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 second
quarter ended June 30, 2017.
Second Quarter 2017 Financial Highlights
- Total revenue of $31.3 million, up 91% year over year.
- Mobile revenue of $23.3 million, up 55% year over year.
-
Adjusted EBITDA of $7.4 million, up 23% year over year, or a 24%
margin. -
GAAP net income of $0.9 million, or $0.01 per diluted share. This
compares to net income of $29.6 million, or $0.55 per diluted share,
in the second quarter of 2016, which included a one-time deferred tax
benefit of $27.3 million. -
Non-GAAP net income increased 37% year over year to $6.6 million, or
$0.09 per diluted share. - Cash and Cash Equivalents totaled $32.3 million at June 30, 2017.
(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 excited to have closed the acquisition of Ifwe Inc. during the
quarter, adding the Tagged and Hi5 mobile apps to our portfolio. We are
also thrilled to have completed the launch of livestreaming video on
MeetMe. Since the time of our Q1 earnings announcement in May, we have
increased daily video minutes 80% to 7.2 million, with more than 20% of
our users watching videos every day. We expect to fully launch
livestreaming video on Tagged and Skout by the end of this quarter,
which we believe will lead to further gains in video engagement.”
“What’s more, given our users’ rapid adoption of video and our
accelerating engagement metrics associated with that, we believe we are
well positioned to take advantage of the high demand for video
advertising inventory and that video reflects a substantial monetization
opportunity. We plan to move swiftly to monetize our video feature. By
the end of this quarter, we expect to launch new banner and native
advertising units within the video experience itself. We also intend to
launch gifting inside of video, which we expect to increase our in-app
purchase revenue. Gifting has proven to be a powerful engine for
monetization on several livestreaming apps, including Momo in China and
Live.me and Live.ly in the US. We believe our users are well suited to
the gifting mechanic, and it is the number one most requested feature
among our broadcasters. We look forward to launching it within the
coming weeks.”
David Clark, Chief Financial Officer of The Meet Group, added, “Our
mobile revenue growth of 55% year over year reflects increases in our
mobile impressions through the acquisitions of Ifwe Inc. and Skout, Inc.
Adjusted EBITDA increased 23% to $7.4 million for the quarter,
representing a 24% adjusted EBITDA margin. We generated $8.0 million in
cash from operations, ending the quarter with $32.3 million cash and
cash equivalents.
Company Outlook:
The Company expects the following outlook for the third quarter 2017:
-
Revenue in the range of $32 million to $34 million, representing 86 to
98 percent growth -
Adjusted EBITDA in the range of $7.5 million to $9.5 million,
representing 9 to 39 percent growth
The Company has updated its outlook for the full year 2017:
-
Revenue in the range of $121 to $126, representing 50 to 66 percent
growth -
Adjusted EBITDA in the range of $32 million to $37 million,
representing 9 to 26 percent growth
David Clark commented: “In our outlook, we have incorporated what we
consider a conservative view on advertising rates reflecting our recent
experience as industry supply growth has been increasing at a faster
pace than demand. We intend to begin monetizing our substantial video
asset within the coming weeks while accelerating the rollout of
higher-end native units across the portfolio, and we believe these
efforts will put us back on the path to rising ARPU.”
Webcast and Conference Call Details
Management will host a webcast and conference call to discuss second
quarter 2017 financial results today, August 3, 2017 at 4:30 p.m.
Eastern time. To access the call dial 888-283-6901 (US and Canada) or +1
719-325-2349 (International) and when prompted provide the participant
passcode 4820998 to the operator. 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 fast-growing portfolio of mobile apps
designed to meet the universal need for human connection. Using
innovative products and sophisticated data science, The Meet Group keeps
its approximately 2.8 million mobile daily active users engaged and
originates untold numbers of casual chats, friendships, dates, and
marriages. The Meet Group offers advertisers the opportunity to reach
customers on a global scale with hundreds of millions of daily mobile ad
impressions. The Meet Group utilizes high user density, economies of
scale, and leading monetization strategies with the goal of maximizing
adjusted EBITDA. Our apps – currently MeetMe®, Skout®, Tagged®, and Hi5®
– let users in more than 100 countries chat, share photos, stream live
video, and discuss topics of interest, and are available
on iPhone, iPad, and Android in multiple languages. For more
information, please visit http://www.themeetgroup.com.
