%, and Q4 down 16%. We now expect Q1 to be down approximately 10%. On a sequential basis, we grew ad revenue every quarter in 2018. Ad revenue for the second quarter increased 13% from the first, the third grew 2.5 from the second, and the fourth grew 20% from the third.

Adjusted EBITDA from the fourth quarter was $10.6 million, an increase from $10.5 million in the year-ago quarter, which we attribute to the shift in revenue mix to predominantly user pay, which carries a lower direct margin than advertising. Adjusted EBITDA margin in the fourth quarter was 20.2% due largely to advertising seasonality. For the full year, adjusted EBITDA margin was 17.9%. As we move into 2019, we expect to improve video margins.

With one year of video monetization experience now behind us, we can better forecast and record for forfeited rewards or breakage. Reward breakage occurs when streamers churn or stop using their account and leave a balance of outstanding rewards behind, sometimes well below thresholds at which they qualify to claim those rewards. Accounting for breakage, we believe our direct video margins can increase to the mid-30% range from roughly 30% in the fourth-quarter 2018. GAAP net income for the fourth quarter was $4.3 million or $0.06 per share compared to a net loss of $68.1 million or a loss per share of $0.95 in the fourth quarter of 2017.

Moving to expenses. Sales and marketing expense for the fourth quarter was $8.5 million, down 2% from $8.7 million in Q3 as user acquisition spending remained steady quarter-over-quarter. User acquisition marketing spend as a share of revenue in Q4 was 13%, down from 15% in Q3 on stronger fourth-quarter revenue. year over year, fourth-quarter sales and marketing expense was 2.4 -- was up $2.4 million from $6.1 million a year ago, due to a renormalization of marketing spend, which began in the first quarter of 2018, and the inclusion of LOVOO for a full quarter in 2018.

We ended the fourth quarter with mobile DAU of 4.27 million, up slightly from 4.26 million in the third quarter. Mobile MAU increased to 15.2 million, up from 14.6 million in the third quarter. Product development and content expenses for the quarter were $30.1 million, up from $19.7 million a year ago due largely to an increase in mobile content cost of $10.1 million attributable to increased adoption of live video across all of our apps. As a reminder, the product development and content expense line is where we record the video-related app store fees to Apple and Google as well as rewards that we pay to streamers.

General and administrative expenses for the quarter were $5.5 million, down from $6.5 million a year ago due largely to a decrease in stock-based compensation costs. Shifting to the balance sheet and cash flow. We ended the quarter with $28.4 million in cash and cash equivalents, an increase from $21.8 million sequentially. We continued to generate meaningful cash from operations, which was $10.4 million in the fourth quarter of 2018, an increase from $8.6 million in both the year-ago quarter and sequentially.

We incurred $2.1 million of capital expenditures in the fourth quarter for data center equipment upgrades. Our fourth-quarter CAPEX spend represented 84% of total CAPEX for the year largely due to timing. We expect full-year CAPEX in 2019 to remain in the $2 million to $3 million range. Our resulting free cash flow for the fourth quarter of 2018 was $8.3 million.

With scheduled quarterly debt payments of $3.8 million plus a contractual excess cash flow payment of $4.3 million in the third quarter, we reduced net debt by $23 million over the course of 2018 to $8 million as of December 31. As required every year under our term loan facility, we expect to make an excess cash flow payment of approximately $3.6 million in the first quarter of 2019. This payment occurs once per year based on certain cash generation thresholds. For the full-year 2018, we reported revenue of $178.6 million, up from $123.8 million a year ago, an increase of 44%.

We attribute this increase primarily to the acquisition of LOVOO and the growth in live video. Adjusted EBITDA for the year was $32 million, up from $31.6 million a year ago. Net income for the full year was $1.2 million compared to a net loss of $64.6 million a year ago, which included $12.2 million in acquisition and restructuring expenses and $56.4 million in onetime noncash charges. EPS was $0.02 for the full-year 2018 compared to a negative $0.94 for the full-year 2017.

We generated $28.6 million in cash from operations. CAPEX for the year was $2.5 million. And we generated $26.1 million in free cash flow for the year. As Geoff mentioned, we acquired Growlr for $11.8 million, using cash on hand of $4.8 million and accessing our existing line of credit for $7 million, plus an earnout of up to $2 million to be paid in annual $1 million installments over the next two years if certain revenue metrics are achieved in this year.

