Rocket Fuel Reports Financial Results for the Fourth Quarter and Full Year 2015
Full Year Revenue Grew 13% and Non-GAAP Net Revenue Grew 16%
Year over Year
Positive Adjusted EBITDA for the Fourth Quarter and Full Year
Rex Jackson to Join the Company as Chief Financial Officer
REDWOOD CITY, California - February 24, 2016 - Rocket Fuel Inc. (NASDAQ: FUEL), a leading Programmatic Marketing Platform provider, today announced financial results for the fourth quarter and fiscal year ended December 31, 2015. Rocket Fuel posted 13% growth in annual revenue and 16% growth in annual non-GAAP net revenue over 2014, plus positive non-GAAP adjusted EBITDA of $8.9 million in the fourth quarter, and $0.1 million for the full year 2015.
“Rocket Fuel’s fourth quarter results are evidence of our commitment to a new operating philosophy shaped by executional rigor. We exceeded guidance on both the top and bottom-line, and achieved Adjusted EBITDA profitability for the year, an important goal that we laid out in early 2015. We are attracting world class talent who recognize the potential of Rocket Fuel, and the strength of our Moment ScoringTM technology across devices and channels is a strategic advantage that presents many opportunities for profitable growth,” said Randy Wootton, Chief Executive Officer.
In a separate press release today, Rocket Fuel announced that Rex Jackson will join the Company as its Chief Financial Officer, effective March 16, 2016. Mr. Jackson brings significant public company experience, most recently as Chief Financial Officer of JDSU.
Financial Highlights for the Fourth Quarter of 2015
Revenue of $125.4 million increased 12% over the third quarter of 2015 and declined 10% compared to $139.5 million for the fourth quarter of 2014. Revenue derived from the delivery of digital advertising to mobile, social, and video channels collectively was $46.9 million in the fourth quarter of 2015.
Non-GAAP net revenue of $74.7 million exceeded prior guidance of $68 million to $72 million. Non-GAAP net revenue increased 10% over the third quarter of 2015 and declined 3% compared to $76.7 million for the fourth quarter of 2014.
Net loss decreased to $(12.7) million, or $(0.29) per diluted share, compared to a net loss of $(20.5) million, or $(0.49) per diluted share for the fourth quarter of 2014.
Non-GAAP adjusted net income (loss) for the quarter decreased to $(1.8) million, or $(0.04) per diluted share, compared to $(7.4) million, or $(0.18) per diluted share, for the fourth quarter of 2014.
Non-GAAP adjusted EBITDA of $8.9 million exceeded prior guidance of $3 million to $7 million, and compares to $2.8 million in the fourth quarter of 2014.
Cash and cash equivalents were $78.6 million as of December 31, 2015.
Active customer count was 1,666, up from 1,636 in the fourth quarter of 2014.
Employee headcount was 954 as of December 31, 2015.
Financial Highlights for the Fiscal Year ended December 31, 2015
Revenue of $461.6 million increased 13% compared to $408.6 million for the year ended December 31, 2014. Revenue derived from the delivery of digital advertising to mobile, social, and video channels collectively was $168.3 million for the year.
Non-GAAP net revenue of $272.5 million increased 16% compared to $235.2 million for the year ended December 31, 2014.
Net loss was $(210.5) million, or $(4.95) per diluted share, inclusive of an aggregate $124.9 million in restructuring and impairment charges, compared to a net loss of $(64.3) million, or $(1.74) per diluted share for the year ended December 31, 2014.
Non-GAAP adjusted net income (loss) for the year was $(41.1) million, or $(0.97) per diluted share, compared to $(24.1) million, or $(0.65) per diluted share, for the year ended December 31, 2014.
Non-GAAP adjusted EBITDA was $0.1 million compared to $(1.0) million for the year ended December 31, 2014.
Financial Outlook for the First Quarter of 2016
For the first quarter of 2016, the Company expects a typical seasonal decline in activity, and thus anticipates:
- Non-GAAP net revenue in the range of $53 million to $56 million,
- Non-GAAP adjusted EBITDA of a loss of $(11) million to $(14) million.
In addition to continuing to increase quarterly net revenue and Adjusted EBITDA, consistent with our typical quarterly seasonal patterns, Rocket Fuel's financial goals for 2016 include driving toward free cash flow positive for the full year.
