Marin Software Incorporated (NASDAQ: MRIN), a leading provider
of digital marketing software for performance-driven advertisers
and agencies, today announced financial results for the first
quarter ended March 31, 2023.
“Marketing faces increasing complexity and the only way to excel
is with automation,” said Chris Lien, Marin Software’s Chairman and
CEO. “The new Scripts tools complement our powerful no-code
solutions to give advertisers a competitive edge.”
First Quarter 2023 Product
Highlights:
- Introduced MarinOne Scripts, enabling users to leverage the
power of Python to create customized solutions for reporting,
management, and optimization to boost performance and save time.
With Scripts, advertisers can change an object’s status, set
campaign budgets, set bids, tag dimensions, and much more.
- Launched MarinConnect, a reporting-focused solution for
advertisers looking to collect their performance marketing data
from a variety of sources and send to data warehouses, BI Tools,
and spreadsheets.
- Added support for Google Analytics 4 in order to prepare for
the upcoming migration away from Universal Analytics.
- Introduced Priority Campaigns to Budget Optimizer, allowing
advertisers to allocate fixed budgets to specific campaigns, making
it easier to prioritize spend for specific initiatives like Branded
campaigns.
- Launched Find and Replace for Ads, giving advertisers another
tool to edit ads at scale across accounts. This functionality can
save time and effort when adjusting seasonal or promotional
messaging on large campaigns or ads with many different assets,
such as RSAs.
- Added the Copy tool to MarinOne, giving users the ability to
copy objects, including campaigns, groups, keywords, and
placements.
- Simplified audience targeting on Meta campaigns with
customizable Interest Clusters that allow advertisers to reuse
groups of Interests across Ad Sets and Campaigns.
- Added Impression Share and Impression Rank data for Amazon
Campaigns, allowing advertisers to optimize based on these share of
voice metrics.
- Added the ability to white label MarinOne, enabling customers
to upload their own logo for improved client or management
reporting.
- Enhanced URL builder to work across publishers and enhanced
customer parameters to simplify and reduce errors in URL
tagging.
- Expanded charting options to include stacked bar charts.
Stacked bar charts allow users to stack metrics to see how
allocations across objects have changed over time.
- Streamlined View Builder to show only the columns relevant to
the publishers that have been linked to a specific account.
First Quarter 2023 Financial
Updates:
- Net revenues totaled $4.6 million, a year-over-year decrease of
11% when compared to $5.2 million in the first quarter of
2022.
- GAAP loss from operations was ($6.0) million, resulting in a
GAAP operating margin of (130%), as compared to a GAAP loss from
operations of ($5.3) million and a GAAP operating margin of (103%)
for the first quarter of 2022.
- Non-GAAP loss from operations was ($5.0) million, resulting in
a non-GAAP operating margin of (109%), as compared to a non-GAAP
loss from operations of ($4.3) million and a non-GAAP operating
margin of (84%) for the first quarter of 2022.
- Cash and cash equivalents were $23.7 million in the aggregate
at March 31, 2023.
Reconciliations of GAAP to non-GAAP financial measures have been
provided in the financial statement tables included in this press
release. An explanation of these measures is also included below,
under the heading “Non-GAAP Financial Measures.”
Financial Outlook:
Marin is providing guidance for its second quarter of 2023 as
follows:
Forward-Looking
Guidance
In millions
Range of Estimate
From
To
Three Months Ending June 30,
2023
Revenues, net
$
4.0
$
4.3
Non-GAAP loss from operations
(5.6
)
(5.3
)
Non-GAAP loss from operations excludes the effects of
stock-based compensation, amortization of internally developed
software, impairment of long-lived assets, capitalization of
internally developed software, non-recurring costs associated with
restructurings, and certain professional fees that the Company has
incurred in responding to third-party subpoenas that the Company
has received related to governmental investigations of Google and
Facebook.
Additionally, the Company does not reconcile its forward-looking
non-GAAP loss from operations, due to variability between revenues
and non-cash items such as stock-based compensation. The GAAP loss
from operations includes stock-based compensation expense, which is
affected by hiring and retention needs, as well as the future price
of Marin’s stock. As a result, a reconciliation of the
forward-looking non-GAAP financial measures to the corresponding
GAAP measures cannot be made without unreasonable effort.
