TubeMogul (NASDAQ:TUBE) is still winning business at a brisk pace, fueled by big spending on its video advertising platform. Investors also seemed to appreciate new deals and the variety of ways existing clients are using the TubeMogul platform. Here's a closer look at the company's overall performance in the third quarter:
|Metric||Q3 2015 Actuals||Q3 2014 Actuals||YoY Growth|
|Revenue||$46.49 million||$27.42 million||69.5%|
|Net Loss||($3.75 million)||($1.72 million)||(118%)|
|Cash From Operations (Trailing Nine Months)||($19.39 million)||($13.93 million)||(39.2%)|
Commenting on the results, CEO Brett Wilson said in a press release:
We had a tremendous quarter, and for the fifth consecutive time since becoming a public company, exceeded our guidance across all metrics, and we are raising our full-year guidance once again. Our focus on cross-screen advertising continued to resonate with brand advertisers in the third quarter. Our mix of spend from non-desktop sources increased over the second quarter and we expect demand for cross-screen campaigns to continue into Q4 and 2016.
What went right: Total spend, which measures the amount of ad spending conducted through TubeMogul's platform by clients and ad agencies, rose 65% to $103.4 million. Of that, 27% went to mobile and programmatic TV ads while "Platform Direct" spend jumped 58%, reflecting more and deeper relationships with advertising clients who pay to access TubeMogul's services directly rather than through an agency. Key wins in the quarter included L'Oreal USA and Dannon.
What went wrong: For as much progress as the company is making, TubeMogul is a long way from earning profits from its platform. Net loss doubled on an absolute basis and nearly doubled on a per-share basis. Management also spent roughly 40% more cash funding operations than in last year's third quarter. Raising fresh capital from investors via a new stock or debt offering seems certain at this point.
What's next: Looking ahead, TubeMogul projects $126 million to $128 million in total spend on its platform in the fourth quarter, resulting in $51 million to $53 million in net revenue and $34 million to $36 million in gross profit. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to range between breakeven and a $2 million loss, after adjusting for currency effects, amortization of internal use software, certain valuation changes, and stock-based compensation expense.
For the full year, management forecasts $406 million to $408 million in total spend, resulting in $173 million to $175 million in revenue and $117 million to $119 million in gross profit. Adjusted EBITDA is expected to range between a $1 million to $3 million loss over the same period.
Longer term, investors need to keep watch on the customer list and the variety of ad buys orchestrated by TubeMogul. Higher percentages of mobile and TV ads would speak well for the company's ability to go beyond its roots in desktop video and attract a diverse and lucrative base of advertisers.
Tim Beyers is a sucker for good TV, even when it's on the web. He's also a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission but didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool.
The Motley Fool owns shares of and recommends TubeMogul. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.