comScore, Inc. Reports Second Quarter 2015 Results

comScore Announces Record Quarterly Revenues and Adjusted EBITDA

vCE in DoubleClick out of Beta

Aug 04, 2015, 07:00 ET from comScore, Inc.

RESTON, Va., Aug. 4, 2015 /PRNewswire/ -- comScore, Inc. (NASDAQ: SCOR), a global media measurement and analytics company, today announced financial results for the second quarter 2015.  

Second Quarter 2015

comScore achieved record second quarter GAAP revenue of $91.4 million, an increase of 14% compared to the second quarter of 2014. GAAP loss before income taxes was $2.7 million. GAAP net loss was $4.8 million, or $0.12 per basic and diluted share.

Second quarter 2015 results and metrics compared to second quarter 2014 on a proforma basis* were as follows:

  • Revenue of $91.3 million, up 16%.
  • Adjusted EBITDA of $22.9 million, up 30%.
  • Adjusted EBITDA margin was 25% of revenue, up 300 basis points.

Year to date 2015 results and metrics compared to the six months ended June 30, 2014 on a proforma basis* were as follows:

  • Revenue of $178.3 million, up 15%.
  • Adjusted EBITDA of $44.2 million, up 28%.
  • Adjusted EBITDA margin was 25% of revenue, up 300 basis points.

"I'm pleased to share that comScore delivered a quarter of record revenues and strong profitability," said Serge Matta, President and Chief Executive Officer of comScore. "Because of our continued positive momentum across our business and the strength of our partnerships, which continue to grow in number and impact, we are raising full year revenue and adjusted EBITDA guidance.  I'm also delighted that comScore vCE in DoubleClick is now widely available to Google DoubleClick customers. comScore vCE is the first independent audience delivery evaluation solution that is integrated directly into the DoubleClick platform.

"Beyond our work with Google and our innovation in advertising measurement, we continue to focus on solving the challenges that come with the rapid rise of cross-platform television and video audiences. In May, we launched our syndicated cross-media product, comScore XMedia. At comScore, cross-media measurement is no longer an aspiration."

Second Quarter 2015 Supplemental Financial and Business Information

(dollars in millions)

(unaudited)

Pro Forma 2Q15*

Pro Forma 2Q14*

Change

Subscription Revenue

$

83.5

$

71.4

16.9

%

Project Revenue

$

7.8

$

7.4

5.4

%

Existing Customer Revenue

$

79.8

$

72.1

10.7

%

New Customer Revenue

$

11.5

$

6.7

71.6

%

International Revenue

$

25.6

$

23.7

8.0

%

Customer Count

2,683

2,455

9.3

%

* comScore classified its Mobile Operator Analytics Division as held for sale in the fourth quarter of 2014. All year-to-date 2015 and 2014 pro forma growth rates included in the foregoing reflect adjustments to exclude the Company's Mobile Operator Analytics Division for the purposes of consistent presentation and are based on management's estimates of the revenue and results of operations of such products and divisions. See Reconciliation of Revenue and Income before Income Taxes to non-GAAP Revenue, non-GAAP Income and Adjusted EBITDA set forth in the attachment to this press release.

Financial Outlook

comScore's expectations for the third quarter of 2015 are outlined in the table below.  All amounts indicated expressly exclude the anticipated effects of comScore's Mobile Operator Analytics Division.

GAAP revenue*

$90.8 million to $95.4 million

GAAP (loss) / income before income taxes*

($1.4) million to $4.1 million

Adjusted EBITDA**

$19.5 million to $23.6 million

Estimated fully-diluted shares

40.2 million

comScore's expectations for full year 2015 are outlined in the table below. All amounts indicated expressly exclude the anticipated effects of comScore's Mobile Operator Analytics Division.

GAAP revenue*

$369.5 million to $382.5 million

GAAP (loss) / income before income taxes*

($5.9) million to $10.1 million

Adjusted EBITDA**

$86.5 million to $97.5 million

Estimated fully-diluted shares

39.1 million

*

Assumes divestiture of Mobile Operator Analytics Division during 2015

**

Reconciliations of GAAP to non-GAAP measures are set forth in the attachment to this press release.