Financial results from Growlr will be consolidated and included in The Meet Group results beginning on March 5, 2019. For 2019, we expect full-year pro forma revenue and adjusted EBITDA of approximately $5.3 million and $3.1 million from Growlr, respectively. Consistent with our other acquisitions, we expect purchase accounting adjustments to reduce 2019 GAAP revenue and EBITDA to account for revenue recognition adjustments on subscriptions purchased prior to the closing. We do not expect booked revenue or cash flow to be impacted by these GAAP adjustments.

Moving to guidance. For the full-year 2019, we expect revenue to be in the range of $210 million to $215 million. This includes revenue from Growlr of approximately $4 million and is impacted by a negative $2.3 million of foreign currency changes from LOVOO when compared to the prior year. We expect the revenue split of user pay revenue and advertising revenue for the full year to be approximately 70% and 30%, respectively.

We expect to end 2019 with approximately $88 million of video revenue, more than doubling the $39 million generated in 2018. Note that this expectation is included in the full-year guide, reflecting an update to our guidance approach from 2018 where we did not include any upside beyond the current video run rate. We expect adjusted EBITDA for the year to be in the range of $39 million to $42 million. This includes approximately $1.5 million of adjusted EBITDA from Growlr.

For the first quarter 2019, we expect revenue to be in the range of $47.5 million to $48 million. This is impacted by a negative $1.2 million of foreign currency changes from LOVOO, reflected primarily in the non-video user pay and subscription line when compared to the prior-year quarter. We expect the revenue split of user pay revenue and advertising in the first quarter to be approximately 71% and 29%, respectively. Video revenue included in our user pay -- in user pay is expected to be in the range of $18.8 million to $19 million for the quarter.

Due to purchase accounting rules, we do not expect to recognize meaningful revenue from Growlr in the first quarter. We expect adjusted EBITDA for the first quarter to be in the range of $7 million to $7.5 million. Looking longer term at the growth prospects of the video -- our video business, we expect the majority of our revenue will come from video beginning in 2021. We also expect to continue to increase both the share of video DAU and the vARPDAU from current levels.

In particular, we expect to roughly double video revenue from 2019 levels by 2021. We also expect to achieve long-term adjusted EBITDA margins exceeding 20%. In summary, we continue to transform our business, grow revenue and generate significant free cash flow. We are pleased to reported a great year and are eager to continue to grow our business in 2019.

With that, we'll move to Q&A. 

Questions and Answers:

Operator

[Operator instructions] And our first question comes from Austin Moldow with Canaccord. Your line is open.

Austin Moldow -- Canaccord Genuity -- Analyst

Hi, thanks for taking my questions and congrats on the success of the quarter and acquisition. I want to start out with a video monetization question that's kind of twofold. The first part is, can you speak to the impact that Valentine's Day had in your February period, and whether there's anything special you do around these kind of events or holidays? And the second part is, can you speak to the monetization trends after Valentine's Day maybe into early March? In other words, I'm kind of wondering what your expectation is after this very strong February peak that you had.

Geoff Cook -- Chief Executive Officer

Sure. Thanks, Austin. This is Geoff. Yes, we're seeing tremendous momentum in the video business.

Speaking to Valentine's Day in particular, I think Valentine's Day was a solid weekend for us, but we've since continued to hit new heights since that weekend in daily video revenue. We did see -- I think Christmas was actually, which is somewhat interesting aside that Christmas was actually probably the busier period. I think the fact that of course Christmas and holiday periods tend toward gifting in particular. We saw a lot of activity around our 12 days of Christmas promotion.

The Valentine's Day promotions were good, but we think Christmas was where we really saw kind of surprising activity levels. But like I said, since Valentine's Day, we've seen continued gains, and in particular a new record set since that. Yes as to the monetization trend, yes, I mean I think the trend has been linearly up.

Austin Moldow -- Canaccord Genuity -- Analyst

OK. That's really helpful. My next question I wanted to touch on, user growth in general. So the pro forma growth to mobile DAU was kind of flat year over year, just a tick up.

