What: Shares of advertising automation specialist the Rubicon Project (NYSE:RUBI) surged as much as 20% today after its quarterly results and outlook impressed Wall Street. Shares were up 17% as of 2:30 p.m.
So what: Rubicon shares have soared over the past year on a string of market-thumping quarters, and today's Q2 results -- adjusted EBITDA jumped 151% on a revenue surge of 88% -- coupled with upbeat full-year guidance suggests that the momentum isn't slowing anytime soon. In fact, the quarter marks the fifth straight in which management has posted high revenue growth and profitable adjusted EBITDA, reinforcing confidence on Wall Street that Rubicon's path to bottom line profitability will be a smooth one.
Now what: Management now sees full-year earnings of $0.45 to $0.48 per share on revenue of $246 million to $250 million. "[W]e significantly increased the scale of our orders and mobile offerings during the quarter," said founder and CEO Frank Addante. "It is clear that our focus on developing leading technology innovations, delivering value for our customers, and managing the business for sustained long-term growth paid off in the second quarter." Given Rubicon's still-speculative nature and forward P/E in the 40's, however, I'd hold out for a much wider margin of safety before buying into that bullishness.