Due to the high variability and difficulty in predicting certain items that affect GAAP net income, such as tax rates and stock price, comScore is unable to provide a complete reconciliation of adjusted EBITDA to net income (loss) on a forward-looking basis without unreasonable efforts. However, a reconciliation of forward-looking adjusted EBITDA to GAAP income (loss) before income taxes is set forth in the attachment to this press release.

Conference Call Information

Management will provide commentary on the company's results in a conference call on Tuesday, August 4th at 8:30 a.m. ET.

The conference call and replay can be accessed by telephone and webcast as follows:

Call-in Number: 844-848-8734, Pass code 73780342 (International) 678-562-4248, Pass code 73780342

Webcast (live and replay): http://ir.comscore.com/events.cfm

About comScore

Founded in 1999 and headquartered in Reston, Virginia, comScore, Inc. (NASDAQ: SCOR) is a global media measurement and analytics company that makes audiences and advertising more valuable. We help media buyers and sellers understand and make decisions based on how consumers use different media, such as TV, video, mobile, desktop and more. Through its products and partnerships, comScore helps its more than 2,500 clients understand their audiences, know if their advertising is working, and access data where they want and need it. Please visit www.comscore.com to learn more.

Non-GAAP Financial Measures

comScore reports all financial information required in accordance with generally accepted accounting principles (GAAP). comScore believes, however, that evaluating its ongoing operating results will be enhanced if it also discloses certain non-GAAP information because it is useful to understand comScore's performance, as it excludes non-cash and other charges that many investors believe may obscure comScore's on-going operating results.

For example, comScore uses non-GAAP net income, which excludes stock-based compensation, amortization of acquired intangible assets, impairment of intangible assets, impairment of marketable securities, costs from acquisitions, restructurings and other infrequently occurring  items, non-cash deferred tax provision and litigation and related settlement costs. comScore reports non-GAAP EPS (diluted), which uses non-GAAP net income in lieu of GAAP net income in calculating earnings per share. Year to date 2015 and 2014 non-GAAP pro forma revenue excludes the estimated effects of revenue generated from the Mobile Operator Analytics Division. Year to date 2015 and 2014 adjusted pro forma EBITDA also excludes the estimated effects of operations related to the mobile operator analytics division products.

The company believes that excluding certain costs from non-GAAP net income, non-GAAP EPS, and adjusted EBITDA provides a meaningful indication to investors of the expected on-going operating performance of the company. Specifically as it relates to acquisitions and restructurings, the exclusion of these costs reflects the expected benefits realized or to be realized upon the integration of acquired entities into comScore, and the realized benefits of the restructurings. In addition, the company believes that adjusting for the pro forma effect of the expected sale of the company's mobile operator analytics division promotes better comparability of the company's financial statements.

Whenever comScore uses such historical non-GAAP financial measures, it provides a reconciliation of historical non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measure included in the financial tables accompanying this release. Although the company provides a reconciliation of historical non-GAAP financial measures, due to the high variability and difficulty in predicting certain items that affect net income, such as tax rates and stock price, comScore is unable to provide a complete reconciliation of adjusted EBITDA to net income on a forward-looking basis without unreasonable efforts. However, a reconciliation of forward-looking adjusted EBITDA to GAAP income (loss) before income taxes is set forth in the attachment to this press release.

These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. The use of certain non-GAAP financial measures requires management to make estimates and assumptions regarding amounts of assets and liabilities and the amounts of revenue and expense during the reporting periods. comScore bases its estimates on historical experience and assumptions that it believes are reasonable. Actual results could differ from those estimates.

Cautionary Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, comScore's expectations as to comScore's strategy, market position, growth in revenue and margin expansion, impact and financial benefits of certain products; expectations as to new product releases and versions; expectations as to comScore's performance with respect to and the benefits of comScore's partnerships, including those with Google and WPP/Kantar; expectations regarding the strategic and financial benefits of certain strategic transactions; expectations regarding the benefits of comScore's proposed share buy-back program; expectations regarding the disposal or discontinuation of comScore's Mobile Operator operations, including the related financial effects thereof; projections regarding the effect of foreign currency; expectations and forecasts of future financial performance, including related growth rates and components thereof; and assumptions related to growth for the third quarter and full year of 2015 and beyond. These statements involve risks and uncertainties that could cause comScore's actual results to differ materially, including, but not limited to: comScore's ability to generate strong revenue and margin growth in future periods; comScore's ability to sell new or additional products and attract new customers;  comScore's ability to develop new products, including new crossmedia offerings; comScore's ability to sell additional subscription-based products to customers; comScore's ability to sell additional products and services to existing customers; comScore's ability to obtain critical data sources through strategic partnerships; and the volatility of quarterly results and expectations