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 our total revenue and mobile revenue will
continue to grow, whether our adjusted EBITDA will continue to grow,
whether and when we will fully launch livestreaming video on Tagged and
Skout, whether the launch of livestreaming video on Tagged and Skout
will lead to further gains in video engagement, whether we are well
positioned to take advantage of the high demand for video advertising
inventory and video reflects a substantial monetization opportunity,
whether we will move swiftly to monetize our video feature, whether and
when we will launch new banner and native advertising units within the
video experience, whether and when we will launch gifting inside of our
video feature, whether our users are well suited to the gifting
mechanic, whether we will meet our third quarter and year end revenue
and adjusted EBITDA guidance, and whether the monetization of our video
asset and acceleration the rollout of higher-end native units across our
portfolio will put us back on the path to rising ARPU. 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, 2016 filed with the SEC on March 9, 2017
and our Quarterly Report on Form 10-Q for the quarter ended March 31,
2017 filed with the SEC on May 10, 2017. 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 and Skout.
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, 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.
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (UNAUDITED) | ||||||||
|
June 30, |
December 31, |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 32,252,734 | $ | 21,852,531 | ||||
|
Accounts receivable, net of allowance of $309,000 and $283,000, at June 30, 2017 and December 31, 2016, respectively |
20,810,796 | 23,737,254 | ||||||
| Prepaid expenses and other current assets | 5,353,355 | 1,489,267 | ||||||
| Total current assets | 58,416,885 | 47,079,052 | ||||||
| Restricted Cash | 894,057 | 393,484 | ||||||
| Goodwill | 150,088,783 | 114,175,554 | ||||||
| Property and equipment, net | 3,491,539 | 2,466,110 | ||||||
| Intangible assets, net | 37,236,258 | 17,010,565 | ||||||
| Deferred taxes | 27,562,319 | 28,253,827 | ||||||
| Other assets | 584,292 | 110,892 | ||||||
| Total assets | $ | 278,274,133 | $ | 209,489,484 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 3,552,147 | $ | 5,350,336 | ||||
| Accrued liabilities | 12,770,565 | 8,395,060 | ||||||
| Current portion of long-term debt | 7,500,000 | |||||||
| Current portion of capital lease obligations | 81,761 | 221,302 | ||||||
| Deferred revenue | 1,188,881 | 434,197 | ||||||
| Total current liabilities | 25,093,354 | 14,400,895 | ||||||
| Long-term debt | 5,625,000 | – | ||||||
| Total liabilities | 30,718,354 | 14,400,895 | ||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
|
Preferred stock, $.001 par value; authorized – 5,000,000 Shares at June 30, 2017 and December 31, 2016; 0 shares issued and outstanding at June 30, 2017 and December 31, 2016 |
– | – | ||||||
|
Common stock, $.001 par value; authorized – 100,000,000 Shares; 71,794,766 and 58,945,607 issued and outstanding at June 30, 2017 and December 31, 2016, respectively |
71,798 | 58,949 | ||||||
| Additional paid-in capital | 403,025,701 | 351,873,801 | ||||||
| Accumulated deficit | (155,541,720 | ) | (156,844,161 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 247,555,779 | 195,088,589 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 278,274,133 | $ | 209,489,484 | ||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues | $ | 31,329,468 | $ | 16,388,991 | $ | 51,388,265 | $ | 29,710,662 | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Sales and marketing | 4,599,842 | 3,226,344 | 9,705,350 | 5,547,767 | ||||||||||||
| Product development and content | 16,526,905 | 6,214,062 | 24,984,399 | 11,922,162 | ||||||||||||
| General and administrative | 5,160,799 | 1,867,590 | 8,023,226 | 4,215,758 | ||||||||||||
| Depreciation and amortization | 2,965,175 | 753,918 | 4,650,014 | 1,505,182 | ||||||||||||
| Acquisition and restructuring | 3,769,425 | 1,160,349 | 5,269,854 | 1,160,349 | ||||||||||||
| Total operating costs and expenses | 33,022,146 | 13,222,263 | 52,632,843 | 24,351,218 | ||||||||||||
