Investor Relations

Marin Software Announces Fourth Quarter and Full Year 2016 Financial Results

Tuesday, February 28, 2017 04:17 PM

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

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