TechDogs-"Marin Software Announces Fourth Quarter And Full Year 2023 Financial Results"

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Marin Software Announces Fourth Quarter And Full Year 2023 Financial Results

By Business Wire

Business Wire
Overall Rating

SAN FRANCISCO--(BUSINESS WIRE)--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 fourth quarter and full year ended December 31, 2023.

“Companies that are not leveraging AI to plan and manage their performance media are falling behind,” said Chris Lien, Marin Software’s CEO. “We’ve published our amazing results with Alumni Ventures and an agency partner showing how our optimization engine continues to help agencies and brands accelerate sales, stay on budget, and get ahead of their competition.”

Fourth Quarter 2023 Product Highlights:

  • Increased our coverage of the Chinese search market by adding support for Qihoo Search 360, to now provide coverage for more than 90% of searches conducted in this important market.
  • Launched our Google Sheets plugin, enabling Marin users to link Google Sheets to their Marin instance to leverage it as a data source and destination.
  • Released an automated anomaly detector to notify users of any abnormal campaign performance.
  • Enhanced our Forecasting to include a visualization of Return on Ad Spend vs. Revenue, helping advertisers determine the right targets by showing how changing their ROAS will affect their volumes.
  • Added “Review and Send” for budget recommendations to provide enhanced transparency and control over campaign optimization actions.
  • Saved time and increased revenue for an agency customer by 20% with intelligent budget pacing with Dynamic Allocation.
  • Doubled lead volume for Alumni Ventures and reduced CPL by 33% with Marin budgeting optimization.
  • Expanded Performance Max campaign functionality by enabling Marin users to create and edit for Listing Groups at scale.
  • Enhanced in-app e-commerce data to include Amazon Shopping Product-level Cost and Revenue across both paid and organic sales for greater transparency and more comprehensive revenue reporting.
  • Enabled support for Amazon Store Spotlight and Sponsored Brand Video, critical ad types to drive brand awareness, to deliver more comprehensive campaign management of campaigns on the increasingly important e-commerce platform.
  • Integrated BigQuery data into Marin’s ecosystem to expand coverage of business insights platforms.
  • Simplified deployment of custom scripts with real-time feedback to accelerate the development of bespoke automation by less technical users.
  • Updated and streamlined UI to provide a more intuitive, modern user experience.
  • Increased revenue for Yotel by 323% using Marin’s Google to Microsoft Sync.
  • Increased Internet Brands’ revenue 30% by uniting customer lifecycle data with Marin’s Revenue Hub.

Fourth Quarter 2023 Financial Updates:

  • Net revenues totaled $4.4 million, a year-over-year decrease of 16% when compared to $5.2 million in the fourth quarter of 2022.
  • GAAP loss from operations was ($5.7) million, resulting in a GAAP operating margin of (132%), as compared to a GAAP loss from operations of ($5.2) million and a GAAP operating margin of (102%) for the fourth quarter of 2022.
  • Non-GAAP loss from operations was ($1.9) million, resulting in a non-GAAP operating margin of (43%), as compared to a non-GAAP loss from operations of ($4.2) million and a non-GAAP operating margin of (82%) for the fourth quarter of 2022.

Full Year 2023 Financial Updates:

  • Net revenues totaled $17.7 million, a year-over-year decrease of 11% when compared to $20.0 million for 2022.
  • GAAP loss from operations was ($22.8) million, resulting in a GAAP operating margin of (129%), as compared to a GAAP loss from operations of ($22.0) million and a GAAP operating margin of (110%) for 2022.
  • Non-GAAP loss from operations was ($14.6) million, resulting in a non-GAAP operating margin of (82%), as compared to a non-GAAP loss from operations of ($17.7) million and a non-GAAP operating margin of (88%) for 2022.
  • Cash and cash equivalents were $11.4 million as of December 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 first quarter of 2024 as follows:

Forward-Looking Guidance

In millions

Range of Estimate

From

To

Three Months Ending March 31, 2024

Revenues, net

$

4.0

$

4.3

Non-GAAP loss from operations

(2.2

)

(1.9

)

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 and full year ended December 31, 2023, and its outlook for the future. To access the call, please dial (877) 704-4453 in the United States or (201) 389-0920 internationally with reference to conference ID 13742151. A live webcast of the conference call will be accessible at https://viavid.webcasts.com/starthere.jsp?ei=1639585&tp_key=860ce9f72e. Following the completion of the call through 11:59 p.m. Eastern Time on February 29, 2024, 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 13742151.

