One of last year's big winners was The Meet Group (NASDAQ:MEET). The social discovery and dating app developer saw its stock soar 64% in 2018, and it's kicking things off right in the new year by boosting its earlier projections.
Preliminary financial results for the quarter that ended last week find revenue clocking in at $52.3 million, a year-over-year increase of 30% -- and well ahead of the $47.8 million to $48.8 million that it was targeting two months ago. The Meet Group is also naturally boosting its full-year guidance, something that it has now done four times over the past nine months for its 2018 performance.
New products and features are gaining traction, and the stock was already on a recent roll ahead of Tuesday morning's rosier touch-up. The stock is moving higher for the ninth trading day in a row, up roughly 36% in that span of two weeks as of early Tuesday afternoon.
Winning the war with Battles
Two key elements that are fueling The Meet Group's ascending popularity are Battles and streaming video. The Meet Group didn't introduce live-streaming until late 2016, but it's already moving the needle. Video revenue is on an annual run rate of $71 million based on last month's performance, a pretty big deal for an app developer with just $123.8 million in revenue in 2017 and now eyeing $178.5 million for all of 2018.
Video revenue grew sequentially across all of its apps during the fourth quarter, and ad revenue also experienced a hearty 19% sequential boost. There could be some seasonal juice lifting the fourth quarter -- The Meet Group ran a promo emphasizing its virtual gifting feature over the holidays -- but it's hard to argue with the momentum here.
Battles is the next evolutionary step for the live-streaming platform. A pair of live-streaming users and their respective audiences pair up to compete in anything from dancing to telling jokes. Viewers vote on the winner via virtual gifts. It may seem hokey and a transparent cash grab on The Meet Group's part, but the growing audiences are digging it. An average of 30,000 Battles a day are taking place across its social platforms.
The Meet Group remains off of most investing radars despite its monster gain in 2018 and its head start on beating the market again in 2019. The Meet Group was the 2011 combination of myYearbook and Quepasa, and it continues to add small social hotbeds. It acquired global social discovery app Skout in 2016, following a year later with the purchase of German dating-app developer Lovoo.
Assembling a collection of niche social discovery and dating sites and then introducing features including video and more recently Battles across the sites is brilliant. The Meet Group is leveraging its resources, and it's paying off with a story that keeps getting better with every passing quarter. It's already beating the market a few days into 2019, and the outlook remains encouraging for The Meet Group to keep the momentum going.
Check out the latest The Meet Group earnings call transcript.