Conference Call and Webcast Information
The Rocket Fuel fourth quarter and fiscal year 2015 teleconference and webcast is scheduled to begin at 2:00 PM Pacific Time on Wednesday, February 24, 2016. To participate on the live call, analysts and investors should dial 1-888-378-0320, or outside the U.S. 719-325-2281, at least ten minutes prior to the call. Rocket Fuel will also offer a live and archived webcast of the conference call, accessible from the “Investors” section of its website at www.rocketfuel.com
Use of Non-GAAP Measures
This press release includes information relating to non-GAAP net revenue, non-GAAP adjusted EBITDA, non-GAAP adjusted net income (loss) and non-GAAP adjusted operating expenses (which we refer to as “cash costs”), which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures have been included in this press release, or discussed on our teleconference and webcast, because they are measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operational plans.
We define non-GAAP net revenue as GAAP revenue less media costs. Media costs consist of costs for advertising impressions we purchase from real-time advertising exchanges or other third parties. A limitation of non-GAAP net revenue is that it is a measure designed for internal purposes that may be unique to Rocket Fuel and may not enhance the comparability of Rocket Fuel’s results to other companies in the same industry that have similar business arrangements but present the impact of media costs differently. Our management compensates for this limitation by also considering the comparable GAAP financial measures of revenue, media costs and other cost of revenue.
We define non-GAAP adjusted EBITDA as GAAP net income (loss) before interest expense, other income (expense), net, income tax provision (benefit), depreciation and amortization expense, stock-based compensation expense and related payroll taxes, acquisition and restructuring related expenses, and impairment charges. Non-GAAP adjusted EBITDA has a number of limitations, including the following: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and non-GAAP adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; non-GAAP adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; non-GAAP adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation; non-GAAP adjusted EBITDA does not reflect acquisition and restructuring related expenses, tax and interest expenses that may represent payments reducing the cash available to us; and other companies, including those in our industry, may calculate non-GAAP adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, our management considers non-GAAP adjusted EBITDA alongside other financial performance measures, including cash flow metrics, net income (loss) and our other GAAP results.
We define non-GAAP adjusted net income (loss) as GAAP net income (loss) excluding stock-based compensation expense, amortization of intangible assets, impairment charges, acquisition and restructuring related expenses and the estimated tax impact of the foregoing items. A limitation of non-GAAP adjusted net income (loss) is that it is a measure that may be unique to Rocket Fuel and may not enhance the comparability of Rocket Fuel’s results to other companies in the same industry that define adjusted net income (loss) differently. This measure may also exclude expenses that may have a material impact on Rocket Fuel’s reported financial results. Our management compensates for these limitations by also considering the comparable GAAP financial measure of net income (loss).
We define non-GAAP adjusted operating expenses (which we refer to as “cash costs”) as GAAP total costs and expenses and adjusted for media costs, depreciation and amortization expense, impairment charges, stock-based compensation expense and related payroll taxes, and acquisition and restructuring related expense. Non-GAAP adjusted operating expenses has a number of limitations, including the following: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and this measure does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; non-GAAP adjusted operating expenses does not reflect changes in, or cash requirements for, our working capital needs; non-GAAP adjusted operating expenses does not consider the potentially dilutive impact of equity-based compensation; non-GAAP adjusted operating expenses does not reflect acquisition and restructuring related expenses, tax and interest expenses that may represent payments reducing the cash available to us; and other companies, including those in our industry, may calculate non-GAAP adjusted operating expenses differently, which reduces its usefulness as a comparative measure. Because of these limitations, our management considers non-GAAP adjusted operating expenses alongside other financial performance measures, including total expenses, operating cash flow and our other GAAP results.
For a reconciliation of non-GAAP financial measures to the nearest comparable GAAP financial measures, see “Reconciliation from GAAP Revenue to Non-GAAP Net Revenue,” “Reconciliation from GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA,” “Reconciliation from GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income (Loss)” and “Reconciliation from GAAP Total Cost and Expenses to Non-GAAP Adjusted Operating Expenses ('Cash Costs')" included in this press release.