For a detailed discussion of these and other risk factors, please refer to comScore's Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the three months ended June 30, 2015 and other filings comScore makes from time to time with the Securities and Exchange Commission (the "SEC"), which are available on the SEC's Web site ( http://www.sec.gov ).

Stockholders of comScore are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. comScore does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after the date of this press release, or to reflect the occurrence of unanticipated events.

 

comScore, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

(unaudited)

(unaudited)

Revenue

$

91,414

$

80,013

$

178,743

$

156,912

Cost of revenue (excludes amortization of intangible assets) (1)

28,508

23,232

53,400

46,673

Selling and marketing (1)

24,868

26,600

52,199

52,666

Research and development (1)

16,901

12,931

34,907

25,408

General and administrative (1)

14,994

14,642

39,995

27,986

Amortization of intangible assets

4,305

1,919

5,684

3,874

Loss on asset disposition

5,226

5,226

Settlement of litigation, net

(570)

2,940

(660)

2,860

Total expenses from operations

94,232

82,264

190,751

159,467

Loss from operations

(2,818)

(2,251)

(12,008)

(2,555)

Interest and other expense, net

(393)

(304)

(785)

(507)

Gain (loss) from foreign currency

469

(164)

397

(317)

Loss before income tax provision

(2,742)

(2,719)

(12,396)

(3,379)

Income tax (provision) benefit

(2,045)

(481)

284

(603)

Net loss

$

(4,787)

$

(3,200)

$

(12,112)

$

(3,982)

Net loss per common share:

Basic

$

(0.12)

$

(0.09)

$

(0.33)

$

(0.12)

Diluted

$

(0.12)

$

(0.09)

$

(0.33)

$

(0.12)

Weighted-average number of shares used in per share calculation - common stock:

Basic

40,071,707

33,688,945

36,928,323

33,601,610

Diluted

40,071,707

33,688,945

36,928,323

33,601,610

(1) Amortization of stock-based compensation is included in the line items above as follows:

Cost of revenue

$

1,115

$

1,002

$

3,324

$

1,727

Selling and marketing

$

1,887

$

3,667

$

5,634

$

6,063

Research and development

$

1,041

$

856

$

3,224

$

1,581

General and administrative

$

4,574

$

3,535

$

18,190

$

6,912

 

comScore, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)

June 30, 2015

December 31, 2014

(Unaudited)

*

Assets

Current assets:

Cash and cash equivalents

$

187,917

$

43,015

Accounts receivable, net of allowances of $2,359 and $2,079, respectively

79,893

98,185

Prepaid expenses and other current assets

18,438

11,015

Deferred tax assets

21,105

20,976

Assets held for sale

5,692

Total current assets

307,353

178,883

Property and equipment, net

45,172

42,365

Other non-current assets

992

1,017

Long-term deferred tax assets

12,124

12,369

Intangible assets, net

115,590

15,793

Goodwill

111,739

103,525

Total assets

$

592,970

$

353,952

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

6,539

$

3,421

Accrued expenses

25,057

37,212

Deferred revenue

86,326

92,013

Deferred rent

1,530

1,738

Capital lease obligations

15,274

13,353

Liabilities held for sale

3,873

Total current liabilities

134,726

151,610

Deferred rent, long-term

9,433

9,738

Deferred revenue, long-term

954

2,063

Deferred tax liabilities, long-term

1,080

1,182

Capital lease obligations, long-term

15,222

13,072

Other long-term liabilities

994

1,022

Total liabilities

162,409

178,687

Commitments and contingencies

Stockholders' equity:

Common stock

41

36

Additional paid-in capital

607,286

324,176

Accumulated other comprehensive loss

(8,848)

