Investor Relations

SAN FRANCISCO, CA -- (Marketwired) -- 02/28/17 -- Marin Software Incorporated (NYSE: MRIN), a leading provider of cross-channel, cross-device, enterprise marketing software for advertisers and agencies, today announced financial results for the fourth quarter and full year ended December 31, 2016.

"Given the financial discipline we showed, Marin Software was able to deliver $2.4 million of Adjusted EBITDA for the full year, and exit 2016 with $35.7 million in cash and cash equivalents and restricted cash," said Chris Lien, chief executive officer of Marin Software. "This provides us the financial resources to support a return to growth, including enabling us to continue to invest in product innovation to meet the advertising needs of the world's leading brands. With our new product innovation, along with improvements in our execution, we expect to return to growth as we deliver on our open, independent, cross-channel performance advertising platform vision."

Fourth Quarter 2016 Financial Highlights:

• Net revenues totaled $22.9 million, a year-over-year decrease of 21%, when compared to $29.0 million in the fourth quarter of 2015.
• GAAP gross profit was $14.5 million, resulting in a gross margin of 63%, compared to GAAP gross profit of $19.6 million and a gross margin of 67% during the fourth quarter of 2015. Non-GAAP gross profit was $15.8 million, resulting in a non-GAAP gross margin of 69%, compared to non-GAAP gross profit of $21.0 million and a non-GAAP gross margin of 72% during the fourth quarter of 2015.
• GAAP loss from operations was ($4.1) million, compared to ($2.1) million for the fourth quarter of 2015. GAAP operating margin was (18%), compared to (7%) during the fourth quarter of 2015. Non-GAAP loss from operations was ($1.4) million, compared to Non-GAAP income from operations of $1.7 million for the fourth quarter of 2015. Non-GAAP operating margin was (6%), compared to 6% during the fourth quarter of 2015.
• GAAP net loss was ($4.6) million, or ($0.12) per share, based upon 38.7 million weighted average shares outstanding. This compares to ($2.1) million, or ($0.06) per share, based upon 37.2 million weighted average shares outstanding during the fourth quarter of 2015.
• Non-GAAP net loss was ($1.9) million, or ($0.05) per share, based upon 38.7 million weighted average shares outstanding. This compares to Non-GAAP net income of $1.7 million, or $0.04 per share, based upon 37.2 million weighted average shares outstanding during the fourth quarter of 2015.
• Adjusted EBITDA was $0.03 million, compared to $3.5 million in the fourth quarter of 2015.
• As of December 31, 2016, cash and cash equivalents and restricted cash totaled $35.7 million, compared to $37.3 million as of December 31, 2015.

Full Year 2016 Financial Highlights:

• Net revenues totaled $99.9 million, a year-over-year decrease of 8%, when compared to $108.5 million in 2015.
• GAAP gross profit was $64.7 million, resulting in a gross margin of 65%, compared to GAAP gross profit of $68.4 million and a gross margin of 63% during 2015. Non-GAAP gross profit was $70.2 million, resulting in a non-GAAP gross margin of 70%, compared to non-GAAP gross profit of $73.3 million and a non-GAAP gross margin of 68% during 2015.
• GAAP loss from operations was ($15.9) million, compared to ($32.4) million in 2015. GAAP operating margin was (16%), compared to (30%) during 2015. Non-GAAP loss from operations was ($3.7) million, compared to ($14.9) million during 2015. Non-GAAP operating margin was (4%), compared to (14%) during 2015.
• GAAP net loss was ($16.5) million, or ($0.43) per share, based upon 38.3 million weighted average shares outstanding. This compares to ($33.3) million, or ($0.91) per share, based upon 36.6 million weighted average shares outstanding in 2015.
• Non-GAAP net loss was ($4.2) million, or ($0.11) per share, based upon 38.3 million weighted average shares outstanding. This compares to Non-GAAP net loss of ($15.7) million, or ($0.43) per share, based upon 36.6 million weighted average shares outstanding during 2015.
• Adjusted EBITDA was $2.4 million, compared to ($7.9) million in 2015.

A reconciliation of GAAP to non-GAAP financial measures has 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."