Quarterly Results Conference
Call
Marin Software will host a conference call today at 2:00 PM
Pacific Time (5:00 PM Eastern Time) to review the Company’s
financial results for the quarter ended March 31, 2023, and its
outlook for the future. To access the call, please dial (800)
954-0684 in the United States or (212) 231-2929 internationally
with reference to conference ID 22026664. A live webcast of the
conference call will be accessible at
https://viavid.webcasts.com/starthere.jsp?ei=1609434&tp_key=f0beb41e28.
Following the completion of the call through 11:59 p.m. Eastern
Time on May 11, 2023, a recorded replay will be available on the
Company’s website at http://investor.marinsoftware.com/ and a
telephone replay will be available by dialing (844) 512-2921 in the
United States or (412) 317-6671 internationally with the recording
access code 22026664.
About Marin Software
Marin Software Incorporated’s (NASDAQ: MRIN) mission is to give
advertisers the power to drive higher efficiency and transparency
in their paid marketing programs that run on the world’s largest
publishers. Marin Software provides enterprise marketing software
for advertisers and agencies to integrate, align, and amplify their
digital advertising spend across the web and mobile devices. Marin
Software offers a unified SaaS advertising management platform for
search, social, and eCommerce advertising. The Company helps
digital marketers convert precise audiences, improve financial
performance, and make better decisions. Headquartered in San
Francisco with offices worldwide, Marin Software’s technology
powers marketing campaigns around the globe. For more information
about Marin Software, please visit www.marinsoftware.com.
Non-GAAP Financial
Measures
Marin uses certain non-GAAP financial measures in this release.
Marin uses these non-GAAP financial measures internally in
analyzing its financial results and believes they are useful to
investors, as a supplement to GAAP measures, in evaluating its
ongoing operational performance. Marin believes that the use of
these non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
and in comparing our financial results with other companies in our
industry, many of which present similar non-GAAP financial measures
to investors. Non-GAAP financial measures that Marin uses may
differ from measures that other companies may use.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. A reconciliation of the non-GAAP
financial measures to their most directly comparable GAAP measures
has been provided in the financial statement tables included below
in this press release. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to their most
directly comparable GAAP financial measures.
Non-GAAP expenses, measures and net loss per share. Marin
defines non-GAAP sales and marketing, non-GAAP research and
development, non-GAAP general and administrative, non-GAAP gross
profit, non-GAAP operating loss and non-GAAP net loss as the
respective GAAP balances, adjusted for stock-based compensation,
amortization of internally developed software and intangible
assets, impairment of goodwill and long-lived assets, non-cash
expenses related to debt agreements, capitalization of internally
developed software, CARES Act employee retention credit,
non-recurring costs associated with restructurings, and certain
professional fees that the Company has incurred in responding to
third-party subpoenas that the Company has received related to
governmental investigations of Google and Facebook. Non-GAAP net
loss per share is calculated as non-GAAP net loss divided by the
weighted average shares outstanding.
Adjusted EBITDA. Marin defines Adjusted EBITDA as net loss,
adjusted for stock-based compensation expense, depreciation,
amortization of internally developed software and intangible
assets, capitalization of internally developed software, impairment
of goodwill and long-lived assets, benefit from or provision for
income taxes, CARES Act employee retention credit, other income,
net, non-recurring costs associated with restructurings, and
certain professional fees that the Company has incurred in
responding to third-party subpoenas that the Company has received
related to governmental investigations of Google and Facebook.
These amounts are often excluded by other companies to help
investors understand the operational performance of their business.
The Company uses Adjusted EBITDA as a measurement of its operating
performance because it assists in comparing the operating
performance on a consistent basis by removing the impact of certain
non-cash and non-operating items. Adjusted EBITDA reflects an
additional way of viewing aspects of the operations that Marin
believes, when viewed with the GAAP results and the accompanying
reconciliations to corresponding GAAP financial measures, provide a
more complete understanding of factors and trends affecting its
business.
