Comscore Reports Second Quarter 2019 Results
Second Quarter 2019 Financial Results
- Year-over-year revenue for the second quarter declined 4.4% to
$96.9 million - Including 2019 non-cash impairment charges totaling
$241.6 million , net loss of$279.5 million , or$(4.61) per share, compared to a net loss of$56.0 million , or$(1.02) per share in the year-ago quarter - Adjusted EBITDA loss of
$3.2 million , compared to positive adjusted EBITDA of$1.3 million in the year-ago quarter - Cash, cash equivalents and restricted cash of
$53.8 million , compared to$50.2 million as ofDecember 31, 2018
"In the second quarter, we took significant steps to better prioritize, refocus and invest in our product portfolio, and provide our customers with innovative technologies and services which we believe will drive us to a position of profitability and growth faster and more efficiently," said
Second Quarter Summary Results
Total revenue in the second quarter of 2019 was
Ratings and Planning revenue decreased to
Analytics and Optimization revenue declined to
Movies Reporting and Analytics revenue was
Due in part to a decline in market capitalization and revenue, the company performed an interim impairment assessment as of the end of the quarter. As a result of the assessment, the company took non-cash impairment charges totaling
During the second quarter of 2019, the company recorded a
Primarily as a result of the non-cash impairment charges and legal accrual, net loss for the second quarter of 2019 was
For the second quarter of 2019, non-GAAP adjusted EBITDA loss was
Balance Sheet and Liquidity
As of
Conference Call Information for Today,
Management will provide commentary on the company's results in a conference call today at
About
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal and state securities laws, including, without limitation,
Investors are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, we are disclosing herein non-GAAP net income (loss) and adjusted EBITDA, which are non-GAAP financial measures used by our management to understand and evaluate our core operating performance and trends. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, as they permit our investors to view our core business performance using the same metrics that management uses to evaluate our performance. Nevertheless, our use of these non-GAAP financial measures has limitations as an analytical tool, and investors should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Instead, you should consider these measures alongside GAAP-based financial performance measures, net income (loss), various cash flow metrics, and our other GAAP financial results.
Set forth below are reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures. These reconciliations should be carefully evaluated.
COMSCORE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) |
|||||||
As of |
As of |
||||||
June 30, 2019 |
December 31, 2018 |
||||||
(Unaudited) |
|||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
48,963 |
$ |
44,096 |
|||
Restricted cash |
4,863 |
6,102 |
|||||
Accounts receivable, net of allowances of $1,598 and $1,597, respectively |
71,231 |
75,609 |
|||||
Prepaid expenses and other current assets |
15,579 |
19,972 |
|||||
Total current assets |
140,636 |
145,779 |
|||||
Property and equipment, net |
32,819 |
27,339 |
|||||
Operating right-of-use assets |
39,377 |
— |
|||||
Other non-current assets |
5,984 |
8,898 |
|||||
Deferred tax assets |
2,783 |
3,991 |
|||||
Intangible assets, net |
93,458 |
126,945 |
|||||
Goodwill |
416,775 |
641,191 |
|||||
Total assets |
$ |
731,832 |
$ |
954,143 |
|||
Liabilities and Stockholders' Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
40,303 |
$ |
29,836 |
|||
Accrued expenses |
54,803 |
58,140 |
|||||
Contract liability |
58,933 |
64,189 |
|||||
Customer advances |
5,926 |
6,688 |
|||||
Warrants liability |
10,798 |
— |
|||||
Current operating lease liabilities |
6,548 |
— |
|||||
Other current liabilities |
10,996 |
10,083 |
|||||
Total current liabilities |
188,307 |
168,936 |
|||||
Financing derivatives |
25,000 |
26,100 |
|||||
Senior secured convertible notes |
180,909 |
177,342 |
|||||
Non-current operating lease liabilities |
45,928 |
— |
|||||
Deferred rent |
— |
10,304 |
|||||
Deferred tax liabilities |
314 |
5,527 |
|||||
Other non-current liabilities |
