Investor Relations

Marin Software Announces First Quarter 2021 Financial Results

Thursday, May 06, 2021 04:15 PM

SAN FRANCISCO, May 6, 2021 /PRNewswire/ -- Marin Software Incorporated (NASDAQ: MRIN), a leading provider of digital marketing software for performance-driven advertisers and agencies, today announced financial results for the first quarter ended March 31, 2021.

"We are thrilled with the increased pace of the innovation this quarter as we move beyond the MarinOne upgrade. Our customers continue to improve the performance of their digital marketing programs using our new forecasting, bidding, Insights and automation tools," said Chris Lien, Marin Software Chief Executive Officer.

First Quarter 2021 Business and Product Release Highlights:

  • Improved the forecasting tools in MarinOne to support forecasting for customizable categories or lines of business, in addition to forecasting for the program as a whole. This gives marketers information to make budget allocation decisions.
  • Added support for Google Smart Bidding, including bulk edit support for Target CPA (tCPA) and Target ROAS (tROAS), letting advertisers pick the bidding tools that best meet their needs across Google and Marin.
  • Added 13 new Insights to help marketers get the most out of their digital marketing campaigns by helping identify invalid credentials, sync errors, landing page issues, disapproved ads, and much more.
  • Upgraded reporting capabilities in MarinOne, including additional cross-client reporting, expanded monthly and daily roll up on history grid, additional pre-set filter options (including quarterly and yearly filters), and support for Last N period, where the user is able to define 'N' to be any number of days/weeks/months they need.
  • Added the ability to download completed Marin Search reports in MarinOne, in an effort to further streamline user workflows.
  • Introduced support for several new types of campaigns and ads, including Discovery Campaigns, Universal App Campaigns, and Showcase Shopping Ads.
  • Introduced Social Scheduled Actions to allow marketers to choose when they would like ads to be active or paused. This allows marketers to adjust for seasonality and plan necessary on/off toggles in advance.
  • Added several new use cases for Social Rules, including the ability to pause campaigns or ad sets based on performance, the ability to update ad set bids, and campaign budget management. We have also added rules to manage daily and lifetime spend ratios.
  • In Marin Social, customers can now use Media Plan parameters to automatically apply dynamic URL macros to their ads.
  • Introduced a new MarinOne module that is specifically designed to help users manage eCommerce campaigns.
  • Added support for Facebook to our Amazon Attribution solution, making it simple to track the Facebook-influenced impact on Amazon conversions.
  • Added support for Amazon Sponsored Display Audiences to help customers drive awareness.
  • We now offer a convenient diagnostics dashboard that can be used to keep tabs on Marin Tracker setup.

First Quarter 2021 Financial Updates:

  • Net revenues totaled $6.3 million, a year-over-year decrease of 27% when compared to $8.7 million in the first quarter of 2020.
  • GAAP loss from operations was ($2.4) million, resulting in a GAAP operating margin of (39%), as compared to a GAAP loss from operations of ($4.4) million and a GAAP operating margin of (51%) for the first quarter of 2020.
  • Non-GAAP loss from operations was ($2.5) million, resulting in a non-GAAP operating margin of (40%), as compared to a non-GAAP loss from operations of ($3.5) million and a non-GAAP operating margin of (40%) for the first quarter of 2020.

Reconciliations of GAAP to non-GAAP financial measures have been provided in the financial statement tables included in this press release. An explanation of these measures is also included below, under the heading "Non-GAAP Financial Measures."

Financial Outlook:

Marin is providing guidance for its second quarter of 2021 as follows:

Forward-Looking Guidance

In millions













Range of Estimate





From



To



Three Months Ended June 30, 2021










Revenues, net


$

5.5



$

6.0



Non-GAAP loss from operations



(3.4)




(2.9)



Non-GAAP loss from operations excludes the effects of stock-based compensation, amortization of internally developed software and intangible assets, impairment of goodwill and long-lived assets, capitalization of internally developed software, CARES Act employee retention credits and non-recurring costs associated with restructurings and divestitures.

Additionally, the Company does not reconcile its forward-looking non-GAAP loss from operations, due to variability between revenues and non-cash items such as stock-based compensation. The GAAP loss from operations includes stock-based compensation expense, which is affected by hiring and retention needs, as well as the future price of Marin's stock. As a result, a reconciliation of the forward-looking non-GAAP financial measures to the corresponding GAAP measures cannot be made without unreasonable effort.

