Marin Software Incorporated (NASDAQ: MRIN) (“Marin”, "Marin
Software" or the “Company”), a leading provider of digital
marketing software for performance-driven advertisers and agencies,
today announced financial results for the third quarter ended
September 30, 2023.
“We’re excited to continue our innovations to address the most
pressing issues marketers face today – complete and timely insights
and the ability to make the smartest decisions and to act on them
quickly,” said Chris Lien, Marin Software’s Chairman and CEO. “Our
new offerings, Connect and Ascend, are built to provide marketers
with a robust platform to unite data from the entire customer
journey with an AI-powered optimization engine to maximize
performance across media channels.”
Third Quarter 2023 Product
Highlights:
- Launched two new editions of Marin to address the needs of
different segments of the market:
- Connect: Helps marketers to collect, aggregate, and share
campaign, conversion, and first-party data. Connect can push data
to data warehouses, Excel/Google Sheets, and BI Tools. In addition
to streamlining and automating the “marketing data pipeline,”
Connect provides tools to analyze campaign performance.
- Ascend: Building on the data foundation provided by Connect,
Ascend leverages the power of predictive AI to improve the
performance of your marketing investment. Ascend determines where
the next marginal dollar will have the most impact and continually
adjusts budget allocation and targets to maximize performance.
- MarinOne: Our flagship product includes everything in Ascend,
plus a robust set of automation tools and world-class strategic
support from digital marketing experts.
- Deepened our CRM integrations by adding HubSpot, enabling our
customers to optimize against the entire customer journey,
including downstream and offline conversions.
- Introduced the Automation Summary Dashboard, which enables
Marin users to see the impact of automations taken on their behalf
in MarinOne. It allows marketers to clearly quantify the ROI on the
Marin platform by presenting a historical record of system
recommendations for bids and budgets.
- Enhanced support for LinkedIn, TikTok, Apple Search Ads, and
Taboola to include Marin’s proprietary forecasts in budget models
and simulations.
- Improved Search Ad Preview to provide MarinOne and external
users with transparent visual previews, including ad copy, logos,
and extensions.
- Strengthened Google Performance Max support by adding asset
group reporting and automated status changes based on pre-set
criteria. Marketers can better manage volume across a portfolio of
Google accounts and other publishers with consolidated automation
in MarinOne.
- Enabled import of Google Labels into Marin to allow new
customers to quickly adopt Marin Dimensions, adding a hierarchy to
Google Labels.
- Upgraded Client Tags so users can report on aggregate
performance data across Marin accounts. Customers use this ‘roll
up’ functionality to group Marin client accounts by categories like
region, brand, or industry and can view near real-time performance
data.
- We now offer Automatic Preview for all campaigns linked to
MarinOne and offer marketers the ability to derive more granular
recommendations and forecasts by mapping campaigns to a dedicated
strategy.
Third Quarter 2023 Financial
Updates:
- Net revenues totaled $4.4 million, a year-over-year decrease of
11% when compared to $5.0 million for the third quarter of
2022.
- GAAP loss from operations was ($5.1) million, resulting in a
GAAP operating margin of (115%), as compared to a GAAP loss from
operations of ($5.8) million and a GAAP operating margin of (117%)
for the third quarter of 2022.
- Non-GAAP loss from operations was ($2.9) million, resulting in
a non-GAAP operating margin of (65%), as compared to a non-GAAP
loss from operations of ($4.5) million and a non-GAAP operating
margin of (91%) for the third quarter of 2022.
- Cash and cash equivalents were $13.6 million as of September
30, 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 fourth quarter of 2023 as
follows:
Forward-Looking
Guidance
(In millions)
Range of Estimate
From
To
Three Months Ending December 31,
2023
Revenues, net
$
4.1
$
4.4
Non-GAAP loss from operations
(2.3
)
(2.0
)
Non-GAAP loss from operations excludes the effects of
stock-based compensation expense, 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 September 30, 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 13742110. A live webcast of the
conference call will be accessible at
https://viavid.webcasts.com/starthere.jsp?ei=1622870&tp_key=b8014ed5de.