Forward-Looking
Statements
This press release contains forward-looking statements
including, among other things, statements regarding Marin’s
business, impact of investments in product and technology on future
operating results, the increasing complexity in marketing, progress
on product development efforts, product capabilities, advertiser
and customer behavior, and future financial results, including its
outlook for the second quarter of 2023. These forward-looking
statements are subject to the safe harbor provisions created by the
Private Securities Litigation Reform Act of 1995. Actual results
could differ materially from those projected in the forward-looking
statements as a result of certain risk factors, including but not
limited to the amount of digital advertising spend managed by our
customers using our products; the extent of customer acceptance,
adoption and usage of our MarinOne platform; the productivity of
our personnel and other aspects of our business; our ability to
maintain or grow sales to new and existing customers; any adverse
changes in our relationships with and access to publishers and
advertising agencies and strategic business partners, including any
adverse changes in our revenue sharing agreement with Google; our
ability to raise additional capital; our ability to manage
expenses; the success of any investments that we may make in our
engineering and sales and marketing teams; any lingering effects of
the global outbreak of COVID-19 on demand for our products and
services; our ability to retain and attract qualified management,
technical and sales and marketing personnel; any delays in the
release of updates to our product platform or new features or
delays in customer deployment of any such updates or features;
competitive factors, including but not limited to pricing
pressures, entry of new competitors and new applications; quarterly
fluctuations in our operating results due to a number of factors;
inability to adequately forecast our future revenues, expenses,
Adjusted EBITDA, cash flows or other financial metrics; delays,
reductions or slower growth in the amount spent on online and
mobile advertising and the development of the market for
cloud-based software; progress in our efforts to update our
software platform; our ability to maintain or expand sales of our
solutions in channels other than search advertising; any slow-down
in the search advertising market generally; any shift in customer
digital advertising budgets from search to segments in which we are
not as deeply penetrated; the development of the market for digital
advertising; our ability to provide high-quality technical support
to our customers; material defects in our platform including those
resulting from any updates we introduce to our platform, service
interruptions at our single third-party data center or breaches in
our security measures; our ability to develop enhancements to our
platform; our ability to protect our intellectual property; our
ability to manage risks associated with international operations;
the impact of fluctuations in currency exchange rates, particularly
an increase in the value of the dollar; near term changes in sales
of our software services or spend under management may not be
immediately reflected in our results due to our subscription
business model; our ability to maintain the listing of our common
stock on the Nasdaq; and adverse changes in general economic or
market conditions. These forward-looking statements are based on
current expectations and are subject to uncertainties and changes
in condition, significance, value and effect as well as other risks
detailed in documents filed with the Securities and Exchange
Commission, including our most recent report on Form 10-K, recent
reports on Form 10-Q and current reports on Form 8-K, which we may
file from time to time, and all of which are available free of
charge at the SEC’s website at www.sec.gov. Any of these risks
could cause actual results to differ materially from expectations
set forth in the forward-looking statements. All forward-looking
statements in this press release reflect Marin’s expectations as of
