Marin Software Incorporated (NASDAQ: MRIN) (“Marin”, “Marin
Software” or the “Company”), a leading provider of digital
marketing software for performance-driven advertisers and agencies,
today announced financial results for the third quarter ended
September 30, 2024.
“Marin is excited to deliver the next generation of AI-powered
performance marketing tools with our latest enhancement, Advisor,”
said Chris Lien, Marin Software’s CEO. “With this OpenAI-powered
virtual teammate, Marin users can interact with the platform in an
entirely new way – unlocking the collective knowledge of digital
marketing thought leaders and putting their best practices to work
with a simple prompt. This is another example of Marin delivering
innovations to help performance marketers save time and sell
more.”
Third Quarter 2024 Product and Business
Highlights:
- Launched Advisor, An AI-Powered Virtual Assistant: Our
new AI-powered virtual assistant allows marketers to streamline
their workflow by automating tasks and receiving actionable
insights. Powered by OpenAI and integrated with Marin’s entire
Knowledge Center, Advisor provides real-time performance analysis,
recommended actions, and step-by-step guidance, helping users
optimize their campaigns directly within Marin’s platform.
- Upgraded Reddit Integration: Our enhanced Reddit
integration now supports full campaign management, including
budgeting, forecasting, and automation—on top of our existing
omni-channel reporting capabilities. Marketers can manage their
Reddit campaigns with the same precision and ease they apply across
other platforms in Marin.
- Launched the Completed Episode Report: The new Completed
Episode report offers greater transparency by showcasing results
from the latest completed episode. This feature gives brands deeper
insights into the performance of their campaigns and highlights the
value delivered by the Marin platform.
- Improved Budget Management Controls: We’ve introduced
new budget floor controls, ensuring campaigns maintain a minimum
spend to maximize impact and avoid underperformance due to budget
shortfalls. These enhancements provide users with automated budget
management that adheres to both maximum and minimum thresholds
across all campaigns and publishers.
- Enhanced Client Grid Reporting: Marin’s in-app client
grid now offers expanded reporting options, including conversion
types and custom columns across publishers. This update gives
marketers more flexibility and deeper insights into their campaign
performance.
- Amazon S3 Integration: Users can now connect their
Amazon S3 buckets as a data source, enabling near real-time access
to critical campaign data such as revenue and conversions. This
integration ensures seamless cross-channel insights, particularly
for those leveraging Amazon’s data solutions.
- Launched Free Media Allocation Audit: For the first
time, we’re offering a complimentary media allocation audit. With
our decades of expertise and industry-leading analytics, this audit
helps performance marketers assess if their digital marketing
budgets are being invested optimally, providing valuable
recommendations to deliver growth and efficiency improvements.
- Search Ads Innovation Agreement with Google: In July
2024, we entered into a new three-year Search Ads Innovation
Agreement with Google that commenced on October 1, 2024, which is
substantially similar to the Revenue Share Agreement with Google
that expired on September 30, 2024, including the same minimum
quarterly payments.
Third Quarter 2024 Notable Client
Achievements:
- Fusion 92: Fusion 92, one of the Midwest’s largest
independent media agencies, utilized Marin’s budgeting platform to
transform budget compliance for their client, a dental services
organization with over 1,500 offices nationwide. In just under two
months, they improved budget compliance from 9% to 96%, saving over
15 hours of manual work per week.
Third Quarter 2024 Financial
Updates:
- Net revenue totaled $4.3 million, a year-over-year decrease of
4% when compared to $4.4 million for the third quarter of
2023.
- GAAP loss from operations was ($2.1) million, resulting in a
GAAP operating margin of (50%), as compared to a GAAP loss from
operations of ($5.1) million and a GAAP operating margin of (115%)
for the third quarter of 2023.
- Non-GAAP loss from operations was ($1.8) million, resulting in
a non-GAAP operating margin of (43%), as compared to a non-GAAP
loss from operations of ($2.9) million and a non-GAAP operating
margin of (65%) for the third quarter of 2023.
- Cash and cash equivalents were $5.6 million as of September 30,
2024.
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.”
In October 2024, after the third quarter of September 30, 2024,
we commenced the implementation of an organizational restructuring
and reduction-in-force plan to reduce the Company’s operating costs
(the “2024 Restructuring Plan”), which is expected to result in the
reduction of our global employees by approximately 27 employees,
representing approximately 26% of our total headcount as of
September 30, 2024. We estimate that the 2024 Restructuring Plan
will result in estimated pre-tax annualized cost savings of
approximately $3.5 million to $3.7 million, all of which is related
to the reduction-in-force pursuant to the 2024 Restructuring Plan,
and we expect to begin realizing the cost savings from the 2024
Restructuring Plan during the three months ended December 31, 2024.