(5,591)

Accumulated deficit

(105,188)

(93,076)

Treasury stock

(62,730)

(50,280)

Total stockholders' equity

430,561

175,265

Total liabilities and stockholders' equity

$

592,970

$

353,952

* Information derived from the audited Consolidated Financial Statements

 

comScore, Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

Six Months Ended June 30,

2015

2014

(unaudited)

Operating activities:

Net loss

$

(12,112)

$

(3,982)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation

10,348

8,563

Amortization of intangible assets

5,684

3,874

Provision for bad debts

1,327

1,971

Stock-based compensation

30,372

16,283

Amortization of deferred rent

(920)

(525)

Deferred tax benefit

447

(1,432)

Loss (gain) on asset disposition

5,226

(55)

Changes in operating assets and liabilities:

Accounts receivable

16,044

1,200

Prepaid expenses and other current assets

(7,959)

(12,164)

Accounts payable, accrued expenses, and other liabilities

(4,361)

10,281

Deferred revenue

(4,011)

4,290

Deferred rent

426

36

Net cash provided by operating activities

40,511

28,340

Investing activities:

Acquisitions, net of cash acquired

(10,117)

Purchase of property and equipment

(2,483)

(4,691)

Cash paid for disposition of business

(2,035)

Net cash used in investing activities

(14,635)

(4,691)

Financing activities:

Proceeds from the issuance of common stock

204,741

Proceeds from the exercise of common stock options

11,619

20

Repurchase of common stock (withholding taxes)

(24,289)

(12,132)

Repurchase of common stock (treasury shares)

(59,968)

(36,292)

Excess tax benefits from stock-based compensation

1,181

Principal payments on capital lease obligations

(8,633)

(5,573)

Equity issuance costs

(3,356)

Net cash provided by (used in) financing activities

120,114

(52,796)

Effect of exchange rate changes on cash

(1,088)

354

Net increase (decrease) in cash and cash equivalents

144,902

(28,793)

Cash and cash equivalents at beginning of period

43,015

67,795

Cash and cash equivalents at end of period

$

187,917

$

39,002

 

Reconciliation of Revenue and Income before Income Taxes to Non-GAAP Revenue, Non-GAAP Net Income and Adjusted EBITDA

(dollars in thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

 (unaudited)

 (unaudited)

Revenue

$

91,414

$

80,013

$

178,743

$

156,912

Adjustment to exclude Mobile Operator Analytics products

$

(156)

$

(1,209)

$

(401)

$

(2,137)

Non-GAAP Revenue (1)

$

91,258

$

78,804

$

178,342

$

154,775

Loss before income taxes

$

(2,742)

$

(2,719)

$

(12,396)

$

(3,379)

Deferred tax benefit (provision)

$

68

$

1,177

(447)

1,432

Current tax (provision) benefit

(2,113)

(1,658)

731

(2,035)

Net loss

(4,787)

(3,200)

(12,112)

(3,982)

Amortization of intangible assets

4,305

1,919

5,684

3,874

Stock-based compensation

8,617

9,060

30,372

16,283

Costs related to acquisitions, restructuring and other infrequently occurring items

1,775

825

3,180

3,436

Settlement of litigation, net

(570)

2,940

(660)

2,860

Loss on asset disposition

5,226

5,226

Adjustment to exclude Mobile Operator Analytics products

533

876

1,631

2,471

Non-cash portion of current tax provision related to excess tax benefits from stock based compensation (2)

916

1,181

Deferred tax (benefit) provision

(68)

(1,177)

447

(1,432)

Non-GAAP net income (1)

15,031

12,159

33,768

24,691

Current tax provision (benefit)

2,113

742

(731)

854

Depreciation

5,338

4,380

10,348

8,563

Interest and other expense, net

393

304

785

507

Adjusted EBITDA (1)

$

22,875

$

17,585

$

44,170

$

34,615

Adjusted EBITDA margin (%)

25

%

22

%

25

%

22

%

GAAP EPS (diluted)

$

(0.12)

$

(0.09)

$

(0.33)

$

(0.12)

Non-GAAP EPS (diluted)

$

0.37

$

0.35

$

0.89

$

0.71

Weighted - average number of shares used in per share calculation - common stock

GAAP EPS (diluted)

40,071,707

33,688,945

36,928,323

33,601,610

Non-GAAP EPS (diluted)

40,932,160

34,641,555

37,888,009

34,764,377

(1) comScore classified its Mobile Operator Analytics Division as held for sale in the fourth quarter of 2014. All year-to-date 2015 and 2014 amounts include adjustments to exclude the Mobile Operator Analytics Division and are based on management's estimates of the revenue and results of operations of the aforementioned division.