Fourth Quarter 2016 Business and Product Release Highlights:

• Debuted a proprietary global media plan functionality to support larger, more complex social campaigns with multiple objectives.
• Launched support for the Store Visits objective, giving marketers a better view of the impact of Facebook advertising on offline store traffic.
• Developed Search Intent Harvesting tools that allow marketers to leverage search signals in social campaigns to maximize performance of cross channel initiatives.
• Invited select customers to participate in the Platform Beta program, which delivers improved scale, faster data loading and application speed, combined with significant usability improvements.
• Continued to update optimization tools, further enhancing Marin Software's ability to deliver performance for marketers. Improvements include: faster bid calculations, easier bidding setup with advanced clustering technology, device-specific goals, forecasting, and budget allocation tools.

Financial Outlook:

As of February 28, 2017, Marin is initiating guidance for its first quarter 2017 as follows:

Forward-Looking Guidance
In millions, except per share data
			Range of Estimate
			From				To
Three Months Ending March 31, 2017
	Revenues, net		$	19.0			$	19.5
	Non-GAAP loss from operations		$	(5.6	)		$	(5.1	)
	Non-GAAP net loss per share		$	(0.14	)		$	(0.13	)
	Weighted-average shares outstanding			39.1

Non-GAAP loss from operations and non-GAAP net loss per share excludes the effects of stock-based compensation, amortization of internally developed software, amortization of intangible assets, noncash expenses related to warrants, non-recurring costs associated with acquisitions and restructurings, and capitalization of internally developed software.

Additionally, the Company does not reconcile its forward-looking non-GAAP financial measures, non-GAAP loss from operations and non-GAAP net loss per share, due to variability between revenues and non-cash items such as stock-based compensation. The GAAP measures, loss from operations and net loss per share, include stock-based compensation expense, which is affected by hiring and retention needs, as well as the future price of Marin Software's stock. As a result, 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, 2016, and its outlook for the future. To access the call, please dial (877) 705-6003 in the U.S. or (201) 493-6725 internationally with reference to the company name and conference title. A live webcast of the conference call will be accessible at: http://public.viavid.com/index.php?id=122920. Following the completion of the call through 11:59 p.m. Eastern Time on March 7, 2017, a recording will be available for replay at the Company's website at: http://investor.marinsoftware.com/ and a telephone replay will be available by dialing (844) 512-2921 in the U.S. or (412) 317-6671 internationally with the recording access code 13654971.

About Marin Software

Marin Software Incorporated's (NYSE: MRIN) mission is to give advertisers the power to drive higher efficiency, effectiveness, and transparency in their paid marketing programs that run on the world's largest publishers. Marin provides industry leading enterprise marketing software for advertisers and agencies to measure, manage, and optimize billions of dollars in annualized ad spend across the web and mobile devices. Offering an integrated SaaS ad management platform for search, social, and display advertising, Marin helps digital marketers improve financial performance, save time, and make better decisions. Advertisers use Marin to create, target, and convert precise audiences based on recent buying signals from users' search, social, and display interactions. Headquartered in San Francisco, with offices in eight countries, Marin's technology powers marketing campaigns around the globe. For more information about Marin Software, please visit: http://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, the amortization of intangible assets, the capitalization of internally developed software, noncash expenses related to the issuance of warrants, the amortization of internally developed software and the non-recurring costs associated with acquisitions and restructurings. Non-GAAP net loss per share is calculated as non-GAAP net loss divided by the weighted average shares outstanding that are adjusted to assume the conversion of outstanding preferred shares to common shares as of the beginning of the period.