These non-GAAP financial measures are not intended to be considered in isolation from, as substitutes for, or as superior to, the corresponding financial measures prepared in accordance with GAAP.
Cautions Regarding Forward-Looking Statements
This press release and the webcast of the same date contain “forward-looking statements” regarding future events and our future financial performance, including but not limited to: expected progress towards profitable revenue growth; the anticipated positive impact of our sales and service restructuring and lower cost sales activities, our new executive hires, and our new go to market approach and sales strategy; our ability to expand customer relationships and increase revenue from direct customers; expectations regarding our strategic imperatives and other business initiatives including but not limited to our ability to grow our brand, direct response, and platform businesses; the value of our integrated DMP and DSP platform, the desired integration of brand and direct response campaigns, and the importance of programmatic TV; our ability to identify and capitalize on market trends; our technology advantage; our expectations for margins going forward; expectations regarding capital and general cash spending and cash balances; the expected financial strength provided by our cash position; and expectations for first quarter non-GAAP net revenue and non-GAAP adjusted EBITDA, and financial goals for fiscal year 2016. Words such as “expect,” “believe,” “intend,” “plan,” “goal”, “focus” and other similar words are also intended to identify forward-looking statements.
These forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from the results anticipated by such statements, including, without limitation: our limited operating history, particularly as a relatively new public company; fluctuations in our operating results, including but not limited to fluctuations due to seasonality; our history of losses; failure to achieve expected synergies and efficiencies of operations between Rocket Fuel and [x+1]; failure to achieve the expected benefits of our efficiency improvement plans including various cost-cutting measures; risks associated with our growth, including growth outside of the U.S.; failure to adequately address competition, particularly from agency trading desks; failure to make the right investment decisions with regard to new products, technology, and sales strategies; risks associated with maintaining or increasing sales to new and existing customers and maintaining customer satisfaction; and general market, political, economic and business conditions.
Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are under the caption “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 16, 2015 and in subsequent SEC filings. These forward-looking statements are made as of the date of this press release and the related webcast, and Rocket Fuel expressly disclaims any obligation or undertaking to update the forward-looking statements contained herein or therein to reflect events that occur or circumstances that exist after the date on which the statements were made.
About Rocket Fuel
A leading Programmatic Marketing Platform provider, Rocket Fuel (NASDAQ: FUEL) offers brands, agencies, and platform partners managed services, as well as a SaaS-based Data Management Platform (DMP) and Demand Side Platform (DSP), to optimize performance, awareness, and lift across marketing objectives, channels and devices. By applying artificial intelligence at big data scale, Rocket Fuel's Moment Scoring™ technology performs a real-time calculation of each ad opportunity based on a marketer's goal to determine the likelihood a consumer will engage in a desired action. Moment Scoring technology is designed to go beyond 1:1 marketing by learning to predict what marketing actions to take with a campaign at a precise moment in time, which results in a much more efficient use of marketing dollars. Rocket Fuel serves 96 of the Ad Age 100, three of the top five agency holding company trading desks, and partners with some of the world's leading CRM platforms, marketing platforms, and systems integrators. Headquartered in Redwood City, California, Rocket Fuel has more than 20 offices worldwide and trades on the NASDAQ Global Select Market under the ticker symbol "FUEL." For more information, please visit http://www.rocketfuel.com or call 1-888-717-8873.
Investor Relations:
(650) 481-6082
ir@rocketfuel.com
Rocket Fuel, the Rocket Fuel logo, Moment Scoring, Advertising That Learns and Marketing That Learns are trademarks or registered trademarks of Rocket Fuel Inc. in the United States and other countries.