We estimate that we will incur between approximately $0.6 million
and $0.8 million of cash expenditures during the three months ended
December 31, 2024 in connection with the 2024 Restructuring Plan,
substantially all of which relates to severance costs, and we
expect to substantially complete the 2024 Restructuring Plan in the
same period.
Financial Outlook:
Marin is providing guidance for its fourth quarter of 2024, as
follows:
Forward-Looking
Guidance
In millions
Range of Estimate
From
To
Three Months Ending December 31,
2024
Revenue, net
$
4.0
$
4.2
Operating loss (Non-GAAP)
$
(1.4
)
$
(1.1
)
Non-GAAP loss from operations excludes the effects of
stock-based compensation expense, amortization of internally
developed software, impairment of long-lived assets, capitalization
of internally developed software, non-recurring costs associated
with restructurings, and certain professional fees that the Company
has incurred in responding to third-party subpoenas that the
Company has received related to governmental investigations of
Google and Meta.
Additionally, the Company does not reconcile its forward-looking
non-GAAP loss from operations, due to variability between revenue
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 September 30, 2024, and its
outlook for the future. To access the call, please dial (800)
954-0684 in the United States or (212) 231-2929 internationally
with reference to conference ID 13742154. A live webcast of the
conference call will be accessible at
https://viavid.webcasts.com/starthere.jsp?ei=1639634&tp_key=333b2eee9c.
Following the completion of the call through 11:59 p.m. Eastern
Time on November 7, 2024, 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 13742154.
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
expense, amortization of internally developed software and
intangible assets, capitalization of internally developed software,
non-recurring costs associated with restructurings, and certain
professional fees that the Company has incurred in responding to
third-party subpoenas that the Company has received related to
governmental investigations of Google and Meta. 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, benefit
from or provision for income taxes, other income, net,
non-recurring costs associated with restructurings, and certain
professional fees that the Company has incurred in responding to
third-party subpoenas that the Company has received related to
governmental investigations of Google and Meta. 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, the increasing complexity in marketing, progress
on product development efforts, product capabilities, advertiser
and customer behavior, and future financial results, including its
outlook for the fourth quarter of 2024. 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 reduce our expenses or raise additional
capital to meet our obligations as a going concern; our ability to
successfully implement a restructuring plan that we commenced in
October 2024 and the expected costs and savings from the
restructuring plan; the amount of digital advertising spend managed
by our customers using our products; the extent of customer
acceptance, adoption and usage 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 retain and attract qualified
management, technical and sales and marketing personnel; any 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 revenue, 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; 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; 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; our ability to maintain the listing of our common
stock on the Nasdaq; and adverse changes in general economic or
market conditions. 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
October 31, 2024. 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)
September 30,
December 31,
(Unaudited; in thousands, except par
value)
2024
2023
Assets:
Current assets:
Cash and cash equivalents
$
5,588
$
11,363
Accounts receivable, net
3,661
3,864
Prepaid expenses and other current
assets
1,479
1,548
Total current assets
10,728
16,775
Property and equipment, net
