Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of The Rubicon Project (NYSE:RUBI), an automated digital advertising company, were up 11% near the end of the trading day Wednesday after the company handily beat analyst earnings estimates and provided strong guidance for 2015.
So what: Rubicon's revenue grew by 49% year over year during the fourth quarter, to $41.8 million, beating analyst estimates by about $2 million. Non-GAAP EPS came in at $0.25, well above analyst expectations of just $0.03.
Rubicon was also profitable on a GAAP basis for the quarter, although the company lost $18.7 million for the full year on $125.3 million in revenue. Expenses grew faster than revenue for the full year, with sales and marketing expenses rising 67%, and general and administrative expenses more than doubling.
The company's guidance for both the first quarter and for 2015 came in well above expectations. Rubicon expects revenue of $34 million to $35 million during the first quarter, above the $31.7 million analyst consensus, and $175 million to $178 million for the full year, well above the $158.6 million expected by analysts. Non-GAAP earnings are expected to be between $0.20 and $0.25 per share in 2015, compared to $0.20 per share in 2014.
Now what: Rubicon continues to grow extremely rapidly, with revenue growth of around 40% expected for 2015. The company went public in early 2014, and it has nearly $100 million in cash available to fund its growth going forward. The market was clearly happy to see both strong growth in 2014 and assurances that this growth will continue going forward.