SOURCE: Marin Software

Marin Software

August 05, 2015 16:05 ET

Marin Software Announces Second Quarter 2015 Financial Results

SAN FRANCISCO, CA--(Marketwired - Aug 5, 2015) - Marin Software Incorporated (NYSE: MRIN)

  • Second quarter net revenues of $26.8 million, up 12% year-over-year and 18% on a constant currency basis
  • Second quarter active advertiser count of 853, up from 820 in the first quarter of 2015

Marin Software Incorporated (NYSE: MRIN), provider of a leading cross-channel performance advertising cloud for advertisers and agencies, today announced financial results for the second quarter ended June 30, 2015.

"Marin Software delivered another solid quarter with 18% revenue growth in constant currency, and we are encouraged by the growing interest in our multi-channel advertising cloud across social, search and display," said David A. Yovanno, Chief Executive Officer of Marin. "Importantly, we are taking a renewed and disciplined approach to efficiency in the business and remain on track to achieving Adjusted EBITDA breakeven in the fourth quarter of 2015.

"I am also pleased with the addition of two new leaders in our finance group. As recently announced, Catriona Fallon has joined us as Chief Financial Officer, and brings to Marin proven financial leadership, strategic planning skills and execution capabilities. In addition, we recently brought on a seasoned professional, Jason Starr, to lead our investor relations efforts. I am confident that we now have the skill set and expertise needed to drive Marin's strategic initiatives and to improve and articulate our value to shareholders."

Second Quarter 2015 Financial Highlights:

  • Net Revenues: Net revenues totaled $26.8 million, a year-over-year increase of 12% when compared to $23.9 million in the second quarter of 2014. On a non-GAAP constant currency basis, revenues increased year-over-year by 18% when compared to the second quarter of 2014.

  • Gross profit: GAAP gross profit was $16.2 million, resulting in a gross margin of 60%, compared to the GAAP gross margin of 63% during the second quarter of 2014. Non-GAAP gross profit was $17.4 million, resulting in a non-GAAP gross margin of 65%, compared to non-GAAP gross margin of 66% during the second quarter of 2014.

  • Loss from operations: GAAP loss from operations was ($11.7) million, compared to ($8.9) million for the second quarter of 2014. GAAP operating margin was (44%), compared to (37%) during the second quarter of 2014. Non-GAAP loss from operations was ($6.8) million, compared to ($6.8) million for the second quarter of 2014. Non-GAAP operating margin was (25%), compared to (29%) during the second quarter of 2014.

  • Net loss: Net loss was ($12.0) million or ($0.33) per share based on 36.4 million weighted average shares outstanding. This compares to a net loss of ($6.8) million or ($0.20) per share based upon 33.8 million weighted average shares outstanding for the second quarter of 2014.

  • Non-GAAP net loss: Non-GAAP net loss was ($7.1) million or ($0.20) per share based upon 36.4 million weighted average shares outstanding. This compares to ($7.3) million or ($0.22) per share based on 33.8 million weighted average shares outstanding during the second quarter of 2014.

  • Adjusted EBITDA: Adjusted EBITDA was a loss of ($5.1) million, as compared to a loss of ($5.5) million for the second quarter of 2014.

  • Balance Sheet: As of June 30, 2015, cash and cash equivalents totaled $41.5 million, compared to $68.3 million as of December 31, 2014.

A reconciliation of GAAP to non-GAAP financial measures has 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."

