ShareNEW HOPE, Pa.–(BUSINESS WIRE)–
The Meet Group, Inc. (NASDAQ: MEET), a public market leader in the
mobile meeting space, today reported financial results for its first
quarter ended March 31, 2018.
First Quarter 2018 Financial Highlights
- Total revenue of $37.6 million, up 88% year over year
- Mobile revenue of $30.7 million, up 63% year over year
-
GAAP net loss of $4.2 million, or a net loss of $0.06 per share,
compared to GAAP net income of $0.4 million, or $0.01 per diluted
share, in the prior year quarter - Adjusted EBITDA of $5.2 million, up 9% year over year
-
Non-GAAP net income of $4.1 million, or $0.05 per diluted share,
compared to $4.3 million or $0.07 per diluted share in the prior year
quarter
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct comparable
GAAP financial measure, below.)
“We are off to a strong start to the year, with growth from live video
monetization accelerating at an even faster pace than we had
anticipated,” said Geoff Cook, Chief Executive Officer of The Meet
Group. “Video revenue grew approximately 120% from December 2017 to
March 2018, which we attribute to momentum on our MeetMe app, the launch
of livestreaming monetization on Skout, and our focus on strengthening
our livestreaming community and the quality of our livestreams. Our
annualized video revenue run rate now exceeds $29 million based on
April’s results, up 53% from February’s run rate.
“Key video metrics are improving, and we are setting new highs on a
regular basis,” continued Cook. “We have been particularly pleased to
see average revenue per paying video user grow to $76 for the month of
March on MeetMe Live. Average revenue per daily active user for MeetMe
Live, or vARPDAU, in the United States increased to 44 cents in March
and is now nearing levels achieved by leading livestreaming companies in
Asia. Total vARPDAU, which includes Skout and MeetMe, was 18 cents in
March. Importantly, the percentage of MeetMe users engaged in video
exceeded 25% for the first time in April.
“We are continuing to video-enable more of our large, global community
and build our social entertainment platform. Having recently rolled-out
our shared livestreaming platform on Tagged, we are pleased to announce
that we have launched enhanced video monetization on that app, ahead of
schedule. We expect to begin launching live video on Lovoo later this
month, starting with Austria. We expect our rollout of live video to
more of our users, combined with our deep product pipeline, to
contribute to continued growth in video revenue.”
First Quarter 2018 Financial Results
For the first quarter of 2018, The Meet Group reported revenue of $37.6
million, an increase of 88% from $20.1 million in the prior year
quarter. GAAP net loss was $4.2 million, or a net loss of $0.06 per
share, compared to net income of $0.4 million, or $0.01 per diluted
share in the prior year quarter. Adjusted EBITDA in the first quarter of
2018 was $5.2 million compared to $4.8 million in the prior year quarter.
The Company ended the quarter with $28.0 million in cash and cash
equivalents. Cash flow from operating activities was $7.4 million.
Company Outlook
The Company is providing the following outlook for the second quarter of
2018 and is increasing its outlook for the full year 2018.
Second quarter 2018:
- Revenue in the range of $38.0 million to $39.0 million
- Adjusted EBITDA in the range of $5.3 million to $5.6 million
Full year 2018:
- Revenue in the range of $152.0 million to $155.0 million
- Adjusted EBITDA in the range of $21.5 million to $23.5 million
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (UNAUDITED) | ||||||||
|
March 31, |
December 31, |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 27,969,456 | $ | 24,158,444 | ||||
|
Accounts receivable, net of allowance of $519,306 and $527,958 at March 31, 2018 and December 31, 2017, respectively |
20,365,174 | 26,443,675 | ||||||
| Prepaid expenses and other current assets | 3,417,675 | 3,245,174 | ||||||
| Total current assets | 51,752,305 | 53,847,293 | ||||||
| Restricted cash | 500,000 | 894,551 | ||||||
| Goodwill | 152,185,979 | 150,694,135 | ||||||