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| | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands) |
| | | | |
| | December 31, | | December 31, |
| | 2015 | | 2014 |
| Assets | | | |
| Current Assets: | | | |
| Cash and cash equivalents | $ | 78,560 |
| | $ | 107,056 |
|
| Accounts receivable, net | 124,998 |
| | 135,400 |
|
| Prepaid expenses | 3,803 |
| | 3,698 |
|
| Other current assets | 2,081 |
| | 12,531 |
|
| Total current assets | 209,442 |
| | 258,685 |
|
| Property, equipment and software, net | 82,781 |
| | 89,441 |
|
| Restricted cash | 2,141 |
| | 2,915 |
|
| Intangible assets, net | 50,919 |
| | 69,299 |
|
| Goodwill | — |
| | 115,412 |
|
| Deferred tax assets, net | 718 |
| | 2,367 |
|
| Other assets | 1,053 |
| | 1,146 |
|
| Total assets | $ | 347,054 |
| | $ | 539,265 |
|
| | | | |
| Liabilities and Stockholders' Equity | | | |
| Current Liabilities: | | | |
| Accounts payable | $ | 71,292 |
| | $ | 76,085 |
|
| Accrued and other current liabilities | 40,734 |
| | 33,258 |
|
| Deferred revenue | 2,116 |
| | 593 |
|
| Current portion of capital leases | 8,602 |
| | 5,482 |
|
| Current portion of debt | 45,720 |
| | 45,705 |
|
| Total current liabilities | 168,464 |
| | 161,123 |
|
| Debt - Less current portion | 17,617 |
| | 23,335 |
|
| Capital leases - Less current portion | 11,855 |
| | 12,341 |
|
| Deferred rent - Less current portion | 14,042 |
| | 26,818 |
|
| Deferred tax liabilities | 39 |
| | 2,068 |
|
| Other liabilities | 1,137 |
| | 814 |
|
| Total liabilities | 213,154 |
| | 226,499 |
|
| | | | |
| Stockholders' Equity: | | | |
| Common stock | 44 |
| | 42 |
|
| Additional paid-in capital | 453,338 |
| | 421,630 |
|
| Accumulated other comprehensive loss | (151 | ) | | (120 | ) |
| Accumulated deficit | (319,331 | ) | | (108,786 | ) |
| Total stockholders' equity | 133,900 |
| | 312,766 |
|
| Total Liabilities and Stockholders' Equity | $ | 347,054 |
| | $ | 539,265 |
|
|
| | | | | | | | | | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In thousands, except loss per share data) |
| | | | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Revenue | $ | 125,401 |
| | $ | 139,504 |
| | $ | 461,637 |
| | $ | 408,641 |
|
| Costs and expenses: | | | | | | | |
| Media costs | 50,700 |
| | 62,834 |
| | 189,089 |
| | 173,477 |
|
| Other cost of revenue (1) | 19,980 |
| | 19,819 |
| | 79,867 |
| | 48,586 |
|
| Research and development (1) | 10,786 |
| | 12,919 |
| | 44,922 |
| | 39,794 |
|
| Sales and marketing (1) | 39,831 |
| | 42,461 |
| | 166,140 |
| | 146,430 |
|
| General and administrative (1) | 13,691 |
| | 18,750 |
| | 58,354 |
| | 60,545 |
|
| Impairment of goodwill | — |
| | — |
| | 117,521 |
| | — |
|
| Restructuring | 922 |
| | — |
| | 7,393 |
| | — |
|
| Total costs and expenses | 135,910 |
| | 156,783 |
| | 663,286 |
| | 468,832 |
|
| Operating loss | (10,509 | ) | | (17,279 | ) | | (201,649 | ) | | (60,191 | ) |
| Interest expense | 1,090 |
| | 1,007 |
| | 4,563 |
| | 3,092 |
|
| Other (income) expense, net | 803 |
| | 2,824 |
| | 3,112 |
| | 5,267 |
|
| Total other expense, net | 1,893 |
| | 3,831 |
| | 7,675 |
| | 8,359 |
|
| Loss before income taxes | (12,402 | ) | | (21,110 | ) | | (209,324 | ) | | (68,550 | ) |
| Income tax provision (benefit) | 279 |
| | (614 | ) | | 1,221 |
| | (4,239 | ) |