Second Quarter 2015 Business Highlights

  • Completed the first phase of data integration between the Marin and SocialMoov platforms, allowing multi-channel advertisers to gain cross-channel reporting insights and take advantage of Marin's open platform and extensive list of certified revenue integrations.
  • Launched support for Facebook's Dynamic Product Ads to allow advertisers to re-engage website visitors with strong purchase intent and scale their advertising programs. 
  • Released support for Facebook Engagement Targeting for video ad formats, which allows advertisers to re-engage users with strong brand affinity and scale their video advertising spend.
  • Introduced Smart Sync, which provides search advertisers the ability to extend advertising across various publishers without having to create and manage campaigns separately.
  • Launched Budget Optimizer, a tool designed to help marketers accurately predict daily and monthly search spend levels, forecast their business revenue at various levels of investment, and optimize budgets across their paid search portfolios.
  • Launched the Google Upgraded URLs customer migration portal to assist Marin clients to efficiently upgrade to Google's new required URL format.
  • Released major enhancements to Marin's URL Builder product, designed to allow advertisers to set-up, troubleshoot, and manage their Yahoo! Gemini and Google Upgraded URLs together in the same interface and launch new campaigns faster.
  • Announced a new product integration that allows users of HubSpot's platform to align their inbound marketing activities and paid online display advertising by syncing HubSpot landing pages and contact lists with Marin's Perfect Audience display solution.
  • Increased the number of active advertisers leveraging the Marin platform. During the second quarter, 853 active advertisers utilized the Marin platform, representing an increase of 33 active advertisers quarter-over-quarter. Marin defines active advertisers as an advertiser from whom Marin recognized revenues in excess of $2,000 in at least one month during the quarter.

Financial Outlook:

As of August 5, 2015, Marin is initiating guidance for its third quarter and updating guidance for the full year 2015:

   
Forward-Looking Guidance  
In millions, except per share data  
             
    Range of Estimate  
    From     To  
Three Months Ending September 30, 2015                
  Revenues, net   $ 25.5     $ 26.0  
  Non-GAAP loss from operations   $ (6.4 )   $ (5.9 )
  Non-GAAP net loss per share   $ (0.18 )   $ (0.16 )
  Weighted-average shares outstanding     37.0          
Year Ending December 31, 2015                
  Revenues, net   $ 105.0     $ 106.5  
  Non-GAAP loss from operations   $ (21.0 )   $ (20.0 )
  Non-GAAP net loss per share   $ (0.60 )   $ (0.57 )
  Weighted-average shares outstanding     36.6          
                 

Non-GAAP loss from operations and non-GAAP net loss per share excludes the effects of stock-based compensation, amortization of internally developed software, amortization of intangible assets, noncash expenses related to warrants, non-recurring costs associated with acquisitions, benefit from income taxes related to acquisitions and capitalization of internally developed software.

At current spot rates, our guidance assumes a 4% negative impact to revenue growth for both the third quarter and the full year 2015 as compared to the same periods in 2014.

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 June 30, 2015, and its outlook for the future. To access the call, please dial (877) 705-6003 in the U.S. or (201) 493-6725 internationally with reference to the company name and conference title. A live webcast of the conference call will be accessible from Marin Software's website at: http://investor.marinsoftware.com/. Following the completion of the call through 11:59 p.m. EST on August 12, 2015, a recording will be available for replay at: http://investor.marinsoftware.com/ and a telephone replay will be available by dialing (877) 870-5176 in the U.S. or (858) 384-5517 internationally with the recording access code 13613414.

About Marin Software

Marin Software Incorporated (NYSE: MRIN) provides a leading cross-channel performance advertising cloud for advertisers and agencies to measure, manage and optimize more than $7.2 billion as of December 2014 in annualized ad spend across the web and mobile devices. Offering an integrated SaaS platform for search, display and social advertising, Marin helps digital marketers improve financial performance, save time, and make better decisions. Advertisers use Marin to create, target, and convert precise audiences based on recent buying signals from users' search, social and display interactions. Headquartered in San Francisco with offices in nine countries, Marin's technology powers marketing campaigns around the globe. For more information about Marin's products, please visit: http://www.marinsoftware.com/solutions/overview.

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, the amortization of intangible assets, the capitalization of internally developed software, noncash expenses related to the issuance of warrants, the amortization of internally developed software, the benefit from income taxes related to acquisition and the non-recurring costs associated with acquisitions. Non-GAAP net loss per share is calculated as non-GAAP net loss divided by the weighted average shares outstanding that are adjusted to assume the conversion of outstanding preferred shares to common shares as of the beginning of the period.

Adjusted EBITDA. Marin defines Adjusted EBITDA as net loss, adjusted for stock-based compensation expense, depreciation, the amortization of internally developed software, the amortization of intangible assets, the capitalization of internally developed software, interest expense, net, the benefit from or provision for income taxes, other income or expenses, net and the non-recurring costs associated with acquisitions. 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.