| Property and equipment, net | 4,149,034 | 4,524,118 | ||||||
| Intangible assets, net | 46,094,182 | 48,719,428 | ||||||
| Deferred taxes | 16,007,054 | 15,521,214 | ||||||
| Other assets | 1,863,590 | 1,144,032 | ||||||
| Total assets | $ | 272,552,144 | $ | 275,344,771 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 4,666,271 | $ | 6,277,846 | ||||
| Accrued liabilities | 21,868,691 | 19,866,438 | ||||||
| Current portion of long-term debt | 15,000,000 | 15,000,000 | ||||||
| Current portion of capital lease obligations | 227,678 | 254,399 | ||||||
| Deferred revenue | 5,225,506 | 4,433,450 | ||||||
| Total current liabilities | 46,988,146 | 45,832,133 | ||||||
| Long-term capital lease obligations, less current portion, net | 157,365 | 192,137 | ||||||
| Long-term debt | 36,973,633 | 40,637,106 | ||||||
| Long-term derivative liability | 4,512,878 | 2,995,657 | ||||||
| Other liabilities | 114,051 | 147,178 | ||||||
| Total liabilities | 88,746,073 | 89,804,211 | ||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
|
Preferred stock, $.001 par value; authorized – 5,000,000 shares; 0 shares issued and outstanding at March 31, 2018 and December 31, 2017 |
— | — | ||||||
|
Common stock, $.001 par value; authorized – 100,000,000 shares; 72,106,997 and 71,915,018 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively |
72,104 | 71,918 | ||||||
| Additional paid-in capital | 410,105,207 | 408,029,068 | ||||||
| Accumulated deficit | (225,632,074 | ) | (221,435,888 | ) | ||||
| Accumulated other comprehensive loss | (739,166 | ) | (1,124,538 | ) | ||||
| Total stockholders’ equity | 183,806,071 | 185,540,560 | ||||||
| Total liabilities and stockholders’ equity | $ | 272,552,144 | $ | 275,344,771 | ||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (UNAUDITED) | ||||||||
|
Three Months Ended |
||||||||
| 2018 | 2017 | |||||||
| Revenues | $ | 37,637,793 | $ | 20,058,797 | ||||
| Operating costs and expenses: | ||||||||
| Sales and marketing | 7,047,993 | 5,105,508 | ||||||
| Product development and content | 22,101,537 | 8,457,494 | ||||||
| General and administrative | 5,469,178 | 2,862,427 | ||||||
| Depreciation and amortization | 3,629,603 | 1,684,839 | ||||||
| Acquisition and restructuring | 3,349,951 | 1,500,429 | ||||||
| Total operating costs and expenses | 41,598,262 | 19,610,697 | ||||||
| (Loss) income from operations | (3,960,469 | ) | 448,100 | |||||
| Other income (expense): | ||||||||
| Interest income | 7,208 | 2,570 | ||||||
| Interest expense | (607,686 | ) | (2,332 | ) | ||||
| Gain (loss) on foreign currency transactions | 103,043 | (2,200 | ) | |||||
| Other | (6,944 | ) | — | |||||
| Total other expense | (504,379 | ) | (1,962 | ) | ||||
| (Loss) income before income tax benefit (expense) | (4,464,848 | ) | 446,138 | |||||
| Income tax benefit (expense) | 252,187 | (292 | ) | |||||
| Net (loss) income | $ | (4,212,661 | ) | $ | 445,846 | |||
| Basic and diluted net (loss) income per common stockholder: | ||||||||
| Basic net (loss) income per common stockholder | $ | (0.06 | ) | $ | 0.01 | |||
| Diluted net (loss) income per common stockholder | $ | (0.06 | ) | $ | 0.01 | |||
| Weighted average shares outstanding: | ||||||||
| Basic | 71,981,487 | 61,093,810 | ||||||
| Diluted | 71,981,487 | 66,204,620 | ||||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (UNAUDITED) | ||||||||
|
Three Months Ended |
||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (4,212,661 | ) | $ | 445,846 | |||
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization | 3,629,603 | 1,684,839 | ||||||
| Stock based compensation expense | 2,168,925 | 1,134,158 | ||||||
| Deferred taxes | (539,231 | ) | (17,465 | ) | ||||
| (Gain) loss on foreign currency transactions | (103,043 | ) | 2,200 | |||||
| Bad debt expense (recovery) | 213,598 | (27,000 | ) | |||||
| Amortization of loan origination costs | 86,527 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 5,988,039 | 7,942,814 | ||||||
| Prepaid expenses, other current assets and other assets | (793,908 | ) | 97,899 | |||||
| Accounts payable and accrued liabilities | 273,716 | (2,577,771 | ) | |||||
| Deferred revenue | 723,907 | 2,359 | ||||||
