H1 2017 TRADING UPDATE
Core Focus Drives 45% Growth in Programmatic Revenues, Ahead of Plan
London, England and San Francisco, CA. — 11 October 2016 — RhythmOne plc (“RhythmOne” or the “Company”) today provides a preliminary update on its expected performance for the half year ended 30 September 2016 (“H12017” or “the Period”). This update is based on unaudited, pre-close figures that may be subject to change following an audit review of the Company’s accounts.
Performance for the Period is expected to be materially ahead of management expectations across several key metrics, as follows:
- Revenues of at least $80M, 80% from Core mobile, video and programmatic products
- Programmatic revenues of at least $55M, representing 45% growth year-on-year
- Adjusted EBITDA1 loss below ($2.9M), a c.60% improvement over H12016
Importantly, the Company achieved increasing profitability on an adjusted EBITDA1 basis in each of the last two months of the Period, significantly ahead of internal estimates. For context, this performance was delivered while the Company simultaneously accelerated the draw down of its Non-Core products and migrated certain Core revenues onto its programmatic platform.
The above performance was largely the result of RhythmOne’s fundamental realignment toward Core mobile, video and programmatic products, leveraging the Company’s unified programmatic platform, RhythmMax. Total programmatic transaction volume grew by over 85% year-on-year, with notable increases in quality. This was due to new and expanding Supply and Demand integrations and the international launch of the platform across Canada, Australia and 7 EU markets. Total programmatic KPIs for the Period are outlined in the table below:
“It is encouraging to see the financial results of the Company begin to reflect our intense strategic and operational focus on Core mobile, video and programmatic products,” said S. Brian Mukherjee, CEO of RhythmOne. “Within a year, the team has successfully built an industry-leading, programmatic platform, which currently ranks #4 in size and #3 in quality, as measured by comScore and Pixalate, respectively. Our ability to source and represent unique, quality inventory at scale remains a core strength of the Company – one that we intend to augment through both organic and inorganic means. We maintain that the significant steps we took in FY2016 to realign the business around our Core capabilities have set the stage for both top-line revenue growth and a return to full year profitability in FY2017.”
The Company will publish its interim results on Tuesday 15 November 2016.
The information communicated herein constitutes inside information.
1. This press release contains references to adjusted EBITDA and adjusted Loss for the Period attributable to equity holders of the parent. These financial measures do not have any standardized meaning prescribed by IFRS and are therefore referred to as non-GAAP measures. The non-GAAP measures used by RhythmOne may not be comparable to similar measures used by other companies. Adjusted EBITDA is defined as profit/(loss) attributable to equity holders of the parent before interest, other expenses, taxes, depreciation and amortisation, share based payment expense, acquisition and exceptional costs and other expense. Management believes that this measure is a useful supplemental metric as it provides an indication of the results generated by the Company’s principal business activities prior to consideration of how the results are impacted by non-recurring costs, how the results are taxed in various jurisdictions, or how the results are affected by the accounting standards associated with the Group’s share based payment expense.
2. Q12016 and Q22016 KPIs are adjusted to reflect on-platform (RhythmMax) and off-platform (third-party) programmatic products.
3. Volume of transactions (ad requests) processed through the platform. Volumes are continuously optimized for performance and yield.
4. Proportion of the transaction volume monetized. The Q12016 and Q22016 adjustments now include combined on-platform and off-platform metrics, which resulted in year-on-year increases in volume and price, and a decrease in the fill rate due to improved quality controls and yield optimization.
5. Average price across all ad formats, expressed as Cost per Mille or Thousand Impressions.
RhythmOne is a technology-enabled digital media company that connects online audiences with brands through premium content across devices. Founded in 2004, the Company pioneered Internet video search and works with digital advertisers, publishers and content providers to offer fully integrated, cross-screen solutions that span desktop and mobile video, rich media, display, social and native advertising, and content formats. Through its fully integrated programmatic platform, RhythmMax, the Company represents digital advertising inventory across owned, controlled and extended supply sources. The RhythmMax platform includes unique brand safety technology, RhythmGuard, which combines leading third-party verification and proprietary filtering technologies to ensure inventory quality in brand safe environments. RhythmOne’s goal is to maximize the return on advertising spend and provide the most efficient and effective marketplace for digital advertising. The Company is headquartered in San Francisco, California with offices in the US, UK and Canada. For more information please visit www.rhythmone.com.
Press Contacts for RhythmOne
Analyst and Investor Contact
Financial Media Contacts
Edward Bridges / Charles Palmer
FTI Consulting LLP
(UK) 020 3727 1000
Nomad and Broker for RhythmOne
Nick Westlake (Nomad) /Lorna Tilbian / Mark Lander
Numis Securities Limited
(UK) 020 7260 1000