Non-GAAP constant currency revenues and growth.  Marin defines non-GAAP constant currency revenues as total revenues excluding the impact of foreign exchange rate movements, and uses it to determine the constant currency revenue growth on a year-over-year basis. Non-GAAP constant currency revenues are calculated by translating current quarter or year-to-date revenues using the average prior period exchange rates. Constant currency revenue growth (expressed as a percentage) is calculated by determining the increase in current quarter and year-to-date revenues over prior period revenues, where current quarter international revenues are translated using prior period exchange rates. The Company considers non-GAAP constant currency revenues and growth as useful metrics as they facilitate management's internal comparison to historical performance, because they exclude the effects of foreign currency volatility that are not indicative of the Company's operating results. Marin believes they provide useful supplemental information to investors about the financial performance of the business, enable a comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating the business.

Forward-Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding Marin's business, growth, position in the industry, product capabilities, market acceptance of Marin's social and display products, search industry trends and adjusted EBITDA projections and other future financial results, including its outlook for the third quarter of 2015 and fiscal year 2015. 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 grow sales to new and existing customers; our ability to expand our sales and marketing capabilities; our ability to retain and attract qualified management and technical personnel; 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; delays, reductions or slower growth in the amount spent on online and mobile advertising and the development of the market for cloud-based software; adverse changes in our relationships with and access to publishers and advertising agencies; level of usage and advertising spend managed on our platform; our ability to expand sales of our solutions in channels other than search advertising; any slow-down in the search advertising market generally; 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 or revenue acquisition management; 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, 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 the ability to acquire and integrate other businesses, including our acquisitions of Perfect Audience and SocialMoov. 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, 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 August 5, 2015. 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 Inc.  
Condensed Consolidated Balance Sheets  
(On a GAAP basis)  
             
    June 30,     December 31,  
(Unaudited; in thousands, except par value)   2015     2014  
Assets                
Current assets                
  Cash and cash equivalents   $ 41,470     $ 68,253  
  Accounts receivable, net     20,345       18,726  
  Prepaid expenses and other current assets     6,573       4,751  
    Total current assets     68,388       91,730  
Property and equipment, net     19,686       16,274  
Goodwill     19,619       11,527  
Intangible assets, net     12,058       7,399  
Other noncurrent assets     893       1,287  
    Total assets   $ 120,644     $ 128,217  
Liabilities and Stockholders' Equity                
Current liabilities                
  Accounts payable   $ 2,066     $ 3,737  
  Accrued expenses and other current liabilities     13,044       12,053  
  Deferred revenues     1,008       2,052  
  Current portion of long-term debt     1,877       2,587  
    Total current liabilities     17,995       20,429  
Long-term debt, less current portion     15       621  
Other long-term liabilities     4,609       1,050  
    Total liabilities     22,619       22,100  
Stockholders' equity                
  Common stock, $0.001 par value     37       35  
  Additional paid-in capital     267,447       253,221  
  Accumulated deficit     (168,099 )     (146,392 )
  Accumulated other comprehensive loss     (1,360 )     (747 )
    Total stockholders' equity     98,025       106,117  
    Total liabilities and stockholders' equity   $ 120,644     $ 128,217  
                     
   
Marin Software Inc.  
Condensed Consolidated Statements of Operations  
(On a GAAP basis)  
                         
    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
(Unaudited; in thousands, except per share data)   2015     2014     2015     2014  
Revenues, net   $ 26,775     $ 23,853     $ 53,188     $ 46,669  
Cost of revenues (1) (2)     10,599       8,763       20,308       17,146  
    Gross profit     16,176       15,090       32,880       29,523  
Operating expenses (1) (2)                                
Sales and marketing     13,064       11,978       25,221       23,966  
Research and development     9,194       6,627       17,678       12,710  
General and administrative     5,655       5,368       11,375       9,786  
    Total operating expenses     27,913       23,973       54,274       46,462  
    Loss from operations     (11,737 )     (8,883 )     (21,394 )     (16,939 )
Interest expense, net     (8 )     (62 )     (19 )     (128 )
Other (expenses) income, net     (164 )     (286 )     80       (281 )
    Loss before (provision for) benefit from income taxes     (11,909 )     (9,231 )     (21,333 )     (17,348 )
(Provision for) benefit from income taxes     (138 )     2,440       (374 )     2,252  
    Net loss   $ (12,047 )   $ (6,791 )   $ (21,707 )   $ (15,096 )
Net loss per common share, basic and diluted   $ (0.33 )   $ (0.20 )   $ (0.60 )   $ (0.45 )
Weighted-average shares outstanding, basic and diluted     36,389       33,771       36,028       33,563  
                                 