Adjusted EBITDA. Marin defines Adjusted EBITDA as net income (loss), adjusted for stock-based compensation expense, depreciation, the amortization of internally developed software, the amortization of intangible assets, the capitalization of internally developed software, interest expense, net, the benefit from or provision for income taxes, other income or expenses, net and the non-recurring costs associated with acquisitions and restructurings. 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 and for bonus compensation purposes, 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, expectations about our ability to return to growth, impact of investments in product and technology on future operating results, progress on product development efforts, product capabilities and future financial results, including its outlook for the first quarter of 2017. 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 grow sales to new and existing customers; our ability to expand our sales and marketing capabilities; our ability to retain and attract qualified management and technical personnel; delays in the release of updates to our product platform or new 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; adverse changes in our relationships with and access to publishers and advertising agencies; level of usage and advertising spend managed on our platform; our ability to expand sales of our solutions in channels other than search advertising; any slow-down in the search advertising market generally; 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; acceptance and continued usage of our platform and services by customers and 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; adverse changes in general economic or market conditions; and the ability to acquire and integrate other businesses. 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, 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 28, 2017. 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 Inc.
Condensed Consolidated Balance Sheets
(On a GAAP basis)
				December 31,				December 31,
(Unaudited; in thousands, except par value)				2016				2015
Assets
Current assets
	Cash and cash equivalents			$	34,420			$	37,326
	Restricted cash				1,293				-
	Accounts receivable, net				18,761				21,718
	Prepaid expenses and other current assets				3,808				4,186
		Total current assets			58,282				63,230
Property and equipment, net					20,581				21,817
Goodwill					19,318				19,417
Intangible assets, net					7,325				10,405
Other noncurrent assets					1,587				1,323
		Total assets		$	107,093			$	116,192
Liabilities and Stockholders' Equity
Current liabilities
	Accounts payable			$	2,434			$	1,710
	Accrued expenses and other current liabilities				8,362				11,185
	Deferred revenues				795				1,430
	Current portion of long-term debt				1,015				1,384
		Total current liabilities			12,606				15,709
Long-term debt, less current portion					2,381				1,557
Other long-term liabilities					4,508				4,795
		Total liabilities			19,495				22,061
Stockholders' equity
	Common stock, $0.001 par value				39				37
	Additional paid-in capital				286,659				275,604
	Accumulated deficit				(196,213	)			(179,733	)
	Accumulated other comprehensive loss				(2,887	)			(1,777	)
		Total stockholders' equity			87,598				94,131
		Total liabilities and stockholders' equity		$	107,093			$	116,192

Marin Software Inc.
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)				2016				2015				2016				2015
Revenues, net				$	22,924			$	29,015			$	99,878			$	108,530
Cost of revenues (1) (2) (3)					8,451				9,454				35,203				40,137
		Gross profit			14,473				19,561				64,675				68,393
Operating expenses (1) (2) (3)
Sales and marketing					6,916				9,076				32,889				45,132
Research and development					6,520				7,478				27,841				33,318
General and administrative					5,168				5,134				19,890				22,391
		Total operating expenses			18,604				21,688				80,620				100,841
		Loss from operations			(4,131	)			(2,127	)			(15,945	)			(32,448	)
Interest expense, net					(38	)			(36	)			(129	)			(118	)
Other income, net					366				356				998				222
		Loss before provision for income taxes			(3,803	)			(1,807	)			(15,076	)			(32,344	)
Provision for income taxes					(793	)			(331	)			(1,404	)			(1,005	)
		Net loss		$	(4,596	)		$	(2,138	)		$	(16,480	)		$	(33,349	)
Net loss per common share, basic and diluted				$	(0.12	)		$	(0.06	)		$	(0.43	)		$	(0.91	)
Weighted-average shares outstanding, basic and diluted					38,699				37,212				38,318				36,580
(1) Includes stock-based compensation expense as follows:
	Cost of revenues			$	299			$	371			$	1,314			$	1,171
	Sales and marketing				198				433				1,281				2,537
	Research and development				840				1,687				4,989				7,518
	General and administrative				366				1,088				2,711				4,393
		Total		$	1,703			$	3,579			$	10,295			$	15,619
(2) Includes amortization of intangible assets as follows:
	Cost of revenues			$	247			$	271			$	1,027			$	1,033
	Sales and marketing				223				247				934				921
	Research and development				247				271				1,027				1,034
	General and administrative				13				37				92				146
		Total		$	730			$	826			$	3,080			$	3,134
(3) Includes restructuring related expenses as follows:
	Cost of revenues			$	9			$	68			$	184			$	173
	Sales and marketing				135				59				348				718
	Research and development				-				-				44				53
	General and administrative				3				6				20				270
		Total		$	147			$	133			$	596			$	1,214