21,298 |
14,367 |
|||||
Total liabilities |
461,756 |
402,576 |
|||||
Commitments and contingencies |
|||||||
Stockholders' equity: |
|||||||
Preferred stock, $0.001 par value per share; 5,000,000 shares authorized at June 30, 2019 and December 31, 2018; no shares issued or outstanding as of June 30, 2019 and December 31, 2018 |
— |
— |
|||||
Common stock, $0.001 par value per share; 150,000,000 shares authorized as of June 30, 2019 and December 31, 2018; 70,056,765 shares issued and 63,291,969 shares outstanding as of June 30, 2019, and 66,154,626 shares issued and 59,389,830 shares outstanding as of December 31, 2018 |
63 |
59 |
|||||
Additional paid-in capital |
1,586,750 |
1,561,208 |
|||||
Accumulated other comprehensive loss |
(10,565) |
(10,621) |
|||||
Accumulated deficit |
(1,076,188) |
(769,095) |
|||||
Treasury stock, at cost, 6,764,796 shares as of June 30, 2019 and December 31, 2018 |
(229,984) |
(229,984) |
|||||
Total stockholders' equity |
270,076 |
551,567 |
|||||
Total liabilities and stockholders' equity |
$ |
731,832 |
$ |
954,143 |
COMSCORE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In thousands, except share and per share data) |
||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Revenues |
$ |
96,888 |
$ |
101,389 |
$ |
199,182 |
$ |
207,308 |
||||||||
Cost of revenues(1) (2) |
51,994 |
51,526 |
105,401 |
98,780 |
||||||||||||
Selling and marketing (1) (2) |
23,329 |
29,647 |
48,169 |
55,552 |
||||||||||||
Research and development(1) (2) |
16,883 |
20,889 |
35,099 |
39,605 |
||||||||||||
General and administrative(1) (2) |
16,932 |
28,699 |
36,477 |
47,360 |
||||||||||||
Investigation and audit related |
2,354 |
4,883 |
3,196 |
36,750 |
||||||||||||
Amortization of intangible assets |
8,076 |
8,266 |
16,181 |
16,810 |
||||||||||||
Impairment of goodwill |
224,272 |
— |
224,272 |
— |
||||||||||||
Impairment of intangible asset |
17,308 |
— |
17,308 |
— |
||||||||||||
Settlement of litigation, net |
5,000 |
5,250 |
5,000 |
5,250 |
||||||||||||
Restructuring (1) |
2,949 |
3,833 |
2,879 |
5,090 |
||||||||||||
Total expenses from operations |
369,097 |
152,993 |
493,982 |
305,197 |
||||||||||||
Loss from operations |
(272,209) |
(51,604) |
(294,800) |
(97,889) |
||||||||||||
Interest expense, net |
(8,242) |
(4,124) |
(15,001) |
(7,029) |
||||||||||||
Other (expense) income, net |
(3,081) |
807 |
(112) |
884 |
||||||||||||
(Loss) gain from foreign currency transactions |
(464) |
1,045 |
(426) |
123 |
||||||||||||
Loss before income taxes |
(283,996) |
(53,876) |
(310,339) |
(103,911) |
||||||||||||
Income tax benefit (provision) |
4,463 |
(2,101) |
3,292 |
(3,516) |
||||||||||||
Net loss |
$ |
(279,533) |
$ |
(55,977) |
$ |
(307,047) |
$ |
(107,427) |
||||||||
Net loss per common share: |
||||||||||||||||
Basic and diluted |
$ |
(4.61) |
$ |
(1.02) |
$ |
(5.09) |
$ |
(1.90) |
||||||||
Weighted-average number of shares used in per share calculation - Common Stock: |
||||||||||||||||
Basic and diluted |
60,697,608 |
55,192,741 |
60,315,528 |
56,703,795 |
||||||||||||
Comprehensive loss: |
||||||||||||||||
Net loss |
$ |
(279,533) |
$ |
(55,977) |
$ |
(307,047) |
$ |
(107,427) |
||||||||
Other comprehensive income (loss): |
||||||||||||||||
Foreign currency cumulative translation adjustment |
677 |
(3,975) |
56 |
(2,360) |
||||||||||||
Total comprehensive loss |
$ |
(278,856) |
$ |
(59,952) |
$ |
(306,991) |
$ |
(109,787) |
||||||||
(1) Stock-based compensation expense is included in the line items above as follows: |
||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Cost of revenues |
$ |
636 |
$ |
3,774 |
$ |
1,484 |
$ |
3,987 |
||||||||
Selling and marketing |
1,087 |
5,792 |
2,403 |
6,367 |
||||||||||||
Research and development |
668 |
3,972 |
1,394 |
4,316 |
||||||||||||
General and administrative |
1,913 |
9,461 |
5,976 |
10,210 |
||||||||||||
Restructuring |
(266) |
— |
(266) |
— |
||||||||||||
Total stock-based compensation expense |
$ |
4,038 |
$ |
22,999 |
$ |
10,991 |
$ |
24,880 |
(2) Excludes amortization of intangible assets, which is presented separately in the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
COMSCORE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) |
|||||||
Six Months Ended June 30, |
|||||||
2019 |
2018 |
||||||
Operating activities: |
|||||||
Net loss |
$ |
(307,047) |
$ |
(107,427) |
|||