| Net loss | $ | (12,681 | ) | | $ | (20,496 | ) | | $ | (210,545 | ) | | $ | (64,311 | ) |
| | | | | | | | |
| Basic and diluted net loss per share attributable to common stockholders | $ | (0.29 | ) | | $ | (0.49 | ) | | $ | (4.95 | ) | | $ | (1.74 | ) |
| Basic and diluted weighted-average shares used to compute net loss per share attributable to common stockholders | 43,150 |
| | 41,486 |
| | 42,551 |
| | 37,001 |
|
| |
| (1) | Includes unaudited stock-based compensation expense as follows (in thousands): |
|
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Other cost of revenue | $ | 408 |
| | $ | 948 |
| | $ | 1,975 |
| | $ | 1,758 |
|
| Research and development | 1,937 |
| | 1,462 |
| | 7,706 |
| | 5,039 |
|
| Sales and marketing | 2,260 |
| | 2,774 |
| | 9,894 |
| | 10,372 |
|
| General and administrative | 1,180 |
| | 1,461 |
| | 6,399 |
| | 6,361 |
|
| | $ | 5,785 |
| | $ | 6,645 |
| | $ | 25,974 |
| | $ | 23,530 |
|
|
| | | | | | | | | | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| OPERATING ACTIVITIES: | | | | | | | |
| Net loss | $ | (12,681 | ) | | $ | (20,496 | ) | | $ | (210,545 | ) | | $ | (64,311 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | | | |
| Impairment of goodwill | — |
| | — |
| | 117,521 |
| | — |
|
| Depreciation and amortization | 12,684 |
| | 11,111 |
| | 50,762 |
| | 23,670 |
|
| Impairment of leasehold improvements | 3,929 |
| | — |
| | 6,633 |
| | — |
|
| Stock-based compensation | 5,785 |
| | 6,645 |
| | 25,974 |
| | 23,838 |
|
| Deferred taxes | (379 | ) | | (1,618 | ) | | (379 | ) | | (5,418 | ) |
| Excess tax benefit from stock-based activity | — |
| | (99 | ) | | — |
| | (278 | ) |
| Other non-cash adjustments, net | 384 |
| | 483 |
| | 1,499 |
| | 871 |
|
| Changes in operating assets and liabilities, net of effects of acquisition: | | | | | | | |
| Accounts receivable | (14,858 | ) | | (20,072 | ) | | 9,275 |
| | (25,134 | ) |
| Prepaid expenses and other assets | (764 | ) | | 3,245 |
| | 9,128 |
| | (9,153 | ) |
| Accounts payable | 9,616 |
| | 13,027 |
| | (4,015 | ) | | 26,952 |
|
| Accrued and other liabilities | 1,758 |
| | 484 |
| | 269 |
| | (1,085 | ) |
| Deferred rent | (3,868 | ) | | 3,597 |
| | (3,184 | ) | | 24,068 |
|
| Deferred revenue | 465 |
| | (657 | ) | | 1,523 |
| | (334 | ) |
| Net cash provided by (used in) operating activities | 2,071 |
| | (4,350 | ) | | 4,461 |
| | (6,314 | ) |
| INVESTING ACTIVITIES: | | | | | | | |
| Purchases of property, equipment and software | (715 | ) | | (7,579 | ) | | (11,512 | ) | | (47,865 | ) |
| Business acquisition, net | — |
| | — |
| | (367 | ) | | (97,444 | ) |
| Capitalized internal-use software development costs | (3,195 | ) | | (2,141 | ) | | (12,402 | ) | | (7,600 | ) |
| Change in restricted cash | 53 |
| | — |
| | 689 |
| | (2,203 | ) |
| Net cash used in investing activities | (3,857 | ) | | (9,720 | ) | | (23,592 | ) | | (155,112 | ) |
| FINANCING ACTIVITIES: | | | | | | | |
| Proceeds from the issuance of common stock in public offering, net of underwriting discounts and commission and issuance costs | — |
| | — |
| | — |
| | 115,403 |
|
| Proceeds from exercise of common stock options | 16 |
| | 1,050 |
| | 940 |
| | 3,725 |
|
| Excess tax benefit from stock-based activity | — |
| | 99 |
| | — |
| | 278 |
|
| Proceeds from issuance of common stock from employee stock purchase plan | 1,130 |
| | 2,662 |