Marin Software Inc.
Condensed Consolidated Statements of Cash Flows
(On a GAAP basis)
						Year Ended December 31,
(Unaudited; in thousands)						2016				2015
Operating activities
Net loss						$	(16,480	)		$	(33,349	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
	Depreciation						6,035				6,993
	Amortization of internally developed software						2,988				2,550
	Amortization of intangible assets						3,080				3,134
	(Gain) loss on disposal of property and equipment						(3	)			19
	Unrealized foreign currency gains						(419	)			(216	)
	Noncash interest expense related to debt agreements						27				42
	Stock-based compensation related to equity awards and restricted stock						10,295				15,619
	Provision for bad debts						2,328				1,210
	Deferred income tax benefits						(305	)			(177	)
	Excess tax benefits from stock-based award activities						-				(3	)
	Payment of contingent consideration for prior acquisition						(93	)			-
	Changes in operating assets and liabilities, net of effect of acquisitions
		Accounts receivable					795				(2,986	)
		Prepaid expenses and other current assets					546				575
		Other assets					(346	)			348
		Accounts payable					741				(1,597	)
		Deferred revenues					(628	)			(625	)
		Accrued expenses and other current liabilities					(2,842	)			1,433
			Net cash provided by (used in) operating activities				5,719				(7,030	)
Investing activities
Purchases of property and equipment							(1,207	)			(8,584	)
Proceeds from disposal of property and equipment							5				-
Capitalization of internally developed software							(4,712	)			(5,568	)
Acquisitions of businesses, net of cash acquired							-				(7,738	)
			Net cash used in investing activities				(5,914	)			(21,890	)
Financing activities
Repayment of notes payable							(1,436	)			(3,649	)
Debt issuance costs							-				(53	)
Repurchase of unvested shares							-				(2	)
Proceeds from exercise of common stock options							390				1,439
Proceeds from employee stock purchase plan, net							663				968
Stock issuance costs							-				(51	)
Excess tax benefits from stock-based award activities							-				3
			Net cash used in financing activities				(383	)			(1,345	)
				Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash			(1,035	)			(662	)
			Net decrease in cash and cash equivalents and restricted cash				(1,613	)			(30,927	)
Cash and cash equivalents and restricted cash
Beginning of period							37,326				68,253
End of period						$	35,713			$	37,326
Supplemental disclosure of noncash investing and financing activities
Acquisition of equipment through capital leases						$	1,864			$	2,350
Purchases of property and equipment recorded in accounts payable and accrued expenses							5				-
Issuance of common stock under employee stock purchase plan							547				1,035
Issuance of common stock in connection with acquisitions of businesses							-				4,338

Marin Software Inc.

Reconciliation of GAAP to Non-GAAP Expenses (1)

			Three Months Ended																Year Ended				Three Months Ended																Year Ended
(Unaudited; in thousands)			March 31, 2015				June 30, 2015				September 30, 2015				December 31, 2015				December 31, 2015				March 31, 2016				June 30, 2016				September 30, 2016				December 31, 2016				December 31, 2016
Sales and Marketing (GAAP)			$	12,157			$	13,064			$	10,835			$	9,076			$	45,132			$	9,107			$	9,285			$	7,581			$	6,916			$	32,889
	Less Stock-based compensation			(715	)			(954	)			(435	)			(433	)			(2,537	)			(499	)			(422	)			(162	)			(198	)			(1,281	)
	Less Amortization of intangible assets			(180	)			(247	)			(247	)			(247	)			(921	)			(248	)			(240	)			(223	)			(223	)			(934	)
	Less Restructuring related expenses			-				-				(659	)			(59	)			(718	)			-				(211	)			(2	)			(135	)			(348	)
Sales and Marketing (Non-GAAP)			$	11,262			$	11,863			$	9,494			$	8,337			$	40,956			$	8,360			$	8,412			$	7,194			$	6,360			$	30,326
Research and Development (GAAP)			$	8,484			$	9,194			$	8,162			$	7,478			$	33,318			$	8,009			$	7,044			$	6,268			$	6,520			$	27,841
	Less Stock-based compensation			(1,627	)			(2,340	)			(1,864	)			(1,687	)			(7,518	)			(2,022	)			(1,275	)			(852	)			(840	)			(4,989	)
	Less Amortization of intangible assets			(216	)			(276	)			(271	)			(271	)			(1,034	)			(271	)			(263	)			(246	)			(247	)			(1,027	)
	Less Restructuring related expenses			-				-				(53	)			-				(53	)			-				(48	)			4				-				(44	)
	Plus Capitalization of internally developed software			827				1,597				1,683				1,461				5,568				1,493				1,407				1,150				662				4,712
Research and Development (Non-GAAP)			$	7,468			$	8,175			$	7,657			$	6,981			$	30,281			$	7,209			$	6,865			$	6,324			$	6,095			$	26,493
General and Administrative (GAAP)			$	5,720			$	5,655			$	5,882			$	5,134			$	22,391			$	4,969			$	5,018			$	4,735			$	5,168			$	19,890
	Less Stock-based compensation			(924	)			(1,323	)			(1,058	)			(1,088	)			(4,393	)			(880	)			(933	)			(532	)			(366	)			(2,711	)
	Less Amortization of intangible assets			(35	)			(37	)			(37	)			(37	)			(146	)			(36	)			(28	)			(15	)			(13	)			(92	)
	Less Acquisition related expenses			(408	)			(128	)			(68	)			(9	)			(613	)			(9	)			(20	)			-				(11	)			(40	)
	Less Restructuring related expenses			-				-				(264	)			(6	)			(270	)			-				(15	)			(2	)			(3	)			(20	)
General and Administrative (Non-GAAP)			$	4,353			$	4,167			$	4,455			$	3,994			$	16,969			$	4,044			$	4,022			$	4,186			$	4,775			$	17,027