Quarterly Results Conference Call

Marin Software will host a conference call today at 2:00 PM Pacific Time (5:00 PM Eastern Time) to review the Company's financial results for the quarter ended March 31, 2021, and its outlook for the future. To access the call, please dial (800) 926-5431 in the United States or (212) 231-2914 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=144428. Following the completion of the call through 11:59 p.m. Eastern Time on May 13, 2021, 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 21993546.

About Marin Software

Marin Software Incorporated's (NASDAQ: MRIN) mission is to give advertisers the power to drive higher efficiency and transparency in their paid marketing programs that run on the world's largest publishers. Marin Software provides enterprise marketing software for advertisers and agencies to integrate, align, and amplify their digital advertising spend across the web and mobile devices. Marin Software offers a unified SaaS advertising management platform for search, social, and eCommerce advertising. The Company helps digital marketers convert precise audiences, improve financial performance, and make better decisions. Headquartered in San Francisco with offices worldwide, Marin Software's technology powers marketing campaigns around the globe. For more information about Marin Software, please visit www.marinsoftware.com.

Non-GAAP Financial Measures

Marin uses certain non-GAAP financial measures in this release. Marin uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance. Marin believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures that Marin uses may differ from measures that other companies may use.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Non-GAAP expenses, measures and net loss per share. Marin defines non-GAAP sales and marketing, non-GAAP research and development, non-GAAP general and administrative, non-GAAP gross profit, non-GAAP operating loss and non-GAAP net loss as the respective GAAP balances, adjusted for stock-based compensation, amortization of internally developed software and intangible assets, impairment of goodwill and long-lived assets, non-cash expenses related to debt agreements, capitalization of internally developed software, CARES Act employee retention credit and non-recurring costs associated with restructurings and divestitures. Non-GAAP net loss per share is calculated as non-GAAP net loss divided by the weighted average shares outstanding.

Adjusted EBITDA. Marin defines Adjusted EBITDA as net loss, adjusted for stock-based compensation expense, depreciation, amortization of internally developed software and intangible assets, capitalization of internally developed software, impairment of goodwill and long-lived assets, benefit from or provision for income taxes, CARES Act employee retention credit, other income, net and non-recurring costs associated with restructurings and divestitures. 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, progress on product development efforts, product capabilities, advertiser and customer behavior, effects of the COVID-19 pandemic, and future financial results, including its outlook for the second quarter of 2021. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to the effects of the continuing global outbreak of COVID-19 on demand for our products and services; the amount of digital advertising spend managed by our customers using our products; the extent of customer acceptance and adoption 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 and liquidity and raise additional capital; our ability complete successfully our recent restructuring plan and realize cost savings; our ability to retain and attract qualified management, technical and sales and marketing personnel; any default under or required repayment of our indebtedness or any delays or reductions in forgiveness of such indebtedness, including our loan under the Paycheck Protection Program; 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; level of usage and advertising spend managed on our 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; 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 our ability to acquire and integrate other businesses or sell business assets. These forward-looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent report on Form 10-K, recent reports on Form 10-Q and current reports on Form 8-K, which we may file from time to time, and all of which are available free of charge at the SEC's website at www.sec.gov. Any of these risks could cause actual results to differ materially from expectations set forth in the forward-looking statements. All forward-looking statements in this press release reflect Marin's expectations as of May 6, 2021. Marin assumes no obligation to, and expressly disclaims any obligation to update any such forward-looking statements after the date of this release.

 

Marin Software Incorporated









Condensed Consolidated Balance Sheets









(On a GAAP basis)




















March 31,



December 31,


(Unaudited; in thousands, except par value)


2021



2020


Assets:









Current assets:









Cash and cash equivalents


$

14,671



$

14,280


Restricted cash



540




540


Accounts receivable, net



4,483




5,063


Prepaid expenses and other current assets



2,753




3,039


Total current assets



22,447




22,922


Property and equipment, net



5,022




5,477


Right-of-use assets, operating leases



5,538




7,737


Other non-current assets



711




873


Total assets


$

33,718



$

37,009


Liabilities and Stockholders' Equity:









Current liabilities:









Accounts payable


$

484



$

928


Accrued expenses and other current liabilities



5,064




6,552


Note payable, current



2,040




1,854


Operating lease liabilities



5,242




6,800


Total current liabilities



12,830




16,134


Note payable, net of current



1,280




1,466


Operating lease liabilities, non-current



1,051




1,814


Other long-term liabilities



1,727




1,780


Total liabilities



16,888




21,194


Stockholders' equity:









Common stock, $0.001 par value



11




10


Additional paid-in capital



311,342




308,065


Accumulated deficit



(293,375)




(291,163)


Accumulated other comprehensive loss



(1,148)




(1,097)


Total stockholders' equity



16,830




15,815


Total liabilities and stockholders' equity


$

33,718



$

37,009












 

Marin Software Incorporated










Condensed Consolidated Statements of Operations










(On a GAAP basis)






















Three Months Ended March 31,



(Unaudited; in thousands, except per share data)


2021



2020



Revenues, net


$

6,308



$

8,660



Cost of revenues



3,241




5,345



Gross profit



3,067




3,315



Operating expenses:










Sales and marketing



1,246




2,312



Research and development



2,399




3,437



General and administrative



1,869




1,981



Total operating expenses



5,514




7,730



Loss from operations



(2,447)




(4,415)



Other income, net



327




469



Loss before provision for income taxes



(2,120)




(3,946)



Provision for income taxes



92




25



Net loss


$

(2,212)



$

(3,971)



Net loss per common share, basic and diluted


$

(0.21)



$

(0.58)



Weighted-average shares outstanding, basic and diluted



10,300




6,819














 

Marin Software Incorporated









Condensed Consolidated Statements of Cash Flows









(On a GAAP basis)




















Three Months Ended March 31,


(Unaudited; in thousands)


2021



2020


Operating activities:









Net loss


$

(2,212)



$

(3,971)


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









Depreciation



240




893


Amortization of internally developed software



624




864


Amortization of intangible assets






95


Amortization of deferred costs to obtain and fulfill contracts



133




258


Interest expense



5





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



30




1


Unrealized foreign currency losses



25




24


Stock-based compensation related to equity awards



262




446


Provision for bad debts



(58)




(144)


Net change in operating leases



(122)




(110)


Changes in operating assets and liabilities









Accounts receivable



628




2,032


Prepaid expenses and other assets



215




623


Accounts payable



(445)




(380)


Accrued expenses and other liabilities



(1,566)




(2,391)


Net cash used in operating activities



(2,241)




(1,760)


Investing activities:









Purchases of property and equipment



(6)





Capitalization of internally developed software



(420)




(540)


Net cash used in investing activities



(426)




(540)


Financing activities:









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



3,120





Payment of principal on finance lease liabilities



(11)




(191)


Employee taxes paid for withheld shares upon equity award settlement



(24)




(57)


Proceeds from employee stock purchase plan, net



17




17


Net cash provided by (used in) financing activities



3,102




(231)


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



(44)




(19)


Net increase (decrease) in cash and cash equivalents and restricted cash



391




(2,550)


Cash and cash equivalents and restricted cash:









Beginning of period



14,820




12,105


End of period


$

15,211



$

9,555











 


Marin Software Incorporated




























Reconciliation of GAAP to Non-GAAP Expenses


























































Three Months Ended




Year Ended




Three Months
Ended





March 31,

2020



June 30,

2020



September 30,

2020



December 31,

2020




December 31,

2020




March 31,

2021



(Unaudited; in thousands)
















Sales and Marketing (GAAP)


$

2,312



$

1,880



$

1,491



$

1,275




$

6,958




$

1,246



Less Stock-based compensation



(110)




(149)




(24)




(70)





(353)





(66)



Less Restructuring related expenses



(50)







(214)




(40)





(304)





2



Plus CARES Act employee retention credit




















42



Sales and Marketing (Non-GAAP)


$

2,152



$

1,731



$

1,253



$

1,165




$

6,301




$

1,224



Research and Development (GAAP)


$

3,437



$

3,338



$

3,106



$

2,934




$

12,815




$

2,399



Less Stock-based compensation



(167)




(217)




(123)




(100)





(607)





(98)



Less Amortization of intangible assets



(48)














(48)







Less Restructuring related expenses









(185)




(30)





(215)





(2)



Plus CARES Act employee retention credit




















252



Plus Capitalization of internally developed software



540




418




484




427





1,869





434



Research and Development (Non-GAAP)


$

3,762



$

3,539



$

3,282



$

3,231




$

13,814




$

2,985



General and Administrative (GAAP)


$

1,981



$

2,011



$

2,131



$

2,436




$

8,559




$

1,869



Less Stock-based compensation



(75)




(72)




(67)




(69)





(283)





(63)



Less Restructuring related expenses









(123)