I'm wondering, can you get it to -- can you jump start growth in 2019? And if so, what does that mean for user acquisition spend?

Geoff Cook -- Chief Executive Officer

Yes. I mean, I think we do expect to grow DAU both organically and inorganically in 2019. Our current marketing spend level being 13% to 14% range for Q1 and also for the year, obviously, if we're seeing, and we have been seeing growing vARPDAU levels and growing our DAU levels, we would contemplate potentially increasing that spend and capture more DAU. But I think our plan is to grow DAU organically modestly, while looking at opportunities for inorganic growth, both as kind of indicated by the Growlr acquisition as well as kind of through opportunities for new products that might reach our audiences in different ways, so for brands beyond the core five.

Austin Moldow -- Canaccord Genuity -- Analyst

Got it. And my last question is on Growlr. So the price you paid seems to imply a bit better than you've gotten in your past acquisitions. Is there anything to speak to there? And can you maybe comment on the kind and size of team that will be coming onboard to The Meet Group?

Geoff Cook -- Chief Executive Officer

Yes. So I think the price is we think a good one. I think the the main difference between Growlr and some of the other acquisitions we made is that yes one, of course, it's significantly smaller, so the scale may not command such a premium. And two, the team is much smaller, so there's really only two employees that are coming over and there's only really two employees in the company.

So it was a tremendous growth story for the founder to be able to do so much kind of a bootstrapped start-up. But yes, both employees of the company will be joining The Meet Group.

Austin Moldow -- Canaccord Genuity -- Analyst

OK. Thanks very much.

Leslie Arena -- Vice President of Investor Relations

Next question, operator.

Operator

Thank you. And our following question is from Jed Kelly with Oppenheimer. Your line is open.

Jed Kelly -- Oppenheimer -- Analyst

Great. Thanks for taking my question. My first question is, I guess as your video revenue scales, are you seeing now a lot more acquisition opportunities that you can acquire at favorable multiples and generate better revenue synergies through video?

Geoff Cook -- Chief Executive Officer

Yes. So let me -- I think we do think that there are a number of opportunities that are out there in the marketplace. I think that that being said, I think there's also just a lot of opportunities for organic growth that we are exploring. And probably that's where we are actually most confident in, in some of the organic growth opportunities to bring an increase the video penetration among our users.

There are some interesting M&A opportunities that are out there, but really no change to what our stance has been. We'll continue to be opportunistic evaluating these. We obviously didn't do any M&A in 2018, in part because we were digesting, in part because the opportunities did not present themselves. And I think you can look into the Growlr price we paid to show that we are disciplined as it comes to M&A.

Jed Kelly -- Oppenheimer -- Analyst

And then in the prepared remarks, did you say first quarter advertising was only going to be down 10%?

Geoff Cook -- Chief Executive Officer

Yes, that's correct.

Jed Kelly -- Oppenheimer -- Analyst

So then implies it's a pretty decent acceleration throughout. Should we expect that same level of growth throughout the entire year? Or how should we be thinking about advertising?

Jim Bugden -- Chief Financial Officer

Yes. So the 9% was a year-over-year number in terms of the decline. And then we expect that 9% to 10% to remain constant in terms of year-over-year decline each quarter for the rest of the year.

Jed Kelly -- Oppenheimer -- Analyst

Got it. And then I guess as you start to introduce one-on-one video streams, I mean, did you face any difficulties leveraging some of your product development expenses with the moderators? Or how does that differ from more video streams that are more concurrent?

Geoff Cook -- Chief Executive Officer

It's fairly extensible. The solution we have at moderation is built in such a way that allows us to extend it to actually various video use cases. It essentially relies upon sampling the stream algorithmically looking for objectionable content, and our algorithms have gotten quite a bit better doing this over the years that we've been moderating, and then combine it with substantial human review team. And one-on-one video and group video kind of follows a similar rubric.

So there's going to be combination of machine review, user reports as well as human review.

Jed Kelly -- Oppenheimer -- Analyst

Got it. And then just one more I guess, on sort of the -- I mean, is there any way you can sort of parse out the monetization rate you would expect on the one-on-one videos versus the concurrent streams?