(1)	The sum of the quarterly financial information may vary from full year financial information due to rounding.

Marin Software Inc.

Reconciliation of GAAP to Non-GAAP Measures (1)

			Three Months Ended																Year Ended				Three Months Ended																Year Ended
(Unaudited; in thousands)			March 31, 2015				June 30, 2015				September 30, 2015				December 31, 2015				December 31, 2015				March 31, 2016				June 30, 2016				September 30, 2016				December 31, 2016				December 31, 2016
Gross Profit (GAAP)			$	16,704			$	16,176			$	15,952			$	19,561			$	68,393			$	17,998			$	16,859			$	15,345			$	14,473			$	64,675
	Plus Stock-based compensation			229				322				249				371				1,171				421				309				285				299				1,314
	Plus Amortization of internally developed software			542				625				683				700				2,550				681				719				780				808				2,988
	Plus Amortization of intangible assets			215				276				271				271				1,033				271				263				246				247				1,027
	Plus Restructuring related expenses			-				-				105				68				173				-				151				24				9				184
Gross Profit (Non-GAAP)			$	17,690			$	17,399			$	17,260			$	20,971			$	73,320			$	19,371			$	18,301			$	16,680			$	15,836			$	70,188
Operating Loss (GAAP)			$	(9,657	)		$	(11,737	)		$	(8,927	)		$	(2,127	)		$	(32,448	)		$	(4,087	)		$	(4,488	)		$	(3,239	)		$	(4,131	)		$	(15,945	)
	Plus Stock-based compensation			3,495				4,939				3,606				3,579				15,619				3,822				2,939				1,831				1,703				10,295
	Plus Amortization of internally developed software			542				625				683				700				2,550				681				719				780				808				2,988
	Plus Amortization of intangible assets			646				836				826				826				3,134				826				794				730				730				3,080
	Plus Acquisition related expenses			408				128				68				9				613				9				20				-				11				40
	Plus Restructuring related expenses			-				-				1,081				133				1,214				-				425				24				147				596
	Less Capitalization of internally developed software			(827	)			(1,597	)			(1,683	)			(1,461	)			(5,568	)			(1,493	)			(1,407	)			(1,150	)			(662	)			(4,712	)
Operating (Loss) Income (Non-GAAP)			$	(5,393	)		$	(6,806	)		$	(4,346	)		$	1,659			$	(14,886	)		$	(242	)		$	(998	)		$	(1,024	)		$	(1,394	)		$	(3,658	)
Net Loss (GAAP)			$	(9,660	)		$	(12,047	)		$	(9,504	)		$	(2,138	)		$	(33,349	)		$	(4,413	)		$	(4,418	)		$	(3,053	)		$	(4,596	)		$	(16,480	)
	Plus Stock-based compensation			3,495				4,939				3,606				3,579				15,619				3,822				2,939				1,831				1,703				10,295
	Plus Amortization of internally developed software			542				625				683				700				2,550				681				719				780				808				2,988
	Plus Amortization of intangible assets			646				836				826				826				3,134				826				794				730				730				3,080
	Plus Noncash expenses related to warrants			9				8				19				6				42				7				6				5				9				27
	Plus Acquisition related expenses			408				128				68				9				613				9				20				-				11				40
	Plus Restructuring related expenses			-				-				1,081				133				1,214				-				425				24				147				596
	Less Capitalization of internally developed software			(827	)			(1,597	)			(1,683	)			(1,461	)			(5,568	)			(1,493	)			(1,407	)			(1,150	)			(662	)			(4,712	)
Net (Loss) Income (Non-GAAP)			$	(5,387	)		$	(7,108	)		$	(4,904	)		$	1,654			$	(15,745	)		$	(561	)		$	(922	)		$	(833	)		$	(1,850	)		$	(4,166	)