(1) Includes stock-based compensation expense as follows:                                
  Cost of revenues   $ 322     $ 192     $ 551     $ 403  
  Sales and marketing     954       449       1,669       852  
  Research and development     2,340       649       3,967       1,086  
  General and administrative     1,323       651       2,247       1,097  
    Total   $ 4,939     $ 1,941     $ 8,434     $ 3,438  
                                 
(2) Includes amortization of intangible assets as follows:                                
  Cost of revenues   $ 276     $ 57     $ 491     $ 57  
  Sales and marketing     247       37       427       37  
  Research and development     276       57       492       57  
  General and administrative     37       11       72       11  
    Total   $ 836     $ 162     $ 1,482     $ 162  
                                 
             
Marin Software Inc.  
Condensed Consolidated Statements of Cash Flows  
(On a GAAP basis)  
             
    Six Months Ended
June 30,
 
(Unaudited; in thousands)   2015     2014  
Operating activities                
Net loss   $ (21,707 )   $ (15,096 )
Adjustments to reconcile net loss to net cash used in operating activities                
  Depreciation     3,305       2,717  
  Amortization of internally developed software     1,167       910  
  Amortization of intangible assets     1,482       162  
  Loss on disposal of property and equipment     9       14  
  Unrealized foreign currency gain     (229 )     --  
  Noncash interest expense related to warrants issued in connection with debt     17       92  
  Stock-based compensation related to equity awards and restricted stock     8,434       3,438  
  Provision for bad debt     309       287  
  Deferred income tax benefits     (80 )     (2,802 )
  Excess tax benefits from stock-based award activities     (9 )     (65 )
  Changes in operating assets and liabilities, net of effect of acquisition                
    Accounts receivable     (733 )     (1,645 )
    Prepaid expenses and other current assets     (1,797 )     (803 )
    Other assets     405       252  
    Accounts payable     (1,498 )     524  
    Deferred revenues     (1,043 )     (1,061 )
    Accrued expenses and other current liabilities     2,216       (1,167 )
      Net cash used in operating activities     (9,752 )     (14,243 )
Investing activities                
Purchases of property and equipment     (5,459 )     (1,405 )
Capitalization of internally developed software     (2,424 )     (1,346 )
Acquisition of businesses, net of cash acquired     (7,509 )     (4,151 )
      Net cash used in investing activities     (15,392 )     (6,902 )
Financing activities                
Repayment of notes payable     (2,376 )     (1,657 )
Repurchase of unvested shares     (2 )     (6 )
Proceeds from exercise of common stock options     1,028       1,532  
Proceeds from employee stock purchase plan     185       726  
Stock issuance costs     (51 )     --  
Excess tax benefits from stock-based award activities     9       65  
      Net cash (used in) provided by financing activities     (1,207 )     660  
        Effect of foreign exchange rate changes on cash and cash equivalents     (432 )     --  
      Net decrease in cash and cash equivalents     (26,783 )     (20,485 )
Cash and cash equivalents                
Beginning of period     68,253       104,407  
End of period   $ 41,470     $ 83,922  
Supplemental disclosure of noncash investing and financing activities                
Purchases of property and equipment recorded in accounts payable and accrued expenses   $ 1,341     $ 110  
Issuance of common stock under employee stock purchase plan     548       715  
Issuance of common stock in connection with business combination     4,337       11,195  
Shares withheld to cover payroll taxes related to the vesting of restricted stock units     513       --  
                 
 
Marin Software Inc.
Reconciliation of GAAP to Non-GAAP Expenses (1)
                                             
    Three Months Ended       Year Ended     Three Months Ended  
(Unaudited; in thousands)  
 
March 31, 2014  
 
 
 
June 30, 2014  
 
 
 
 September
30, 2014
 
 
 
 
 December
31, 2014
 
 
 