Geoff Cook -- Chief Executive Officer

Yes. I mean, we don't have any guide we're sharing as it relates to one-on-one or ARPDAU, for example. We do think that there is kind of some gains to be had on the share of vDAU. One-on-one is priced primarily around driving users who are not in video today to come into video.

And many of our users who are not in video today, what they're doing is they're finding other users in our nearby grid or grid of users who are nearby you, and they are chatting them through text and photo chat. We want some of those tax and photo chats to migrate to one-on-one video chats, because we think that will increase our video DAU and increase your comfort levels with video and will likely lead you to look at other video offerings. There will be some monetization products within the one-on-one as well, but I think where we are particular excited about one-on-one is more on the share of vDAU set.

Jed Kelly -- Oppenheimer -- Analyst

Thank you.

Operator

Thanks you. And our following question comes from Mike Latimore with Northland Capital Markets. Your line is now open.

Unknown speaker

I'm calling in for Mike Latimore. I have two questions. One is related to LOVOO Germany. Do you see LOVOO Germany having same or slightly better vARPDAU and vDAU than MeetMe over time?

Geoff Cook -- Chief Executive Officer

Yes. So I'm not sure I caught the question entirely, but it was LOVOO and how is the vARPDAU evolving on LOVOO. And happy to comment on LOVOO versus expectation. I think what's interesting is live video on LOVOO is already more than a quarter of its revenue in Q1.

So live video for LOVOO is already the fastest growing product in LOVOO's history, just as it has been for Skout and Tagged. We're very pleased to see Europeans engaging live video in very much the same way as they are in the U.S. properties. As far as how does LOVOO vARPDAU levels compare to MeetMe, we don't break out vARPDAU by application, although I will say we are seeing -- what we do see is that at this stage this data into the launch of video on LOVOO, we're very, very pleased with the strengths we're seeing.

In some cases, LOVOO metrics are above MeetMe's. I've said, we have gifters per vDAU who share videos, gifts, tend to -- have really from the beginning been highest on LOVOO. And that's only continuing and increased. Meanwhile, share of vDAU has lagged maybe a little bit, but we have an aggressive pipeline expanding the video footprint across LOVOO as we do for the other apps.

What we're focused on right now as it relates to driving LOVOO vARPDAU besides having planning to roll out battles of this month is really expanding the talent team in languages to be in German. I feel like we're doing a pretty good job surveying the German Austria, Swiss market right now. And we could be doing a better job on French, Spanish, Italian as far as training of broadcasters. But what we're seeing on LOVOO is kind of in line with what our expectation has been.

In any event, it's really toward growth in the LOVOO video product.

Unknown speaker

OK. How many battles per day are you right now doing?

Geoff Cook -- Chief Executive Officer

We don't split out the battles per day, but it's a meaningful portion of all of the diamonds, all of the credit spend in the apps. So it's material, it's significant. Battles was recently launched on Tagged where we're seeing some very strong week in the last week or so since Tagged has battles and is clearly additive to revenue.

Unknown speaker

Yes. Thanks.

Geoff Cook -- Chief Executive Officer

Thank you.

Operator

Thannk you. Our next question comes from Darren Aftahi with Roth. Your line is open.

Darren Aftahi -- ROTH Capital Partners -- Analyst

Hi, guys. Thanks for taking my questions. A couple, if I may. First, could you clarify the run rate? I think you said $88 million aggregating the year.

Is that assuming a December monthly run rate for video, just for clarification purposes?

Jim Bugden -- Chief Financial Officer

Sure. So the run rate number, Darren, for February was 82. We exited the year with $88 million of revenue. So we want to switch this year from a run rate update on regular basis and rather provide revenue.

Now that we've got a year of monetization behind us, we've got products that deliver significant growth, it's more meaningful to give the revenue number, which is what's in Q4 and for full year of 2019. So you can kind of do some math to get to a run rate. But that's not a run rate number, that was a revenue number.

Darren Aftahi -- ROTH Capital Partners -- Analyst

OK. Got it. That's helpful. And then on video ARPDAU, I know you gave $0.18.

Can you just clarify just for modeling purposes, what exactly that number was maybe to another decimal? Then I'm curious, Geoff, in the past, I think you've talked about MeetMe's kind of upper-end reach for video ARPDAU as maybe in the $0.40 plus. I'm curious with now a year under your belt for MeetMe, if you have any updated thoughts there, and then perhaps how you see that compared to say something like LOVOO.