(1)	The sum of the quarterly financial information may vary from full year financial information due to rounding.

Marin Software Inc.

Calculation of Non-GAAP Earnings Per Share (1)

		Three Months Ended																Year Ended				Three Months Ended																	Year Ended
(Unaudited; in thousands, except per share data)		March 31, 2015				June 30, 2015				September 30, 2015				December 31, 2015				December 31, 2015				March 31, 2016				June 30, 2016				September 30, 2016				December 31, 2016					December 31, 2016
Net (Loss) Income (Non-GAAP)		$	(5,387	)		$	(7,108	)		$	(4,904	)		$	1,654			$	(15,745	)		$	(561	)		$	(922	)		$	(833	)		$	(1,850	)			$	(4,166	)
Weighted-average shares outstanding, basic and diluted			35,745				36,389				36,953				37,212				36,580				37,767				38,280				38,520				38,699					38,318
Non-GAAP net (loss) income per common share, basic and diluted		$	(0.15	)		$	(0.20	)		$	(0.13	)		$	0.04			$	(0.43	)		$	(0.01	)		$	(0.02	)		$	(0.02	)		$	(0.05	)			$	(0.11	)

Marin Software Inc.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (1)

			Three Months Ended																Year Ended				Three Months Ended																Year Ended
(Unaudited; in thousands)			March 31, 2015				June 30, 2015				September 30, 2015				December 31, 2015				December 31, 2015				March 31, 2016				June 30, 2016				September 30, 2016				December 31, 2016				December 31, 2016
Net Loss			$	(9,660	)		$	(12,047	)		$	(9,504	)		$	(2,138	)		$	(33,349	)		$	(4,413	)		$	(4,418	)		$	(3,053	)		$	(4,596	)		$	(16,480	)
	Depreciation			1,630				1,675				1,861				1,827				6,993				1,665				1,542				1,403				1,425				6,035
	Amortization of internally developed software			542				625				683				700				2,550				681				719				780				808				2,988
	Amortization of intangible assets			646				836				826				826				3,134				826				794				730				730				3,080
	Interest expense, net			11				8				63				36				118				18				34				39				38				129
	Provision for (benefit from) income taxes			236				138				300				331				1,005				341				307				(37	)			793				1,404
EBITDA			$	(6,595	)		$	(8,765	)		$	(5,771	)		$	1,582			$	(19,549	)		$	(882	)		$	(1,022	)		$	(138	)		$	(802	)		$	(2,844	)
	Stock-based compensation			3,495				4,939				3,606				3,579				15,619				3,822				2,939				1,831				1,703				10,295
	Capitalization of internally developed software			(827	)			(1,597	)			(1,683	)			(1,461	)			(5,568	)			(1,493	)			(1,407	)			(1,150	)			(662	)			(4,712	)
	Acquisition related expenses			408				128				68				9				613				9				20				-				11				40
	Restructuring related expenses			-				-				1,081				133				1,214				-				425				24				147				596
	Other (income) expenses, net			(244	)			164				214				(356	)			(222	)			(33	)			(411	)			(188	)			(366	)			(998	)
Adjusted EBITDA			$	(3,763	)		$	(5,131	)		$	(2,485	)		$	3,486			$	(7,893	)		$	1,423			$	544			$	379			$	31			$	2,377

(1)	The sum of the quarterly financial information may vary from full year financial information due to rounding.

Investor Relations Contact:
Investor Relations
Marin Software
ir@marinsoftware.com

Media Contact:
Wesley MacLaggan
Marketing
Marin Software
(415) 399-2586
press@marinsoftware.com

Source: Marin Software