| | 3,579 |
| | 6,454 |
|
| Tax withholdings related to net share settlements of restricted stock units | (458 | ) | | (326 | ) | | (1,432 | ) | | (567 | ) |
| Repayment of capital lease obligations | (1,902 | ) | | (776 | ) | | (6,239 | ) | | (1,335 | ) |
| Proceeds from debt facilities, net of debt issuance costs | — |
| | 9,479 |
| | (242 | ) | | 44,479 |
|
Repayment of debt facilities
| (1,500 | ) | | (2,445 | ) | | (6,000 | ) | | (13,578 | ) |
| Net cash (used in) provided by financing activities | (2,714 | ) | | 9,743 |
| | (9,394 | ) | | 154,859 |
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND EQUIVALENTS | (23 | ) | | (249 | ) | | 29 |
| | (250 | ) |
| CHANGE IN CASH AND CASH EQUIVALENTS | (4,523 | ) | | (4,576 | ) | | (28,496 | ) | | (6,817 | ) |
| CASH AND CASH EQUIVALENTS—Beginning of period | 83,083 |
| | 111,632 |
| | 107,056 |
| | 113,873 |
|
| CASH AND CASH EQUIVALENTS—End of period | $ | 78,560 |
| | $ | 107,056 |
| | $ | 78,560 |
| | $ | 107,056 |
|
|
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION: | | | | | | | |
| Cash paid for income taxes, net of refunds | $ | 417 |
| | $ | 840 |
| | $ | 1,251 |
| | $ | 1,035 |
|
| Cash paid for interest | 1,006 |
| | 1,242 |
| | 3,936 |
| | 2,840 |
|
| SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | |
| Purchases of property and equipment recorded in accounts payable and accruals | $ | 1,048 |
| | $ | 2,077 |
| | $ | 1,048 |
| | $ | 2,077 |
|
| Property, plant and equipment acquired under capital lease obligations | 3,681 |
| | 10,764 |
| | 8,797 |
| | 18,619 |
|
| Vesting of early exercised options | 34 |
| | 68 |
| | 167 |
| | 742 |
|
| Stock-based compensation capitalized in internal-use software costs | 598 |
| | 460 |
| | 2,616 |
| | 1,643 |
|
| Issuance of common stock in connection with acquisition | — |
| | — |
| | — |
| | 82,421 |
|
|
| | | | | | | | | | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED NON-GAAP MEASURES |
| (In thousands, except per share data) |
| | | | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Non-GAAP net revenue | $ | 74,701 |
| | $ | 76,670 |
| | $ | 272,548 |
| | $ | 235,164 |
|
| Non-GAAP adjusted EBITDA | $ | 8,899 |
| | $ | 2,844 |
| | $ | 89 |
| | $ | (966 | ) |
| Non-GAAP adjusted net income (loss) | $ | (1,847 | ) | | $ | (7,434 | ) | | $ | (41,079 | ) | | $ | (24,101 | ) |
| Non-GAAP adjusted net income (loss) per diluted share | $ | (0.04 | ) | | $ | (0.18 | ) | | $ | (0.97 | ) | | $ | (0.65 | ) |
| Non-GAAP adjusted operating expenses ("Cash Costs") | $ | 65,802 |
| | $ | 73,826 |
| | $ | 272,459 |
| | $ | 236,130 |
|
|
| | | | | | | | | | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED RECONCILIATION FROM GAAP REVENUE TO NON-GAAP NET REVENUE |
| (In thousands) |
| | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Revenue | $ | 125,401 |
| | $ | 139,504 |
| | $ | 461,637 |
| | $ | 408,641 |
|
| Less: Media costs | 50,700 |
| | 62,834 |
| | 189,089 |
| | 173,477 |
|
| Non-GAAP net revenue | $ | 74,701 |
| | $ | 76,670 |
| | $ | 272,548 |
| | $ | 235,164 |
|
|
| | | | | | | | | | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED RECONCILIATION FROM GAAP NET LOSS TO NON-GAAP ADJUSTED EBITDA |
| (In thousands) |
| | | | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Net loss | $ | (12,681 | ) | | $ | (20,496 | ) | | $ | (210,545 | ) | | $ | (64,311 | ) |