Following the completion of the call through 11:59 p.m. Eastern
Time on November 9, 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 13742110.
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
expense, amortization of internally developed software and
intangible 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. 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, benefit
from or provision for income taxes, 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 fourth 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 our ability to successfully implement a restructuring
plan that we commenced in July 2023 and the expected costs and
savings from the restructuring plan; 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; 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; any lingering effects of the global
outbreak of COVID-19 on demand for our products and services;
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
November 2, 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)
September 30,
December 31,
(Unaudited; in thousands, except par
value)
2023
2022
Assets:
Current assets:
Cash and cash equivalents
$
13,597
$
27,957
Accounts receivable, net
4,026
4,521
Prepaid expenses and other current
assets
1,437
2,016
Total current assets
19,060
34,494
Property and equipment, net
3,514
3,213
Right-of-use assets, operating leases
2,278
3,844
Other non-current assets
486
533
Total assets
$
25,338
$
42,084
Liabilities and Stockholders'
Equity:
Current liabilities:
Accounts payable
$
1,035
$
1,011
Accrued expenses and other current
liabilities
2,518
3,513
Operating lease liabilities
1,496
1,645
Total current liabilities
5,049
6,169
Operating lease liabilities,
non-current
782
2,199
Other long-term liabilities
989
1,002
Total liabilities
6,820
9,370
Stockholders’ equity:
Common stock, $0.001 par value
18
17
Additional paid-in capital
358,452
355,996
Accumulated deficit
(338,988
)
(322,334
)
Accumulated other comprehensive loss
(964
)
(965
)
Total stockholders’ equity
18,518
32,714
Total liabilities and stockholders’
equity
$
25,338
$
42,084
Marin Software Incorporated
Condensed Consolidated Statements of
Operations
(On a GAAP basis)
Three Months Ended September
30,
Nine Months Ended September
30,
(Unaudited; in thousands, except per
share data)
2023
2022
2023
2022
Revenues, net
$
4,438
$
4,977
$
13,381
$
14,858
Cost of revenues
3,087
3,181
9,501
9,712
Gross profit
1,351
1,796
3,880
5,146
Operating expenses:
Sales and marketing
1,482
1,660
5,442
5,035
Research and development
2,860
3,034
8,599
8,931
General and administrative
2,119
2,923
6,897
7,937
Total operating expenses
6,461
7,617
20,938
21,903
Loss from operations
(5,110
)
(5,821
)
(17,058
)
(16,757
)
Other income, net
158
190
598
3,889
Loss before income taxes
(4,952
)
(5,631
)
(16,460
)
(12,868
)
Provision for income taxes
2
105
194
241
Net loss
$
(4,954
)
$
(5,736
)
$
(16,654
)
$
(13,109
)
Net loss per common share, basic and
diluted
$
(0.28
)
$
(0.36
)
$
(0.95
)
$
(0.83
)
Weighted-average shares outstanding, basic
and diluted
17,912
16,030
17,522
15,741
Marin Software Incorporated
Condensed Consolidated Statements of
Cash Flows
(On a GAAP basis)
Nine Months Ended September
30,
(Unaudited; in thousands)
2023
2022