(5)





(128)





(2)



Plus CARES Act employee retention credit




















70



General and Administrative (Non-GAAP)


$

1,906



$

1,939



$

1,941



$

2,362




$

8,148




$

1,874
































 

Marin Software Incorporated




























Reconciliation of GAAP to Non-GAAP Measures


























































Three Months Ended




Year Ended




Three Months
Ended





March 31,

2020



June 30,

2020



September 30,

2020



December 31,

2020




December 31,

2020




March 31,

2021



(Unaudited; in thousands)
















Gross Profit (GAAP)


$

3,315



$

2,690



$

2,473



$

3,559




$

12,037




$

3,067



Plus Stock-based compensation



94




129




(19)




47





251





35



Plus Amortization of internally developed software



864




818




648




654





2,984





624



Plus Amortization of intangible assets



47














47







Plus Restructuring related expenses



(7)







529




7





529





1



Less CARES Act employee retention credit




















(175)



Gross Profit (Non-GAAP)


$

4,313



$

3,637



$

3,631



$

4,267




$

15,848




$

3,552



Operating Loss (GAAP)


$

(4,415)



$

(4,539)



$

(4,255)



$

(3,086)




$

(16,295)




$

(2,447)



Plus Stock-based compensation



446




567




195




286





1,494





262



Plus Amortization of internally developed software



864




818




648




654





2,984





624



Plus Amortization of intangible assets



95














95







Plus Restructuring related expenses



43







1,051




82





1,176





3



Less CARES Act employee retention credit




















(539)



Less Capitalization of internally developed software



(540)




(418)




(484)




(427)





(1,869)





(434)



Operating Loss (Non-GAAP)


$

(3,507)



$

(3,572)



$

(2,845)



$

(2,491)




$

(12,415)




$

(2,531)



Net Loss (GAAP)


$

(3,971)



$

(3,481)



$

(4,072)



$

(2,527)




$

(14,051)




$

(2,212)



Plus Stock-based compensation



446




567




195




286





1,494





262



Plus Amortization of internally developed software



864




818




648




654





2,984





624



Plus Amortization of intangible assets



95














95







Plus Restructuring related expenses



43







1,051




82





1,176





3



Less CARES Act employee retention credit




















(539)



Less Capitalization of internally developed software



(540)




(418)




(484)




(427)





(1,869)





(434)



Net Loss (Non-GAAP)


$

(3,063)



$

(2,514)



$

(2,662)



$

(1,932)




$

(10,171)




$

(2,296)
































 

 

Marin Software Incorporated




























Calculation of Non-GAAP Earnings Per Share


























































Three Months Ended




Year Ended




Three Months
Ended





March 31,

2020



June 30,

2020



September 30,

2020



December 31,

2020




December 31,

2020




March 31,

2021



(Unaudited; in thousands, except per share data)
















Net Loss (Non-GAAP)


$

(3,063)



$

(2,514)



$

(2,662)



$

(1,932)




$

(10,171)




$

(2,296)



Weighted-average shares outstanding, basic and diluted



6,819




6,912




7,017




8,616





7,344





10,300



Non-GAAP net loss per common share, basic and diluted


$

(0.45)



$

(0.36)



$

(0.38)



$

(0.22)




$

(1.38)




$

(0.22)































 

Marin Software Incorporated




























Reconciliation of Net Loss to Adjusted EBITDA


























































Three Months Ended




Year Ended




Three Months
Ended





March 31,

2020



June 30,

2020



September 30,

2020



December 31,

2020




December 31,

2020




March 31,

2021



(Unaudited; in thousands)
















Net Loss


$

(3,971)



$

(3,481)



$

(4,072)



$

(2,527)




$

(14,051)




$

(2,212)



Depreciation



893




402




366




263





1,924





240



Amortization of internally developed software



864




818




648




654





2,984





624



Amortization of intangible assets



95














95







Provision for (benefit from) income taxes



25




(521)




(72)




(143)





(711)





92



Stock-based compensation



446




567




195




286





1,494





262



CARES Act employee retention credit




















(539)



Capitalization of internally developed software



(540)




(418)




(484)




(427)





(1,869)





(434)



Restructuring related expenses



43







1,051




82





1,176





3



Other income, net



(469)




(537)




(111)




(416)





(1,533)





(327)



Adjusted EBITDA


$

(2,614)



$

(3,170)



$

(2,479)



$

(2,228)




$

(10,491)




$

(2,291)































 

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