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Rocket Fuel: Financial Results For Third

The following excerpt is from the company's SEC filing.

Quarter 2015,

Appoints New CEO and Announces Management Changes

Revenue Grew 10% and Non-GAAP Net Revenue Grew 15% Year over Year

Company Reports Positive Adjusted EBITDA in the Third Quarter

REDWOOD CITY, Calif.,

Nov. 4, 2015 - Rocket Fuel Inc. (NASDAQ: FUEL), a leading programmatic marketing platform provider that uses artificial intelligence (AI) at Big Data scale to optimize marketing ROI for global agencies and enterprise marketers, today reported results for the third quarter ended September 30, 2015. Rocket Fuel posted 10% growth in revenue and 15% growth in non-GAAP ne t revenue over the third quarter of last year, and positive adjusted EBITDA of $3.4 million.

Rocket Fuel appointed Randy Wootton as the Company's Chief Executive Officer and board member. Mr. Wootton's appointment is further detailed in the press release issued earlier today. Monte Zweben, who served as Interim CEO, remains on Rocket Fuel's Board of Directors and will serve as Executive Chairman of the Board. Dr. George John will resign from the Company and step down from Rocket Fuel's Board of Directors.

The Company also announced the resignation of Chief Financial Officer, David Sankaran, effective November 30, 2015. The Company appointed Cal Hoagland, a partner of FLG Partners, LLC, a leading Silicon Valley chief financial officer services and board advisory firm, as Interim Chief Financial Officer of Rocket Fuel, effective November 30, 2015. Mr. Hoagland has served as CFO and Interim CFO for public and private enterprise software, SaaS and technology companies, and will serve as Interim Chief Financial Officer until such time as the Company completes its search for a permanent Chief Financial Officer.

Financial Highlights for the Third Quarter of 2015

$111.8 million

increased

compared to

$102.1 million

for the third quarter of 2014. Revenue derived from the delivery of digital advertising to mobile, social, and video channels was

$40.2 million

in the third quarter, a decrease of

$44.9 million

for the third quarter of 2014. Revenue derived from delivery of advertising to the mobile channel was $32 million, an increase of 3% from $31 million in the third quarter of 2014.

Non-GAAP net revenue

$68.2 million

$59.1 million

non-GAAP Net Revenue in the third quarter of 2014. Non-GAAP Net Revenue is calculated by taking revenue and subtracting media costs.

Net loss

$(136.6) million

$(3.19)

per diluted share compared to a net loss of

$(22.8) million

$(0.61)

per diluted share in the third quarter of 2014.

Non-GAAP adjusted net loss

for the quarter was

$(7.0) million

$(0.16)

per diluted share compared to an adjusted net loss of

$(6.6) million

$(0.18)

per diluted share, for the third quarter of 2014.

Non-GAAP adjusted EBITDA

$(3.0) million

in the third quarter of 2014, and improved $2.0 million sequentially from $1.4 million in the second quarter of 2015.

Cash and cash equivalents

were

$83.1 million

as of

, an increase of $2 million sequentially from June 30, 2015.

Active Customer

count was

during the quarter, up from

Employee headcount

Goodwill Impairment Charge

The company recorded an estimated goodwill impairment charge of $117.5 million during the third quarter. As required under GAAP, the Company conducted a goodwill impairment test when the market value of its shares fell below the carrying value of its net assets. The preliminary results of that test indicate a full impairment of goodwill, resulting in the estimated non-cash charge. The Company will provide additional disclosure on this topic in its forthcoming Form 10-Q.

Financial Outlook for the Fourth Quarter 2015

For the fourth quarter of 2015, the Company expects:

- Non-GAAP net revenue to be in the range of

$68 million

$72 million

- Non-GAAP Adjusted EBITDA in the range of

$3 million

$7 million

Conference Call and Webcast Information

The Rocket Fuel third quarter 2015 teleconference and webcast is scheduled to begin at 2:00 PM Pacific time on Wednesday, November 4, 2015. To participate on the live call, analysts and investors should dial 1-888-542-0999, or outside the U.S. 719-457-1517, at least ten minutes prior to the call. Rocket Fuel will also offer a live and archived webcast of the conference call, accessible from the “Investors” section of its website at http://investor.rocketfuel.com.

Use of Non-GAAP Measures

This press release includes information relating to non-GAAP net revenue, non-GAAP adjusted EBITDA and non-GAAP adjusted net income (loss), which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures have been included in this press release because they are measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operational plans.

We define non-GAAP net revenue as GAAP revenue less media costs. Media costs consist of costs for advertising impressions we purchase from real-time advertising exchanges or other third parties. A limitation of non-GAAP net revenue is that it is a measure designed for internal purposes that may be unique to Rocket Fuel and may not enhance the comparability of Rocket Fuel’s results to other companies in the same industry that have similar business arrangements but present the impact of media costs differently. Our management compensates for this limitation by also considering the...


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