 
   December
31, 2014
 
 
 
 
March 31, 2015  
 
 
 
June 30, 2015  
 
Sales and Marketing (GAAP)   $ 11,989     $ 11,978     $ 12,186     $ 11,563       $ 47,716     $ 12,157     $ 13,064  
  Less Stock-based compensation     (403 )     (449 )     (530 )     (513 )       (1,895 )     (715 )     (954 )
  Less Amortization of intangible assets     --       (37 )     (112 )     (112 )       (261 )     (180 )     (247 )
Sales and Marketing (Non-GAAP)   $ 11,586     $ 11,492     $ 11,544     $ 10,938       $ 45,560     $ 11,262     $ 11,863  
Research and Development (GAAP)   $ 6,083     $ 6,627     $ 7,824     $ 8,217       $ 28,751     $ 8,484     $ 9,194  
  Less Stock-based compensation     (437 )     (649 )     (1,362 )     (1,337 )       (3,785 )     (1,627 )     (2,340 )
  Less Amortization of intangible assets     --       (57 )     (170 )     (170 )       (397 )     (216 )     (276 )
  Plus Capitalization of internally developed software     617       729       1,035       765         3,146       827       1,597  
Research and Development (Non-GAAP)   $ 6,263     $ 6,650     $ 7,327     $ 7,475       $ 27,715     $ 7,468     $ 8,175  
General and Administrative (GAAP)   $ 4,416     $ 5,368     $ 5,682     $ 5,791       $ 21,257     $ 5,720     $ 5,655  
  Less Stock-based compensation     (446 )     (651 )     (851 )     (849 )       (2,797 )     (924 )     (1,323 )
  Less Amortization of intangible assets     --       (11 )     (32 )     (32 )       (75 )     (35 )     (37 )
  Less Acquisition related expenses     --       (217 )     (8 )     (125 )       (350 )     (408 )     (128 )
General and Administrative (Non-GAAP)   $ 3,970     $ 4,489     $ 4,791     $ 4,785       $ 18,035     $ 4,353     $ 4,167  
                                                           
(1) The sum of the quarterly financial information may vary from full year financial information due to rounding.
   
 
Marin Software Inc.
Reconciliation of GAAP to Non-GAAP Measures (1)
                                             
    Three Months Ended       Year Ended     Three Months Ended  
(Unaudited; in thousands)   March  31, 2014     June 30, 2014     September 30, 2014     December 31, 2014       December 31, 2014     March 31, 2015     June 30, 2015  
Gross Profit (GAAP)   $ 14,432     $ 15,090     $ 16,539     $ 17,679       $ 63,740     $ 16,704     $ 16,176  
  Plus Stock-based compensation     211       192       173       189         765       229       322  
  Plus Amortization of internally developed software     445       465       480       515         1,905       542       625  
  Plus Amortization of intangible assets     --       57       171       171         399       215       276  
Gross Profit (Non-GAAP)   $ 15,088     $ 15,804     $ 17,363     $ 18,554       $ 66,809     $ 17,690     $ 17,399  
Operating Loss (GAAP)   $ (8,056 )   $ (8,883 )   $ (9,153 )   $ (7,892 )     $ (33,984 )   $ (9,657 )   $ (11,737 )
  Plus Stock-based compensation     1,497       1,941       2,916       2,888         9,242       3,495       4,939  
  Plus Amortization of internally developed software     445       465       480       515         1,905       542       625  
  Plus Amortization of intangible assets     --       162       485       485         1,132       646       836  
  Plus Acquisition related expenses     --       217       8       125         350       408       128  
  Less Capitalization of internally developed software     (617 )     (729 )     (1,035 )     (765 )       (3,146 )     (827 )     (1,597 )
Operating Loss (Non-GAAP)   $ (6,731 )   $ (6,827 )   $ (6,299 )   $ (4,644 )     $ (24,501 )   $ (5,393 )   $ (6,806 )
Net Loss (GAAP)   $ (8,306 )   $ (6,791 )   $ (9,244 )   $ (8,830 )     $ (33,171 )   $ (9,660 )   $ (12,047 )
  Plus Stock-based compensation     1,497       1,941       2,916       2,888         9,242       3,495       4,939  
  Plus Amortization of internally developed software     445       465       480       515         1,905       542       625  
  Plus Amortization of intangible assets     --       162       485       485         1,132       646       836  
  Plus Noncash expenses related to warrants     46       46       22       9         123       9       8  
  Plus Acquisition related expenses     --       217       8       125         350       408       128  
  Less Capitalization of internally developed software     (617 )     (729 )     (1,035 )     (765 )       (3,146 )     (827 )     (1,597 )
  Less Effects of income taxes related to acquisition     --       (2,603 )     --       318         (2,285 )     --       --  
Net Loss (Non-GAAP)   $ (6,935 )   $ (7,292 )   $ (6,368 )   $ (5,255 )     $ (25,850 )   $ (5,387 )   $ (7,108 )
                                                           