| Net cash provided by operating activities | 7,435,472 | 8,687,879 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (172,642 | ) | (150,510 | ) | ||||
| Net cash used in investing activities | (172,642 | ) | (150,510 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | — | 764,547 | ||||||
| Proceeds from issuance of common stock | — | 43,000,424 | ||||||
| Proceeds from exercise of warrants | — | 443,750 | ||||||
| Payments of capital leases | (73,317 | ) | (69,817 | ) | ||||
| Payments for restricted stock awards withheld for taxes | (92,600 | ) | — | |||||
| Payments on long-term debt | (3,750,000 | ) | — | |||||
| Net cash (used in) provided by financing activities | (3,915,917 | ) | 44,138,904 | |||||
|
Change in cash, cash equivalents, and restricted cash prior to effects of foreign currency exchange rate |
3,346,913 | 52,676,273 | ||||||
| Effect of foreign currency exchange rate (translation) | 69,548 | (2,200 | ) | |||||
| Net increase in cash, cash equivalents, and restricted cash | 3,416,461 | 52,674,073 | ||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 25,052,995 | 22,246,015 | ||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 28,469,456 | $ | 74,920,088 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 516,940 | $ | 2,332 | ||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | |||||||
| RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | |||||||
| (UNAUDITED) | |||||||
|
Three Months Ended |
|||||||
| 2018 | 2017 | ||||||
| Net (loss) income | $ | (4,212,661 | ) | $ | 445,846 | ||
| Interest expense | 607,686 | 2,332 | |||||
| Income tax (benefit) expense | (252,187 | ) | 292 | ||||
| Depreciation and amortization | 3,629,603 | 1,684,839 | |||||
| Stock-based compensation expense | 2,168,925 | 1,134,158 | |||||
| Acquisition and restructuring | 3,349,951 | 1,500,429 | |||||
| (Gain) loss on foreign currency transactions | (103,043 | ) | 2,200 | ||||
| Adjusted EBITDA | $ | 5,188,274 | $ | 4,770,096 | |||
| GAAP basic net (loss) income per common stockholder | $ | (0.06 | ) | $ | 0.01 | ||
| GAAP diluted net (loss) income per common stockholder | $ | (0.06 | ) | $ | 0.01 | ||
| Basic adjusted EBITDA per common stockholder | $ | 0.07 | $ | 0.08 | |||
| Diluted adjusted EBITDA per common stockholder | $ | 0.07 | $ | 0.07 | |||
| Weighted average shares outstanding: | |||||||
| Basic | 71,981,487 | 61,093,810 | |||||
| Diluted | 75,849,484 | 66,204,620 | |||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | |||||||
| RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME | |||||||
| (UNAUDITED) | |||||||
|
Three Months Ended |
|||||||
| 2018 | 2017 | ||||||
| GAAP Net (loss) income | $ | (4,212,661 | ) | $ | 445,846 | ||
| Stock-based compensation expense | 2,168,925 | 1,134,158 | |||||
| Amortization of intangibles | 3,056,609 | 1,226,155 | |||||
| Income tax (benefit) expense | (252,187 | ) | 292 | ||||
| Acquisition and restructuring | 3,349,951 | 1,500,429 | |||||
| Non-GAAP net income | $ | 4,110,637 | $ | 4,306,880 | |||
| GAAP basic net (loss) income per common stockholder | $ | (0.06 | ) | $ | 0.01 | ||
| GAAP diluted net (loss) income per common stockholder | $ | (0.06 | ) | $ | 0.01 | ||
| Basic Non-GAAP net income per common stockholder | $ | 0.06 | $ | 0.07 | |||
| Diluted Non-GAAP net income per common stockholder | $ | 0.05 | $ | 0.07 | |||
| Weighted average shares outstanding: | |||||||
| Basic | 71,981,487 | 61,093,810 | |||||
| Diluted | 75,849,484 | 66,204,620 | |||||
Webcast and Conference Call Details
Management will host a webcast and conference call to discuss first
quarter 2018 financial results today, May 2, 2018 at 4:30 p.m. Eastern
time. To access the call dial 866-572-9351 (US and Canada) or
703-736-7482 (International) and when prompted provide the participant
passcode 5377109 to the operator. An audio replay will be available at
855-859-2056 domestically or 404-537-3406 internationally, using
passcode 5377109 through May 9, 2018. In addition, a webcast of the
conference call will be available live on the Investor Relations section
of the Company’s website at www.themeetgroup.com
and a replay of the webcast will be available for 90 days.