Operating activities:
Net loss
$
(16,654
)
$
(13,109
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation
17
435
Amortization of internally developed
software
1,278
1,392
Amortization of deferred costs to obtain
and fulfill contracts
277
260
Forgiveness of Paycheck Protection Program
loan
—
(3,117
)
Interest expense
—
—
Loss on disposals of property and
equipment and right-of-use assets
2
29
Unrealized foreign currency losses
43
111
Stock-based compensation related to equity
awards
2,594
2,612
Provision for bad debts
(388
)
(50
)
Net change in operating leases
—
(346
)
Deferred income tax benefits
—
(72
)
Changes in operating assets and
liabilities
Accounts receivable
872
486
Prepaid expenses and other assets
345
55
Accounts payable
21
(257
)
Accrued expenses and other liabilities
(1,041
)
(1,717
)
Net cash used in operating activities
(12,634
)
(13,288
)
Investing activities:
Purchases of property and equipment
—
(17
)
Capitalization of internally developed
software
(1,511
)
(1,343
)
Net cash used in investing activities
(1,511
)
(1,360
)
Financing activities:
Repayment of Paycheck Protection Program
loan
—
(203
)
Employee taxes paid for withheld shares
upon equity award settlement
(199
)
(394
)
Proceeds from employee stock purchase
plan, net
(3
)
37
Net cash provided by (used in) financing
activities
(202
)
(560
)
Effect of foreign exchange rate changes on
cash and cash equivalents and restricted cash
(13
)
(158
)
Net decrease in cash and cash equivalents
and restricted cash
(14,360
)
(15,366
)
Cash and cash equivalents and
restricted cash:
Beginning of period
27,957
47,057
End of the period
$
13,597
$
31,691
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,
Jun 30,
Sep 30
(Unaudited; in thousands)
2022
2022
2022
2022
2022
2023
2023
2023
Sales and Marketing (GAAP)
$
1,787
$
1,588
$
1,660
$
1,962
$
6,997
$
2,025
$
1,935
$
1,482
Less Stock-based compensation
(175
)
(157
)
(99
)
(165
)
(596
)
(165
)
(184
)
(88
)
Less Restructuring related expenses
—
—
—
—
—
—
—
(122
)
Sales and Marketing (Non-GAAP)
$
1,612
$
1,431
$
1,561
$
1,797
$
6,401
$
1,860
$
1,751
$
1,272
Research and Development (GAAP)
$
2,917
$
2,980
$
3,034
$
2,901
$
11,832
$
2,942
$
2,797
$
2,860
Less Stock-based compensation
(224
)
(213
)
(303
)
(256
)
(996
)
(270
)
(305
)
(131
)
Less Restructuring related expenses
(36
)
(59
)
(76
)
—
(171
)
—
—
(815
)
Plus Capitalization of internally
developed software
512
408
449
397
1,766
579
578
354
Research and Development (Non-GAAP)
$
3,169
$
3,116
$
3,104
$
3,042
$
12,431
$
3,251
$
3,070
$
2,268
General and Administrative (GAAP)
$
2,469
$
2,545
$
2,923
$
2,459
$
10,396
$
2,336
$
2,442
$
2,119
Less Stock-based compensation
(334
)
(340
)
(405
)
(403
)
(1,482
)
(473
)
(627
)
(85
)
Less Restructuring related expenses
—
—
(78
)
—
(78
)
—
—
(189
)
Less Third-party subpoena-related
expenses
(72
)
(99
)
(198
)
(72
)
(441
)
(84
)
(45
)
(36
)
General and Administrative (Non-GAAP)
$
2,063
$
2,106
$
2,242
$
1,984
$
8,395
$
1,779
$
1,770
$
1,809
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,
Jun 30,
Sep 30,
(Unaudited; in thousands)
2022
2022
2022
2022
2022
2023
2023
2023
Gross Profit (GAAP)
$
1,833
$
1,517
$
1,796
$
2,078
$
7,224
$
1,343
$
1,186
$
1,351
Plus Stock-based compensation
124
90
148