May 4, 2023. Marin assumes no obligation to, and expressly
disclaims any obligation to update any such forward-looking
statements after the date of this release.
Marin Software Incorporated
Condensed Consolidated Balance
Sheets
(On a GAAP basis)
March 31,
December 31,
(Unaudited; in thousands, except par
value)
2023
2022
Assets:
Current assets:
Cash and cash equivalents
$
23,716
$
27,957
Accounts receivable, net
4,054
4,521
Prepaid expenses and other current
assets
1,653
2,016
Total current assets
29,423
34,494
Property and equipment, net
3,398
3,213
Right-of-use assets, operating leases
3,606
3,844
Other non-current assets
567
533
Total assets
$
36,994
$
42,084
Liabilities and Stockholders'
Equity:
Current liabilities:
Accounts payable
$
1,208
$
1,011
Accrued expenses and other current
liabilities
3,178
3,513
Operating lease liabilities
1,749
1,645
Total current liabilities
6,135
6,169
Operating lease liabilities,
non-current
1,857
2,199
Other long-term liabilities
1,017
1,002
Total liabilities
9,009
9,370
Stockholders’ equity:
Common stock, $0.001 par value
17
17
Additional paid-in capital
357,055
355,996
Accumulated deficit
(328,117
)
(322,334
)
Accumulated other comprehensive loss
(970
)
(965
)
Total stockholders’ equity
27,985
32,714
Total liabilities and stockholders’
equity
$
36,994
$
42,084
Marin Software Incorporated
Condensed Consolidated Statements of
Operations
(On a GAAP basis)
Three Months Ended March
31,
(Unaudited; in thousands, except per
share data)
2023
2022
Revenues, net
$
4,583
$
5,161
Cost of revenues
3,240
3,328
Gross profit
1,343
1,833
Operating expenses:
Sales and marketing
2,025
1,787
Research and development
2,942
2,917
General and administrative
2,336
2,469
Total operating expenses
7,303
7,173
Loss from operations
(5,960
)
(5,340
)
Other income, net
225
3,402
Loss before income taxes
(5,735
)
(1,938
)
Provision for income taxes
48
61
Net loss
$
(5,783
)
$
(1,999
)
Net loss per common share, basic and
diluted
$
(0.34
)
$
(0.13
)
Weighted-average shares outstanding, basic
and diluted
17,235
15,537
Marin Software Incorporated
Condensed Consolidated Statements of
Cash Flows
(On a GAAP basis)
Three Months Ended March
31,
(Unaudited; in thousands)
2023
2022
Operating activities:
Net loss
$
(5,783
)
$
(1,999
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation
11
179
Amortization of internally developed
software
419
542
Amortization of deferred costs to obtain
and fulfill contracts
94
83
Forgiveness of Paycheck Protection Program
loan
—
(3,117
)
Interest expense
—
3
Loss on disposals of property and
equipment and right-of-use assets
—
1
Unrealized foreign currency losses
4
26
Stock-based compensation related to equity
awards
1,032
857
Provision for bad debts
(279
)
20
Net change in operating leases
—
(134
)
Deferred income tax benefits
—
(83
)
Changes in operating assets and
liabilities
Accounts receivable
734
291
Prepaid expenses and other assets
232
616
Accounts payable
194
(238
)
Accrued expenses and other liabilities
(350
)
(1,629
)
Net cash used in operating activities
(3,692
)
(4,582
)
Investing activities:
Purchases of property and equipment
—
(12
)
Capitalization of internally developed
software
(579
)
(486
)
Net cash used in investing activities
(579
)
(498
)
Financing activities:
Repayment of Paycheck Protection Program
loan
—
(203
)
Employee taxes paid for withheld shares
upon equity award settlement
(10
)
(12
)
Proceeds from employee stock purchase
plan, net
18
21
Net cash provided by (used in) financing
activities
8
(194
)
Effect of foreign exchange rate changes on
cash and cash equivalents and restricted cash
22
(27
)
Net decrease in cash and cash equivalents
and restricted cash
(4,241
)
(5,301
)
Cash and cash equivalents and
restricted cash:
Beginning of period
27,957
47,057
End of the period
$
23,716
$
41,756
Marin Software Incorporated
Reconciliation of GAAP to Non-GAAP
Expenses
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
(Unaudited; in thousands)
2022
2022
2022
2022
2022
2023
Sales and Marketing (GAAP)
$
1,787
$
1,588
$
1,660
$
1,962
$
6,997
$
2,025
Less Stock-based compensation
(175
)
(157
)
(99
)