About The Meet Group
The Meet Group (NASDAQ: MEET) is a portfolio of mobile social
entertainment apps designed to meet the universal need for human
connection. We leverage a powerful live-streaming video platform,
empowering our global community to forge meaningful connections. Our
primary apps, MeetMe®, LOVOO®, Skout®, and Tagged®, keep millions of
mobile daily active users entertained and engaged and originate untold
numbers of casual chats, friendships, dates, and marriages. Our apps,
available on iPhone, iPad, and Android in multiple languages, use
innovative products and sophisticated data science to let our users
stream live video, send gifts, chat, and share photos. The Meet Group
has a diversified revenue mix consisting of in-app purchases,
subscription, and advertising, and we have offices in New Hope,
Philadelphia, San Francisco, Dresden, and Berlin. For more information,
visit themeetgroup.com,
and follow us on Facebook, Twitter or LinkedIn.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, including whether second quarter 2018 revenue and Adjusted EBITDA
will be in the projected range, whether video growth will continue as
expected, whether average revenue per paying video user and average
revenue per daily active user will continue to grow as expected, whether
user engagement in video will continue to increase, whether and when we
will launch live video on our Lovoo app and whether the rollout of video
to more of our users combined with our deep product pipeline will
contribute to continued growth in video revenue. All statements other
than statements of historical facts contained herein are forward-looking
statements. The words “believe,” “may,” “estimate,” “continue,”
“anticipate,” “intend,” “should,” “plan,” “could,” “target,”
“potential,” “project,” “is likely,” “expect” and similar expressions,
as they relate to us, are intended to identify forward-looking
statements. We have based these forward-looking statements largely on
our current expectations and projections about future events and
financial trends that we believe may affect our financial condition,
results of operations, business strategy and financial needs. Important
factors that could cause actual results to differ from those in the
forward-looking statements include the risk that our applications will
not function easily or otherwise as anticipated, the risk that we will
not launch additional features and upgrades as anticipated, the risk
that unanticipated events affect the functionality of our applications
with popular mobile operating systems, any changes in such operating
systems that degrade our mobile applications’ functionality and other
unexpected issues which could adversely affect usage on mobile devices.
Further information on our risk factors is contained in our filings with
the Securities and Exchange Commission (“SEC”), including the Form 10-K
for the year ended December 31, 2017 filed with the SEC on March 16,
2018. Any forward-looking statement made by us herein speaks only as of
the date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is not
possible for us to predict all of them. We undertake no obligation to
publicly update any forward-looking statement, whether as a result of
new information, future developments or otherwise, except as may be
required by law.
Regulation G – Non-GAAP Measures
The Company defines mobile traffic and engagement metrics (including
MAU, DAU, chats per day, and new users per day) to include mobile app
traffic for all properties and mobile web traffic for MeetMe, Skout and
Lovoo.
The Company uses Adjusted EBITDA and Non-GAAP Net Income, which are not
calculated and presented in accordance with U.S. generally accepted
accounting principles (“GAAP”), in evaluating its financial and
operational decision making and as a means to evaluate period-to period
comparison. The Company uses these non-GAAP financial measures for
financial and operational decision-making and as a means to evaluate
period-to-period comparisons. The Company presents these non-GAAP
financial measures because it believes them to be an important
supplemental measure of performance that is commonly used by securities
analysts, investors and other interested parties in the evaluation of
companies in our industry. We refer you to the reconciliations below.
The Company defines Adjusted EBITDA as earnings (or loss) from
operations before interest expense, benefit or provision for income
taxes, depreciation and amortization, stock-based compensation, warrant
obligations, non-recurring acquisition, restructuring or other expenses,
gain or loss on cumulative foreign currency translation adjustment, gain
on sale of asset, bad debt expense outside the normal range, and
goodwill and long-lived asset impairment charges. The Company excludes
stock-based compensation because it is non-cash in nature. The Company
defines Non-GAAP Net Income as earnings (or loss) before benefit or
provision for income taxes, amortization of intangibles, goodwill and
long-lived asset impairment charges, non-recurring acquisition and
restructuring costs, bad debt expense outside the normal range and
non-cash stock based compensation.
Non-GAAP financial measures should not be considered as an alternative
to net income, operating income, cash flow from operating activities, as
a measure of liquidity or any other financial measure. They may not be
indicative of the historical operating results of the Company nor is it
intended to be predictive of potential future results. Investors should
not consider non-GAAP financial measures in isolation or as a substitute
for performance measures calculated in accordance with GAAP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180502006383/en/
The Meet Group, Inc.
Investor Contact:
Leslie Arena,
267-714-6418
larena@themeetgroup.com
or
Media
Contact:
Brandyn Bissinger, 267-446-7010
bbissinger@themeetgroup.com
Source: The Meet Group, Inc.