119
481
124
137
5
Plus Amortization of internally developed
software
542
431
419
418
1,810
419
426
433
Plus Restructuring related expenses
17
—
—
—
17
—
—
671
Gross Profit (Non-GAAP)
$
2,516
$
2,038
$
2,363
$
2,615
$
9,532
$
1,886
$
1,749
$
2,460
Operating Loss (GAAP)
$
(5,340
)
$
(5,596
)
$
(5,821
)
$
(5,244
)
$
(22,001
)
$
(5,960
)
$
(5,988
)
$
(5,110
)
Plus Stock-based compensation
857
800
955
943
3,555
1,032
1,253
309
Plus Amortization of internally developed
software
542
431
419
418
1,810
419
426
433
Plus Restructuring related expenses
53
59
154
—
266
—
—
1,797
Less Capitalization of internally
developed software
(512
)
(408
)
(449
)
(397
)
(1,766
)
(579
)
(578
)
(354
)
Plus Third-party subpoena-related
expenses
72
99
198
72
441
84
45
36
Operating Loss (Non-GAAP)
$
(4,328
)
$
(4,615
)
$
(4,544
)
$
(4,208
)
$
(17,695
)
$
(5,004
)
$
(4,842
)
$
(2,889
)
Net Loss (GAAP)
$
(1,999
)
$
(5,374
)
$
(5,736
)
$
(5,118
)
$
(18,227
)
$
(5,783
)
$
(5,917
)
$
(4,954
)
Plus Stock-based compensation
857
800
955
943
3,555
1,032
1,253
309
Plus Amortization of internally developed
software
542
431
419
418
1,810
419
426
433
Plus Restructuring related expenses
53
59
154
—
266
—
—
1,797
Less Capitalization of internally
developed software
(512
)
(408
)
(449
)
(397
)
(1,766
)
(579
)
(578
)
(354
)
Plus Third-party subpoena-related
expenses
72
99
198
72
441
84
45
36
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
)
$
(4,771
)
$
(2,733
)
Marin Software Incorporated
Calculation of Non-GAAP Earnings Per
Share
Three Months Ended
Year Ended
Three Months Ended
(Unaudited; in thousands, except per
share data)
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
2022
2022
2022
2022
2022
2023
2023
2023
Net Loss (Non-GAAP)
$
(4,307
)
$
(4,393
)
$
(4,459
)
$
(4,082
)
$
(17,241
)
$
(4,827
)
$
(4,771
)
$
(2,733
)
Weighted-average shares outstanding, basic
and diluted
15,537
15,651
16,030
16,337
15,891
17,235
17,412
17,912
Non-GAAP net loss per common share, basic
and diluted
$
(0.28
)
$
(0.28
)
$
(0.28
)
$
(0.25
)
$
(1.08
)
$
(0.28
)
$
(0.27
)
$
(0.15
)
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,
Jun 30,
Sep 30,
(Unaudited; in thousands)
2022
2022
2022
2022
2022
2023
2023
2023
Net Loss
$
(1,999
)
$
(5,374
)
$
(5,736
)
$
(5,118
)
$
(18,227
)
$
(5,783
)
$
(5,917
)
$
(4,954
)
Depreciation
179
199
57
12
447
11
3
3
Amortization of internally developed
software
542
431
419
418
1,810
419
426
433
Provision for (benefit from) income
taxes
61
75
105
64
305
48
144
2
Stock-based compensation
857
800
955
943
3,555
1,032
1,253
309
Capitalization of internally developed
software
(512
)
(408
)
(449
)
(397
)
(1,766
)
(579
)
(578
)
(354
)
Restructuring related expenses
53
59
154
—
266
—
—
1,797
Other income, net
(3,402
)
(297
)
(190
)
(190
)
(4,079
)
(225
)
(215
)
(158
)
Third-party subpoena-related expenses
72
99
198
72
441
84
45
36
Adjusted EBITDA
$
(4,149
)
$
(4,416
)
$
(4,487
)
$
(4,196
)
$
(17,248
)
$
(4,993
)
$
(4,839
)
$
(2,886
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102681994/en/
Investor Relations, Marin Software
ir@marinsoftware.com
Media Contact Wesley MacLaggan Marketing, Marin Software
(415) 399-2580 press@marinsoftware.com
Marin Software (NASDAQ:MRIN)
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