(165
)
(596
)
(165
)
Less Restructuring related expenses
—
—
—
—
—
—
Sales and Marketing (Non-GAAP)
$
1,612
$
1,431
$
1,561
$
1,797
$
6,401
$
1,860
Research and Development (GAAP)
$
2,917
$
2,980
$
3,034
$
2,901
$
11,832
$
2,942
Less Stock-based compensation
(224
)
(213
)
(303
)
(256
)
(996
)
(270
)
Less Restructuring related expenses
(36
)
(59
)
(76
)
—
(171
)
—
Plus Capitalization of internally
developed software
512
408
449
397
1,766
579
Research and Development (Non-GAAP)
$
3,169
$
3,116
$
3,104
$
3,042
$
12,431
$
3,251
General and Administrative (GAAP)
$
2,469
$
2,545
$
2,923
$
2,459
$
10,396
$
2,336
Less Stock-based compensation
(334
)
(340
)
(405
)
(403
)
(1,482
)
(473
)
Less Restructuring related expenses
—
—
(78
)
—
(78
)
—
Less Third-party subpoena-related
expenses
(72
)
(99
)
(198
)
(72
)
(441
)
(84
)
General and Administrative (Non-GAAP)
$
2,063
$
2,106
$
2,242
$
1,984
$
8,395
$
1,779
Marin Software Incorporated
Reconciliation of GAAP to Non-GAAP
Measures
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
(Unaudited; in thousands)
2022
2022
2022
2022
2022
2023
Gross Profit (GAAP)
$
1,833
$
1,517
$
1,796
$
2,078
$
7,224
$
1,343
Plus Stock-based compensation
124
90
148
119
481
124
Plus Amortization of internally developed
software
542
431
419
418
1,810
419
Plus Restructuring related expenses
17
—
—
—
17
—
Gross Profit (Non-GAAP)
$
2,516
$
2,038
$
2,363
$
2,615
$
9,532
$
1,886
Operating Loss (GAAP)
$
(5,340
)
$
(5,596
)
$
(5,821
)
$
(5,244
)
$
(22,001
)
$
(5,960
)
Plus Stock-based compensation
857
800
955
943
3,555
1,032
Plus Amortization of internally developed
software
542
431
419
418
1,810
419
Plus Restructuring related expenses
53
59
154
—
266
—
Less Capitalization of internally
developed software
(512
)
(408
)
(449
)
(397
)
(1,766
)
(579
)
Plus Third-party subpoena-related
expenses
72
99
198
72
441
84
Operating Loss (Non-GAAP)
$
(4,328
)
$
(4,615
)
$
(4,544
)
$
(4,208
)
$
(17,695
)
$
(5,004
)
Net Loss (GAAP)
$
(1,999
)
$
(5,374
)
$
(5,736
)
$
(5,118
)
$
(18,227
)
$
(5,783
)
Plus Stock-based compensation
857
800
955
943
3,555
1,032
Plus Amortization of internally developed
software
542
431
419
418
1,810
419
Plus Restructuring related expenses
53
59
154
—
266
—
Less Capitalization of internally
developed software
(512
)
(408
)
(449
)
(397
)
(1,766
)
(579
)
Plus Third-party subpoena-related
expenses
72
99
198
72
441
84
Less Forgiveness and repayment of Paycheck
Protection Program loan
(3,320
)
—
—
—
(3,320
)
—
Net Loss (Non-GAAP)
$
(4,307
)
$
(4,393
)
$
(4,459
)
$
(4,082
)
$
(17,241
)
$
(4,827
)
Marin Software Incorporated
Calculation of Non-GAAP Earnings Per
Share
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
(Unaudited; in thousands, except per
share data)
2022
2022
2022
2022
2022
2023
Net Loss (Non-GAAP)
$
(4,307
)
$
(4,393
)
$
(4,459
)
$
(4,082
)
$
(17,241
)
$
(4,827
)
Weighted-average shares outstanding, basic
and diluted
15,537
15,651
16,030
16,337
15,891
17,235
Non-GAAP net loss per common share, basic
and diluted
$
(0.28
)
$
(0.28
)
$
(0.28
)
$
(0.25
)
$
(1.08
)
$
(0.28
)
Marin Software Incorporated
Reconciliation of Net Loss to Adjusted
EBITDA
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
(Unaudited; in thousands)
2022
2022
2022
2022
2022
2023
Net Loss
$
(1,999
)
$
(5,374
)
$
(5,736
)
$
(5,118
)
$
(18,227
)
$
(5,783
)
Depreciation
179
199
57
12
447
11
Amortization of internally developed
software
542
431
419
418
1,810
419
Provision for (benefit from) income
taxes
61
75
105
64
305
48
Stock-based compensation
857
800
955
943
3,555
1,032
Capitalization of internally developed
software
(512
)
(408
)
(449
)
(397
)
(1,766
)
(579
)
Restructuring related expenses
53
59
154
—
266
—
Other income, net
(3,402
)
(297
)
(190
)
(190
)
(4,079
)
(225
)
Third-party subpoena-related expenses
72
99
198
72
441
84
Adjusted EBITDA
$
(4,149
)
$
(4,416
)
$
(4,487
)
$
(4,196
)
$
(17,248
)
$
(4,993
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005192/en/
Investor Relations, Marin Software
ir@marinsoftware.com
Media Contact Wesley MacLaggan Marketing, Marin Software
(415) 399-2580 press@marinsoftware.com
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