(1) The sum of the quarterly financial information may vary from full year financial information due to rounding.
   
 
Marin Software Inc.
Calculation of Non-GAAP Earnings Per Share (1)
                                             
    Three Months Ended       Year Ended     Three Months Ended  
(Unaudited; in thousands, except per share data)   March 31, 2014     June 30, 2014     September 30, 2014     December 31, 2014       December 31, 2014     March 31, 2015     June 30, 2015  
Net Loss (Non-GAAP)   $ (6,935 )   $ (7,292 )   $ (6,368 )   $ (5,255 )     $ (25,850 )   $ (5,387 )   $ (7,108 )
Weighted-average shares outstanding, basic and diluted     33,112       33,771       34,849       35,060         34,210       35,745       36,389  
Non-GAAP net loss per common share, basic and diluted   $ (0.21 )   $ (0.22 )   $ (0.18 )   $ (0.15 )     $ (0.76 )   $ (0.15 )   $ (0.20 )
                                                           
 
Marin Software Inc.
Reconciliation of Net Loss to Adjusted EBITDA (1)
                                             
    Three Months Ended       Year Ended     Three Months Ended  
(Unaudited; in thousands)   March 31, 2014     June 30, 2014     September 30, 2014     December 31, 2014       December 31, 2014     March 31, 2015     June 30, 2015  
Net Loss   $ (8,306 )   $ (6,791 )   $ (9,244 )   $ (8,830 )     $ (33,171 )   $ (9,660 )   $ (12,047 )
  Depreciation     1,350       1,367       1,428       1,524         5,669       1,630       1,675  
  Amortization of internally developed software     445       465       480       515         1,905       542       625  
  Amortization of intangible assets     --       162       485       485         1,132       646       836  
  Interest expense, net     66       62       33       16         177       11       8  
  Provision for (benefit from) income taxes     188       (2,440 )     259       537         (1,456 )     236       138  
EBITDA   $ (6,257 )   $ (7,175 )   $ (6,559 )   $ (5,753 )     $ (25,744 )   $ (6,595 )   $ (8,765 )
  Stock-based compensation     1,497       1,941       2,916       2,888         9,242       3,495       4,939  
  Capitalization of internally developed software     (617 )     (729 )     (1,035 )     (765 )       (3,146 )     (827 )     (1,597 )
  Acquisition related expenses     --       217       8       125         350       408       128  
  Other (income) expenses, net     (4 )     286       (201 )     385         466       (244 )     164  
Adjusted EBITDA   $ (5,381 )   $ (5,460 )   $ (4,871 )   $ (3,120 )     $ (18,832 )   $ (3,763 )   $ (5,131 )
                                                           
(1) The sum of the quarterly financial information may vary from full year financial information due to rounding.
   
   
Marin Software Inc.  
Non-GAAP Constant Currency Revenue Reconciliation (1)  
               
    Three Months Ended      

(Unaudited; in thousands)
  June 30,
2015
  June 30,
2014
  Year-Over-Year
Growth
 
Revenues, as reported   $ 26,775   $ 23,853   12 %
Foreign currency exchange impact on 2015 revenues using 2014 rates     1,253     --   --  
Revenues, at constant currency   $ 28,028   $ 23,853   18 %
                   
(1) Constant currency excludes the impact of foreign currency fluctuations and is computed by applying the average exchange rates from the three months ended June 30, 2014, to the revenues during the corresponding period in 2015.
   

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