| (Loss) income from operations | (1,692,678 | ) | 3,166,728 | (1,244,578 | ) | 5,359,444 | ||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 1,400 | 6,447 | 3,970 | 11,562 | ||||||||||||
| Interest expense | (175,254 | ) | (5,360 | ) | (177,586 | ) | (12,105 | ) | ||||||||
| Change in warrant liability | – | (787,391 | ) | – | (545,614 | ) | ||||||||||
| (Loss) gain on foreign currency adjustment | (9,229 | ) | 18,201 | (11,429 | ) | 34,553 | ||||||||||
| Total other expense | (183,083 | ) | (768,103 | ) | (185,045 | ) | (511,604 | ) | ||||||||
| (Loss) income before income taxes | (1,875,761 | ) | 2,398,625 | (1,429,623 | ) | 4,847,840 | ||||||||||
| Benefit from income taxes | 2,732,356 | 27,219,764 | 2,732,064 | 27,125,446 | ||||||||||||
| Net income | $ | 856,595 | $ | 29,618,389 | $ | 1,302,441 | $ | 31,973,286 | ||||||||
| Basic and diluted net income per common stockholders: | ||||||||||||||||
| Basic net income per common stockholders | $ | 0.01 | $ | 0.61 | $ | 0.02 | $ | 0.67 | ||||||||
| Diluted net income per common stockholders | $ | 0.01 | $ | 0.55 | $ | 0.02 | $ | 0.59 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 70,122,234 | 48,218,184 | 65,632,962 | 47,838,466 | ||||||||||||
| Diluted | 74,885,903 | 54,061,306 | 70,569,243 | 53,863,966 | ||||||||||||
| Comprehensive income | $ | 856,595 | $ | 29,618,389 | $ | 1,302,441 | $ | 31,973,286 | ||||||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
| RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net income | $ | 856,595 | $ | 29,618,389 | $ | 1,302,441 | $ | 31,973,286 | ||||||||
| Interest expense | 175,254 | 5,360 | 177,586 | 12,105 | ||||||||||||
| Change in warrant liability | – | 787,391 | – | 545,614 | ||||||||||||
| Benefit from income taxes | (2,732,356 | ) | (27,219,764 | ) | (2,732,064 | ) | (27,125,446 | ) | ||||||||
| Depreciation and amortization | 2,965,175 | 753,918 | 4,650,014 | 1,505,182 | ||||||||||||
| Stock-based compensation expense | 2,368,192 | 915,572 | 3,502,350 | 1,643,352 | ||||||||||||
| Acquisition and restructuring | 3,769,425 | 1,160,349 | 5,269,854 | 1,160,349 | ||||||||||||
| Loss (gain) on foreign currency adjustment | 9,229 | (18,201 | ) | 11,429 | (34,553 | ) | ||||||||||
| Adjusted EBITDA | $ | 7,411,514 | $ | 6,003,014 | $ | 12,181,610 | $ | 9,679,889 | ||||||||
| GAAP basic net income per common stockholders | $ | 0.01 | $ | 0.61 | $ | 0.02 | $ | 0.67 | ||||||||
| GAAP diluted net income per common stockholders | $ | 0.01 | $ | 0.55 | $ | 0.02 | $ | 0.59 | ||||||||
| Basic adjusted EBITDA per common stockholders | $ | 0.11 | $ | 0.12 | $ | 0.19 | $ | 0.20 | ||||||||
| Diluted adjusted EBITDA per common stockholders | $ | 0.10 | $ | 0.11 | $ | 0.17 | $ | 0.18 | ||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 70,122,234 | 48,218,184 | 65,632,962 | 47,838,466 | ||||||||||||
| Diluted | 74,885,903 | 54,061,306 | 70,569,243 | 53,863,966 | ||||||||||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
| RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| GAAP Net Income | $ | 856,595 | $ | 29,618,389 | $ | 1,302,441 | $ | 31,973,286 | ||||||||
| Stock-based compensation expense | 2,368,192 | 915,572 | 3,502,350 | 1,643,352 | ||||||||||||
| Amortization of intangibles | 2,378,152 | 381,916 | 3,604,307 | 760,666 | ||||||||||||
| Benefit from income taxes | (2,732,356 | ) | (27,219,764 | ) | (2,732,064 | ) | (27,125,446 | ) | ||||||||
| Acquisition and restructuring | 3,769,425 | 1,160,349 | 5,269,854 | 1,160,349 | ||||||||||||
| Non-GAAP net Income | $ | 6,640,008 | $ | 4,856,462 | $ | 10,946,888 | $ | 8,412,207 | ||||||||
| GAAP basic net income per common stockholder | $ | 0.01 | $ | 0.61 | $ | 0.02 | $ | 0.67 | ||||||||
| GAAP diluted net income per common stockholder | $ | 0.01 | $ | 0.55 | $ | 0.02 | $ | 0.59 | ||||||||
| Basic Non-GAAP net income per common stockholder | $ | 0.09 | $ | 0.10 | $ | 0.17 | $ | 0.18 | ||||||||
| Diluted Non-GAAP net income per common stockholder | $ | 0.09 | $ | 0.09 | $ | 0.16 | $ | 0.16 | ||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 70,122,234 | 48,218,184 | 65,632,962 | 47,838,466 | ||||||||||||
| Diluted | 74,885,903 | 54,061,306 | 70,569,243 | 53,863,966 | ||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170803006283/en/
Investor Contact:
The Blueshirt Group
Allise Furlani or
Brinlea Johnson, 212-331-8433
IR@Themeetgroup.com
Source: The Meet Group, Inc.