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, impairment of 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 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 first quarter of 2024. 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 reduce our expenses or raise additional capital to meet our obligations as a going concern; 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 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; 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 February 22, 2024. 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)

December 31,

December 31,

(Unaudited; in thousands, except par value)

2023

2022

Assets:

Current assets:

Cash and cash equivalents

$

11,363

$

27,957

Accounts receivable, net

3,864

4,521

Prepaid expenses and other current assets

1,548

2,016

Total current assets

16,775

34,494

Property and equipment, net

120

3,213

Right-of-use assets, operating leases

1,912

3,844

Other non-current assets

508

533

Total assets

$

19,315

$

42,084

Liabilities and Stockholders' Equity:

Current liabilities:

Accounts payable

$

664

$

1,011

Accrued expenses and other current liabilities

2,099

3,513

Operating lease liabilities

1,518

1,645

Total current liabilities

4,281

6,169

Operating lease liabilities, non-current

394

2,199

Other long-term liabilities

1,001

1,002

Total liabilities

5,676

9,370

Stockholders’ equity:

Convertible preferred stock, $0.001 par value

Common stock, $0.001 par value

18

17

Additional paid-in capital

358,869

355,996

Accumulated deficit

(344,251

)

(322,334

)

Accumulated other comprehensive loss

(997

)

(965

)

Total stockholders’ equity

13,639

32,714

Total liabilities and stockholders’ equity

$

19,315

$

42,084

Marin Software Incorporated

Condensed Consolidated Statements of Operations

(On a GAAP basis)

Three Months Ended December 31,

Year Ended December 31,

(Unaudited; in thousands, except per share data)

2023

2022

2023

2022

Revenues, net

$

4,350

$

5,161

$

17,731

$

20,019

Cost of revenues

2,134

3,083

11,635

12,795

Gross profit

2,216

2,078

6,096

7,224

Operating expenses:

Sales and marketing

1,078

1,962

6,520

6,997

Research and development

1,636

2,901

10,235

11,832

General and administrative

1,974

2,459

8,871

10,396

Impairment loss on long-lived assets

3,276

3,276

Total operating expenses

7,964

7,322

28,902

29,225

Loss from operations

(5,748

)

(5,244

)

(22,806

)

(22,001

)

Other income, net

141

190

739

4,079

Loss before income taxes

(5,607

)

(5,054

)

(22,067

)

(17,922

)

Provision for income taxes

(344

)

64

(150

)

305

Net loss

$

(5,263

)

$

(5,118

)

$

(21,917

)

$

(18,227

)

Net loss per common share, basic and diluted

$

(0.29

)

$

(0.31

)

$

(1.24

)

$

(1.15

)

Weighted-average shares outstanding, basic and diluted

18,053

16,337

17,656

15,891

Marin Software Incorporated

Condensed Consolidated Statements of Cash Flows

(On a GAAP basis)

Year Ended December 31,

(Unaudited; in thousands)

2023

2022

Operating activities:

Net loss

$

(21,917

)

$

(18,227

)

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation

19

447

Amortization of internally developed software

1,701

1,810

Amortization of right-of-use assets

1,528

2,832

Amortization of deferred costs to obtain and fulfill contracts

366

352

Forgiveness of Paycheck Protection Program loan

(3,117

)

Impairment loss on long-lived assets

3,276

Loss on disposals of property and equipment and right-of-use assets

3

28

Unrealized foreign currency losses

46

80

Stock-based compensation related to equity awards

3,006

3,555

Provision for bad debts

(414

)

16

Deferred income tax benefits

(70

)

48

Changes in operating assets and liabilities

Accounts receivable

1,037

73

Prepaid expenses and other assets

183

(102

)

Accounts payable

(353

)

31

Accrued expenses and other liabilities

(1,466

)

(2,786

)

Operating lease liabilities

(1,528

)

(3,177

)

Net cash used in operating activities

(14,583

)

(18,137

)

Investing activities:

Purchases of property and equipment

(24

)

Capitalization of internally developed software

(1,807

)

(1,740

)

Net cash used in investing activities

(1,807

)

(1,764

)

Financing activities:

Proceeds from issuance of common shares through at-the-market offering, net of offering costs

1,333

Repayment of Paycheck Protection Program loan

(203

)

Employee taxes paid for withheld shares upon equity award settlement

(206

)

(424

)

Proceeds from employee stock purchase plan, net

(3

)

34

Net cash provided by (used in) financing activities

(209

)

740

Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash

5

61

Net decrease in cash and cash equivalents and restricted cash

(16,594

)

(19,100

)

Cash and cash equivalents and restricted cash:

Beginning of period

27,957

47,057

End of the period

$

11,363

$

27,957

Marin Software Incorporated

Reconciliation of GAAP to Non-GAAP Expenses

Three Months Ended

Year
Ended

Three Months Ended

Year
Ended

Mar 31,

Jun 30,

Sep 30,

Dec 31,

Dec 31,

Mar 31,

Jun 30,

Sep 30

Dec 31,

Dec 31,

(Unaudited; in thousands)

2022

2022

2022

2022

2022

2023

2023

2023

2023

2023

Sales and Marketing (GAAP)

$

1,787

$

1,588

$

1,660

$

1,962

$

6,997

$

2,025

$

1,935

$

1,482

$

1,078

$

6,520

Less Stock-based compensation

(175

)

(157

)

(99

)

(165

)

(596

)

(165

)

(184

)

(88

)

(65

)

(502

)

Less Restructuring related expenses

(122

)

(122

)

Sales and Marketing (Non-GAAP)