115
120
Right-of-use assets, operating leases
819
1,912
Other non-current assets
518
508
Total assets
$
12,180
$
19,315
Liabilities and Stockholders'
Equity:
Current liabilities:
Accounts payable
$
579
$
664
Accrued expenses and other current
liabilities
2,089
2,099
Operating lease liabilities
819
1,518
Total current liabilities
3,487
4,281
Operating lease liabilities,
non-current
—
394
Other long-term liabilities
1,015
1,001
Total liabilities
4,502
5,676
Stockholders’ equity:
Convertible preferred stock, $0.001 par
value
—
—
Common stock, $0.001 par value
3
3
Additional paid-in capital
359,718
358,884
Accumulated deficit
(351,006
)
(344,251
)
Accumulated other comprehensive loss
(1,037
)
(997
)
Total stockholders’ equity
7,678
13,639
Total liabilities and stockholders’
equity
$
12,180
$
19,315
Marin Software Incorporated
Condensed Consolidated Statements of
Operations
(On a GAAP basis)
Three Months Ended September
30,
Nine Months Ended September
30,
(Unaudited; in thousands, except per
share data)
2024
2023
2024
2023
Revenue, net
$
4,282
$
4,438
$
12,358
$
13,381
Cost of revenue
1,703
3,087
5,136
9,501
Gross profit
2,579
1,351
7,222
3,880
Operating expenses:
Sales and marketing
1,091
1,482
3,384
5,442
Research and development
1,760
2,860
5,440
8,599
General and administrative
1,860
2,119
5,144
6,897
Total operating expenses
4,711
6,461
13,968
20,938
Loss from operations
(2,132
)
(5,110
)
(6,746
)
(17,058
)
Other income, net
(176
)
158
66
598
Loss before income taxes
(2,308
)
(4,952
)
(6,680
)
(16,460
)
Provision for income taxes
18
2
75
194
Net loss
$
(2,326
)
$
(4,954
)
$
(6,755
)
$
(16,654
)
Net loss per common share, basic and
diluted
$
(0.74
)
$
(1.66
)
$
(2.19
)
$
(5.70
)
Weighted-average shares outstanding, basic
and diluted
3,135
2,985
3,089
2,920
Marin Software Incorporated
Condensed Consolidated Statements of
Cash Flows
(On a GAAP basis)
Nine Months Ended September
30,
(Unaudited; in thousands)
2024
2023
Operating activities:
Net loss
$
(6,755
)
$
(16,654
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation
5
17
Amortization of internally developed
software
—
1,278
Amortization of right-of-use assets
1,165
1,162
Amortization of deferred costs to obtain
and fulfill contracts
267
277
Loss on disposals of property and
equipment
—
2
Unrealized foreign currency losses
199
43
Stock-based compensation related to equity
awards
957
2,594
Provision for credit losses
(7
)
(388
)
Deferred income tax benefits
(3
)
—
Changes in operating assets and
liabilities
Accounts receivable
113
872
Prepaid expenses and other assets
(235
)
345
Accounts payable
(102
)
21
Accrued expenses and other liabilities
(85
)
(1,041
)
Operating lease liabilities
(1,165
)
(1,162
)
Net cash used in operating activities
(5,646
)
(12,634
)
Investing activities:
Capitalization of internally developed
software
—
(1,511
)
Net cash used in investing activities
—
(1,511
)
Financing activities:
Employee taxes paid for withheld shares
upon equity award settlement
(116
)
(199
)
Proceeds from employee stock purchase
plan, net
—
(3
)
Net cash provided by (used in) financing
activities
(116
)
(202
)
Effect of foreign exchange rate changes on
cash and cash equivalents
(13
)
(13
)
Net decrease in cash and cash
equivalents
(5,775
)
(14,360
)
Cash and cash equivalents:
Beginning of period
11,363
27,957
End of the period
$
5,588
$
13,597
Marin Software Incorporated
Reconciliation of GAAP to Non-GAAP
Expenses
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30
(Unaudited; in thousands)
2023
2023
2023
2023
2023
2024
2024
2024
Sales and marketing
$
2,025
$
1,935
$
1,482
$
1,078
$
6,520
$
1,250
$
1,043
$
1,091
Stock-based compensation
(165
)
(184
)
(88
)
(65
)
(502
)
(64
)
(60
)
(38
)
Restructuring related expenses
—
—
(122
)
—
(122
)
—
—
—
Sales and marketing (Non-GAAP)
$
1,860
$
1,751
$
1,272
$
1,013
$
5,896
$
1,186
$
983
$
1,053
Research and development
$
2,942
$
2,797
$
2,860
$
1,636
$
10,235
$
1,881
$
1,799
$
1,760
Stock-based compensation
(270
)
(305
)
(131
)
(119
)
(825
)
(127
)
(124
)
(86
)
Restructuring related expenses
—
—
(815
)
(22
)
(837
)
—
—
—
Capitalization of internally developed
software
579
578
354
296
1,807