Geoff Cook -- Chief Executive Officer

Sure. So I think Jim will hunt down an extra decimal for you. But as it relates to MeetMe's upper end, I mean I think what Jim mentioned is that we think we can essentially double video revenue from 2019 levels to 2021. And if we were able to achieve -- and we think there's multiple ways of getting there.

But if we're able to achieve 35% of our users watching video every day, up from 20%, and $0.35 vARPDAU level across the entire portfolio, up from $0.20, that would essentially be exiting around $200 million annualized run rate. And we'd doubled $88 million, roughly double the $88 million in 2019. And our goal in 2019 is to really be focused on driving these gains in vARPDAU and vDAU. As it relates to MeetMe in particular, I think there is -- we've seen no reason to think there's a ceiling on the vARPDAU, certainly, U.S.

vARPDAU [Inaudible]. I mean so we see not in any given month, but we see like good days topping out at these levels. We think there's quite a bit of room to run for vARPDAU, both on MeetMe and across the portfolio. As it relates to LOVOO and vARPDAU, I think we are very happy with where LOVOO is, as I mentioned.

I do think that from a share of vDAU, I think in the long run LOVOO was a little bit lower in share of vDAU than long run MeetMe. But from the share of from vARPDAU, I think the jury is still a little bit out. We're still fairly early in the LOVOO video rollout.

Jim Bugden -- Chief Financial Officer

And Darren, the third decimal on the $0.18 is actually zero, so we're right on the button.

Darren Aftahi -- ROTH Capital Partners -- Analyst

Perfect. Great. And just last one left for me. So on Growlr, can you just give us a sense a couple of things.

One, how fast was that business growing vis-à-vis that 5.3 million number you gave for revenue? Two, I looked on the app. So this is 200,000 daily, 10 million members. So how many MAU does it have? And then what's the mix, I assume most of this is subscription, of the revenue composition?

Jim Bugden -- Chief Financial Officer

Yes. We've included Growlr for 2019. I mentioned the numbers, the biggest difference here, 5.3 is the pro forma number. We lose two months for January or February when we didn't have the asset.

And then there's further revenue reduction for '19 due to purchase accounting rules. We've not given any guidance beyond 2019 for Growlr, but we do think there are a number of growth opportunities. We'll add video, number one. And similar to other acquisitions, we believe the ad platform is suboptimized compared to what we're able to do with our ad team and measured, so we're happy with -- we're looking forward to grow for Growlr.

In the app store, we see that member count, that's the total that have registered over the lifetime, somewhat of an vanity metric. The DAU that we mentioned of around 200,000 MAU [Inaudible] -- I'll get you an MAU number. But the ratios are pretty good. We've seen on other apps in this sector that you have good engagement rates, both on retention of subscribers, but also on the DAU and MAU ratios.

I'll find that number specifically for you. And then revenue mix, over 90% or above 90% of the revenue is coming from non-ad sources, advertising a small piece of it. It's largely a subscription business today.

Darren Aftahi -- ROTH Capital Partners -- Analyst

Great, then just for clarification. So I guess, what's the Growlr implied revenue '18 to '19? Would you care to share that?

Jim Bugden -- Chief Financial Officer

Yes. It's been growing. Again, we'll be able to put video and some ad on it. We didn't give the '18 number, but there's solid growth on Growlr.

Darren Aftahi -- ROTH Capital Partners -- Analyst

Great. Thank you.

Operator

Thank you. And I'm not showing any further questions at this time. I will pass it back to Leslie to conclude the call.

Leslie Arena -- Vice President of Investor Relations

Thank you. With no further questions, we'll conclude today's call. Thanks, everyone, for joining us. Have a good day.

Duration: 45 minutes

Call Participants:

Leslie Arena -- Vice President of Investor Relations

Geoff Cook -- Chief Executive Officer

Jim Bugden -- Chief Financial Officer

Austin Moldow -- Canaccord Genuity -- Analyst

Jed Kelly -- Oppenheimer -- Analyst

Darren Aftahi -- ROTH Capital Partners -- Analyst

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