$

1,612

$

1,431

$

1,561

$

1,797

$

6,401

$

1,860

$

1,751

$

1,272

$

1,013

$

5,896

Research and Development (GAAP)

$

2,917

$

2,980

$

3,034

$

2,901

$

11,832

$

2,942

$

2,797

$

2,860

$

1,636

$

10,235

Less Stock-based compensation

(224

)

(213

)

(303

)

(256

)

(996

)

(270

)

(305

)

(131

)

(119

)

(825

)

Less Restructuring related expenses

(36

)

(59

)

(76

)

(171

)

(815

)

(22

)

(837

)

Plus Capitalization of internally developed software

512

408

449

397

1,766

579

578

354

296

1,807

Research and Development (Non-GAAP)

$

3,169

$

3,116

$

3,104

$

3,042

$

12,431

$

3,251

$

3,070

$

2,268

$

1,791

$

10,380

General and Administrative (GAAP)

$

2,469

$

2,545

$

2,923

$

2,459

$

10,396

$

2,336

$

2,442

$

2,119

$

1,974

$

8,871

Less Stock-based compensation

(334

)

(340

)

(405

)

(403

)

(1,482

)

(473

)

(627

)

(85

)

(187

)

(1,372

)

Less Restructuring related expenses

(78

)

(78

)

(189

)

(189

)

Less Third-party subpoena-related expenses

(72

)

(99

)

(198

)

(72

)

(441

)

(84

)

(45

)

(36

)

(30

)

(195

)

General and Administrative (Non-GAAP)

$

2,063

$

2,106

$

2,242

$

1,984

$

8,395

$

1,779

$

1,770

$

1,809

$

1,757

$

7,115

Marin Software Incorporated

Reconciliation of GAAP to Non-GAAP Measures

Three Months Ended

Year
Ended

Three Months Ended

Year
Ended

Mar 31,

Jun 30,

Sep 30,

Dec 31,

Dec 31,

Mar 31,

Jun 30,

Sep 30,

Dec 31,

Dec 31,

(Unaudited; in thousands)

2022

2022

2022

2022

2022

2023

2023

2023

2023

2023

Gross Profit (GAAP)

$

1,833

$

1,517

$

1,796

$

2,078

$

7,224

$

1,343

$

1,186

$

1,351

$

2,216

$

6,096

Plus Stock-based compensation

124

90

148

119

481

124

137

5

41

307

Plus Amortization of internally developed software

542

431

419

418

1,810

419

426

433

423

1,701

Plus Restructuring related expenses

17

17

671

2

673

Gross Profit (Non-GAAP)

$

2,516

$

2,038

$

2,363

$

2,615

$

9,532

$

1,886

$

1,749

$

2,460

$

2,682

$

8,777

Operating Loss (GAAP)

$

(5,340

)

$

(5,596

)

$

(5,821

)

$

(5,244

)

$

(22,001

)

$

(5,960

)

$

(5,988

)

$

(5,110

)

$

(5,748

)

$

(22,806

)

Plus Stock-based compensation

857

800

955

943

3,555

1,032

1,253

309

412

3,006

Plus Amortization of internally developed software

542

431

419

418

1,810

419

426

433

423

1,701

Plus Restructuring related expenses

53

59

154

266

1,797

24

1,821

Less Capitalization of internally developed software

(512

)

(408

)

(449

)

(397

)

(1,766

)

(579

)

(578

)

(354

)

(296

)

(1,807

)

Plus Third-party subpoena-related expenses

72

99

198

72

441

84

45

36

30

195

Plus Impairment loss on long-lived assets

3,276

3,276

Operating Loss (Non-GAAP)

$

(4,328

)

$

(4,615

)

$

(4,544

)

$

(4,208

)

$

(17,695

)

$

(5,004

)

$

(4,842

)

$

(2,889

)

$

(1,879

)

$

(14,614

)

Net Loss (GAAP)

$

(1,999

)

$

(5,374

)

$

(5,736

)

$

(5,118

)

$

(18,227

)

$

(5,783

)

$

(5,917

)

$

(4,954

)

$

(5,263

)

$

(21,917

)

Plus Stock-based compensation

857

800

955

943

3,555

1,032

1,253

309

412

3,006

Plus Amortization of internally developed software

542

431

419

418

1,810

419

426

433

423

1,701

Plus Restructuring related expenses

53

59

154

266

1,797

24

1,821

Less Capitalization of internally developed software

(512

)

(408

)

(449

)

(397

)

(1,766

)

(579

)

(578

)

(354

)

(296

)

(1,807

)

Plus Third-party subpoena-related expenses

72

99

198

72

441

84

45

36

30

195

Plus Impairment loss on long-lived assets

3,276

3,276

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

)

$

(1,394

)

$

(13,725

)


Contacts

Investor Relations, Marin Software
ir@marinsoftware.com

Media Contact
Wesley MacLaggan
Marketing, Marin Software
(415) 399-2580
press@marinsoftware.com

Read full story here

First published on Fri, Feb 23, 2024

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