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Platform Direct Growth Drives TubeMogul Inc. Sales 39% Higher

Image source: TubeMogul.

TubeMogul (NASDAQ: TUBE) reported first-quarter results on May 9. The digital advertising company's cutting-edge technology is helping to place it at the vanguard of the massive global shift toward online video-based ads.

TubeMogul results: The raw numbers

Metric 

Q1 2016

Q1 2015

Growth (YOY)

Revenue

$42.080 million

$30.316 million

39%

Net loss

($8.256 million)

($7.144 million)

N/A

Earnings per share

($0.23)

($0.24)

N/A

Data source: TubeMogul Q1 2016 earnings press release.

What happened with TubeMogul this quarter?

Total Spend -- essentially the amount that customers spend through TubeMogul's platform, including the cost of media purchases and TubeMogul's fees -- rose 58% year over year to $112.8 million.

Spend on TubeMogul's Platform Direct offering, which provides software that advertisers can use to run their own digital ad campaigns, jumped 65% to $91.4 million, representing 81% of total spend. And spend on the company's Platform Services offering, which allows advertisers to specify objectives and have TubeMogul's team execute the campaign on their behalf, rose 34% to $21.4 million.

Together, these increases in spend helped to fuel a 39% year-over-year rise in revenue to $42.1 million. In turn, gross profit rose 38% to $30.4 million, with gross margin declining slightly to 72.3% from 72.6% in Q1 2015.

Operating loss, however, increased to $8.6 million, compared to an operating loss of $5.7 million in the first quarter of 2015. Net loss also widened, increasing to $8.3 million from $7.1 million in the year ago period.

Leadership changes

Along with its Q1 results, TubeMogul announced the hiring of former BrightRoll executive Ron Will as chief financial officer. Hill will take over the role from current TubeMogul CFO Paul Joachim on May 11, and Joachim will be staying on with the company as chief administrative officer.

"Paul has done an amazing job leading us through a successful IPO process and consistently exceeding guidance for eight straight quarters," said CEO Brett Wilson in a press release. "I'm looking forward to working closely with him in his new role, and we are all tremendously excited for Ron to bring his robust strategic and operational finance skills to our team and be a key contributor as we continue to scale our business."

Looking forward

Tube Mogul expects second-quarter total spend of $144 million to $146 million and revenue of $57 million to $59 million. The company also anticipates second-quarter gross profit of between $39 million and $41 million and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the range of $1 million to $3 million.

Additionally, management raised its full-year 2016 outlook, which includes:

  • Total spend in the range of $576 million to $582 million, up from a prior forecast of $569 million to $577 million.
  • Revenue between $226 million and $232 million, up from $220 million and $228 million.
  • Gross profit of $157 million to $163 million, vs. $152 million to $160 million.
  • Adjusted EBITDA of $7 million, up from $5 million.

"We had a fantastic start to the year and were particularly pleased with the strength in our Platform Direct business in the quarter," added Wilson. "The momentum we are seeing is a testament to our focus on servicing an increasing portion of our clients' overall video buys. With the addition of social inventory through Facebook and Instagram video, we have created a truly holistic brand advertising platform that is enhanced by our cross-screen planning software."

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