—
—
—
Research and development (Non-GAAP)
$
3,251
$
3,070
$
2,268
$
1,791
$
10,380
$
1,754
$
1,675
$
1,674
General and administrative
$
2,336
$
2,442
$
2,119
$
1,974
$
8,871
$
1,684
$
1,600
$
1,860
Stock-based compensation
(473
)
(627
)
(85
)
(187
)
(1,372
)
(183
)
(109
)
(57
)
Restructuring related expenses
—
—
(189
)
—
(189
)
—
—
—
Third-party subpoena-related expenses
(84
)
(45
)
(36
)
(30
)
(195
)
(60
)
(81
)
(93
)
General and administrative (Non-GAAP)
$
1,779
$
1,770
$
1,809
$
1,757
$
7,115
$
1,441
$
1,410
$
1,710
Marin Software Incorporated
Reconciliation of GAAP to Non-GAAP
Measures
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
(Unaudited; in thousands)
2023
2023
2023
2023
2023
2024
2024
2024
Gross profit
$
1,343
$
1,186
$
1,351
$
2,216
$
6,096
$
2,288
$
2,355
$
2,579
Stock-based compensation
124
137
5
41
307
39
38
32
Amortization of internally developed
software
419
426
433
423
1,701
—
—
—
Restructuring related expenses
—
—
671
2
673
—
—
—
Gross profit (Non-GAAP)
$
1,886
$
1,749
$
2,460
$
2,682
$
8,777
$
2,327
$
2,393
$
2,611
Operating loss
$
(5,960
)
$
(5,988
)
$
(5,110
)
$
(5,748
)
$
(22,806
)
$
(2,527
)
$
(2,087
)
$
(2,132
)
Stock-based compensation
1,032
1,253
309
412
3,006
413
331
213
Amortization of internally developed
software
419
426
433
423
1,701
—
—
—
Restructuring related expenses
—
—
1,797
24
1,821
—
—
—
Capitalization of internally developed
software
(579
)
(578
)
(354
)
(296
)
(1,807
)
—
—
—
Third-party subpoena-related expenses
84
45
36
30
195
60
81
93
Impairment loss on long-lived assets
—
—
—
3,276
3,276
—
—
—
Operating loss (Non-GAAP)
$
(5,004
)
$
(4,842
)
$
(2,889
)
$
(1,879
)
$
(14,614
)
$
(2,054
)
$
(1,675
)
$
(1,826
)
Net loss
$
(5,783
)
$
(5,917
)
$
(4,954
)
$
(5,263
)
$
(21,917
)
$
(2,411
)
$
(2,018
)
$
(2,326
)
Stock-based compensation
1,032
1,253
309
412
3,006
413
331
213
Amortization of internally developed
software
419
426
433
423
1,701
—
—
—
Restructuring related expenses
—
—
1,797
24
1,821
—
—
—
Capitalization of internally developed
software
(579
)
(578
)
(354
)
(296
)
(1,807
)
—
—
—
Third-party subpoena-related expenses
84
45
36
30
195
60
81
93
Impairment loss on long-lived assets
—
—
—
3,276
3,276
—
—
—
Net loss (Non-GAAP)
$
(4,827
)
$
(4,771
)
$
(2,733
)
$
(1,394
)
$
(13,725
)
$
(1,938
)
$
(1,606
)
$
(2,020
)
Marin Software Incorporated
Calculation of Non-GAAP Earnings Per
Share
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
(Unaudited; in thousands, except per
share data)
2023
2023
2023
2023
2023
2024
2024
2024
Net loss (Non-GAAP)
$
(4,827
)
$
(4,771
)
$
(2,733
)
$
(1,394
)
$
(13,725
)
$
(1,938
)
$
(1,606
)
$
(2,020
)
Weighted-average shares outstanding, basic
and diluted
2,873
2,902
2,985
3,009
2,943
3,024
3,108
3,135
Net loss per share, basic and diluted
(Non-GAAP)
$
(1.68
)
$
(1.64
)
$
(0.92
)
$
(0.46
)
$
(4.66
)
$
(0.64
)
$
(0.52
)
$
(0.64
)
Marin Software Incorporated
Reconciliation of Net Loss to Adjusted
EBITDA
Three Months Ended
Year Ended
Three Months Ended
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
(Unaudited; in thousands)
2023
2023
2023
2023
2023
2024
2024
2024
Net loss
$
(5,783
)
$
(5,917
)
$
(4,954
)
$
(5,263
)
$
(21,917
)
$
(2,411
)
$
(2,018
)
$
(2,326
)
Depreciation
11
3
3
2
19
2
2
1
Amortization of internally developed
software
419
426
433
423
1,701
—
—
—
Provision for (benefit from) income
taxes
48
144
2
(344
)
(150
)
(12
)
69
18
Stock-based compensation
1,032
1,253
309
412
3,006
413
331
213
Capitalization of internally developed
software
(579
)
(578
)
(354
)
(296
)
(1,807
)
—
—
—
Restructuring related expenses
—
—
1,797
24
1,821
—
—
—
Impairment loss on long-lived assets
—
—
—
3,276
3,276
—
—
—
Other income, net
(225
)
(215
)
(158
)
(141
)
(739
)
(104
)
(138
)
176
Third-party subpoena-related expenses
84
45
36
30
195
60
81
93
Adjusted EBITDA
$
(4,993
)
$
(4,839
)
$
(2,886
)
$
(1,877
)
$
(14,595
)
$
(2,052
)
$
(1,673
)
$
(1,825
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031446878/en/
Investor Relations, Marin Software
ir@marinsoftware.com
Media Contact Wesley MacLaggan Marketing, Marin Software
(415) 399-2580 press@marinsoftware.com
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