| Adjustments: | | | | | | | |
| Interest expense | 1,090 |
| | 1,007 |
| | 4,563 |
| | 3,092 |
|
| Income tax provision (benefit) | 279 |
| | (614 | ) | | 1,221 |
| | (4,239 | ) |
| Depreciation and amortization expense | 12,684 |
| | 11,111 |
| | 50,762 |
| | 23,670 |
|
| Stock-based compensation expense | 5,785 |
| | 6,645 |
| | 25,974 |
| | 23,530 |
|
| Other (income) expense, net | 803 |
| | 2,824 |
| | 3,112 |
| | 5,267 |
|
| Acquisition expense | — |
| | 2,240 |
| | — |
| | 11,476 |
|
| Restructuring expense | 922 |
| | — |
| | 7,393 |
| | — |
|
| Payroll tax expense related to stock-based compensation | 17 |
| | 127 |
| | 88 |
| | 549 |
|
| Impairment of goodwill | — |
| | — |
| | 117,521 |
| | — |
|
| Total adjustments | 21,580 |
| | 23,340 |
| | 210,634 |
| | 63,345 |
|
| Non-GAAP adjusted EBITDA | $ | 8,899 |
| | $ | 2,844 |
| | $ | 89 |
| | $ | (966 | ) |
|
| | | | | | | | | | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED RECONCILIATION FROM GAAP NET LOSS TO NON-GAAP ADJUSTED NET INCOME (LOSS) |
| (In thousands, except per share data) |
| | | | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Net loss | $ | (12,681 | ) | | $ | (20,496 | ) | | $ | (210,545 | ) | | $ | (64,311 | ) |
| Stock-based compensation expense | 5,785 |
| | 6,645 |
| | 25,974 |
| | 23,530 |
|
| Amortization of intangible assets | 4,127 |
| | 4,227 |
| | 18,380 |
| | 5,402 |
|
| Acquisition expense | — |
| | 2,240 |
| | — |
| | 11,476 |
|
| Restructuring expense | 922 |
| | — |
| | 7,393 |
| | — |
|
| Tax impact of the above items | — |
| | (50 | ) | | 198 |
| | (198 | ) |
| Impairment of goodwill | — |
| | — |
| | 117,521 |
| | — |
|
| Non-GAAP adjusted net income (loss) | $ | (1,847 | ) | | $ | (7,434 | ) | | $ | (41,079 | ) | | $ | (24,101 | ) |
| | | | | | | | |
| Basic and diluted net loss per share attributable to common stockholders | $ | (0.29 | ) | | $ | (0.49 | ) | | $ | (4.95 | ) | | $ | (1.74 | ) |
| | | | | | | | |
| Non-GAAP adjusted net income (loss) per diluted share | $ | (0.04 | ) | | $ | (0.18 | ) | | $ | (0.97 | ) | | $ | (0.65 | ) |
| | | | | | | | |
| Weighted average shares used in computing non-GAAP adjusted net income (loss) per diluted share | 43,150 |
| | 41,486 |
| | 42,551 |
| | 37,001 |
|
|
| | | | | | | | | | | | | | | |
| Rocket Fuel Inc. |
| UNAUDITED RECONCILIATION FROM GAAP TOTAL COSTS AND EXPENSES TO NON-GAAP ADJUSTED OPERATING EXPENSES ("CASH COSTS") |
| (In thousands) |
| | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Total costs and expenses | $ | 135,910 |
| | $ | 156,783 |
| | $ | 663,286 |
| | $ | 468,832 |
|
| Less media costs | 50,700 |
| | 62,834 |
| | 189,089 |
| | 173,477 |
|
| Adjustments: | | | | | | | |
| Depreciation and amortization expense | 12,684 |
| | 11,111 |
| | 50,762 |
| | 23,670 |
|
| Stock-based compensation | 5,785 |
| | 6,645 |
| | 25,974 |
| | 23,530 |
|
| Acquisition expense | — |
| | 2,240 |
| | — |
| | 11,476 |
|
| Restructuring expense | 922 |
| | — |
| | 7,393 |
| | — |
|
| Payroll tax expense related to stock based compensation | 17 |
| | 127 |
| | 88 |
| | 549 |
|
| Impairment of goodwill | — |
| | — |
| | 117,521 |
| | — |
|
| Total adjustments | 19,408 |
| | 20,123 |
| | 201,738 |
| | 59,225 |
|
| Non-GAAP adjusted operating expenses ("Cash Costs") | $ | 65,802 |
| | $ | 73,826 |
| | $ | 272,459 |
| | $ | 236,130 |
|