(2) Included in the tax provision for the three and six months ended June 30, 2014 was $0.9 million and $1.2 million, respectively, of non-cash current tax expense related to excess tax benefits from stock based compensation.

 

Reconciliation of GAAP Operating Cash Flow to Free Cash Flow

(dollars in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

(unaudited)

(unaudited)

Net cash provided by operating activities

$

12,648

$

8,965

$

40,511

$

28,340

Purchase of property and equipment

(1,081)

(2,818)

(2,483)

(4,691)

Free cash flow

$

11,567

$

6,147

$

38,028

$

23,649

 

Revenue and Reconciliation of Income before Income Taxes to Adjusted EBITDA (Guidance)

(dollars in thousands)

Forecasted amounts for the three and twelve month periods ending September 30, 2015 and December 31, 2015 are based on the mid-points of the range of guidance provided herein (1)

Three Months Ended September 30,

Full Year December 31,

2015 (1)

2014 (1)

2015 (1)

2014 (1)

(unaudited)

(unaudited)

Revenue

$

93,100

$

81,260

$

376,000

$

325,150

Income before income taxes

1,360

2,790

2,124

1,120

Amortization of intangible assets

4,239

1,481

14,080

5,937

Stock-based compensation

8,955

10,074

48,273

41,677

Costs related to acquisitions, restructuring and other infrequently occurring items

1,091

997

4,963

5,584

Settlement of litigation, net

(90)

(80)

(840)

2,700

Depreciation

5,600

4,524

21,700

17,599

Interest and other expense, net

395

381

1,700

1,241

Adjusted EBITDA

$

21,550

$

20,167

$

92,000

$

75,858

Adjusted EBITDA margin (%)

23

%

25

%

24

%

23

%

Estimated Q3 2015 and full year 2015 non-GAAP (Diluted) share count is 40.2 million and 39.1 million, respectively.

(1) The three and twelve month periods ending September 30, 2015 and 2014 and December 31, 2015 and 2014, respectively, have been adjusted to exclude the results of operations from the Mobile Operator Analytics Division.

 

GAAP pre-tax Reconciliation of Revenue and Adjusted EBITDA to Pro Forma Revenue and Pro Forma Adjusted EBITDA (Guidance) (1)

(dollars in thousands)

Three Months Ended September 30,

2015

2014

(unaudited)

Pre-Adjusted

Adjustment to Exclude Mobile Operator Analytics Division

Pro Forma

As Reported

Adjustment to Exclude Mobile Operator Analytics Division (1)

Pro Forma

Revenue

$

93,100

$

93,100

$

82,136

(876)

$

81,260

Adjusted EBITDA(2)

$

21,550

$

21,550

$

19,118

1,049

$

20,167

Adjusted EBITDA margin (%)

23

%

%

23

%

23

%

(120)

%

25

%

Twelve Months Ended December 31,

2015

2014

(unaudited)

Pre-Adjusted

Adjustment to Exclude Mobile Operator Analytics Division (1)

Pro Forma

Pre-Adjusted

Adjustment to Exclude Mobile Operator Analytics Division (1)

Pro Forma

Revenue

$

375,599

401

$

376,000

$

329,151

(4,001)

$

325,150

Adjusted EBITDA(2)

$

87,679

4,321

$

92,000

$

71,221

4,637

$

75,858

Adjusted EBITDA margin (%)

23

%

1,078

%

24

%

22

%

(116)

%

23

 

%

(1) Pro forma revenue and pro forma Adjusted EBTIDA are adjusted to exclude the company's Mobile Operator Analytics Division.

(2) See reconciliation of Adjusted EBITDA.

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SOURCE comScore, Inc.



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