Adjustments to reconcile net loss to net cash used in operating activities: |
|||||||
Depreciation |
6,111 |
8,839 |
|||||
Non-cash operating lease expense |
2,747 |
— |
|||||
Amortization expense of finance leases |
1,361 |
— |
|||||
Amortization of intangible assets |
16,181 |
16,810 |
|||||
Impairment of goodwill |
224,272 |
— |
|||||
Impairment of intangible asset |
17,308 |
— |
|||||
Stock-based compensation |
10,991 |
24,880 |
|||||
Deferred tax (benefit) provision |
(3,983) |
2,477 |
|||||
Change in fair value of financing derivatives |
(1,100) |
4,460 |
|||||
Change in fair value of investment in equity securities |
2,016 |
(265) |
|||||
Accretion of debt discount |
3,042 |
1,978 |
|||||
Amortization of deferred financing costs |
525 |
445 |
|||||
Other |
(20) |
510 |
|||||
Changes in operating assets and liabilities: |
|||||||
Accounts receivable |
4,442 |
10,638 |
|||||
Prepaid expenses and other assets |
3,190 |
(5,255) |
|||||
Accounts payable, accrued expenses, and other liabilities |
20,176 |
(18,138) |
|||||
Contract liability and customer advances |
(6,552) |
(14,321) |
|||||
Operating lease liabilities |
(4,364) |
— |
|||||
Net cash used in operating activities |
(10,704) |
(74,369) |
|||||
Investing activities: |
|||||||
Proceeds from sale of investment in equity securities |
705 |
— |
|||||
Purchases of property and equipment |
(1,893) |
(1,287) |
|||||
Capitalized internal-use software costs |
(5,619) |
(5,228) |
|||||
Net cash used in investing activities |
(6,807) |
(6,515) |
|||||
Financing activities: |
|||||||
Proceeds from borrowings on senior secured convertible notes |
— |
100,000 |
|||||
Debt issuance costs |
— |
(5,123) |
|||||
Proceeds from private placement, net of issuance costs paid |
19,894 |
— |
|||||
Financing proceeds received on subscription receivable |
— |
4,676 |
|||||
Proceeds from sale-leaseback financing transaction |
4,252 |
— |
|||||
Proceeds from the exercise of stock options |
1,191 |
164 |
|||||
Payments for taxes related to net share settlement of equity awards |
(1,210) |
(4,275) |
|||||
Principal payments on finance leases |
(1,417) |
— |
|||||
Principal payments on capital lease and software license arrangements |
(1,662) |
(5,359) |
|||||
Net cash provided by financing activities |
21,048 |
90,083 |
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
91 |
(1,136) |
|||||
Net increase in cash, cash equivalents and restricted cash |
3,628 |
8,063 |
|||||
Cash, cash equivalents and restricted cash at beginning of period |
50,198 |
45,125 |
|||||
Cash, cash equivalents and restricted cash at end of period |
$ |
53,826 |
$ |
53,188 |
|||
As of June 30, |
|||||||
2019 |
2018 |
||||||
Cash and cash equivalents |
$ |
48,963 |
$ |
46,589 |
|||
Restricted cash |
4,863 |
6,599 |
|||||
Total cash, cash equivalents and restricted cash |
$ |
53,826 |
$ |
53,188 |
Reconciliation of Non-GAAP Financial Measures
The following table presents a reconciliation of net loss (GAAP) to adjusted EBITDA for each of the periods identified:
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
(In thousands) |
2019 |
2018 |
2019 |
2018 |
|||||||||||
Net loss (GAAP) |
$ |
(279,533) |
$ |
(55,977) |
$ |
(307,047) |
$ |
(107,427) |
|||||||
Income tax (benefit) provision |
(4,463) |
2,101 |
(3,292) |
3,516 |
|||||||||||
Interest expense, net |
8,242 |
4,124 |
15,001 |
7,029 |
|||||||||||
Depreciation |
3,005 |
4,276 |
6,111 |
8,839 |
|||||||||||
Amortization expense of finance leases |
787 |
— |
1,361 |
— |
|||||||||||
Amortization of intangible assets |
8,076 |
8,266 |
16,181 |
16,810 |
|||||||||||
EBITDA |
(263,886) |
(37,210) |
(271,685) |
(71,233) |
|||||||||||
Adjustments: |
|||||||||||||||
Stock-based compensation |
4,304 |
22,999 |
11,257 |
24,880 |
|||||||||||
Investigation and audit related |
2,354 |
4,883 |
3,196 |
36,750 |
|||||||||||
Settlement of litigation, net |
5,000 |
5,250 |
5,000 |
5,250 |
|||||||||||
Restructuring |
2,949 |
3,833 |
2,879 |
5,090 |
|||||||||||
Impairment of goodwill |
224,272 |
— |
224,272 |
— |
|||||||||||
Impairment of intangible asset |
17,308 |
— |
17,308 |
— |
|||||||||||
Private placement issuance cost |
1,154 |
— |
1,154 |
— |
|||||||||||
Other expense, net (1) |
3,304 |
1,506 |
916 |
4,135 |
|||||||||||
Adjusted EBITDA |
$ |
(3,241) |
$ |
1,261 |
$ |
(5,703) |
$ |
4,872 |
(1) Adjustments to other expense, net, reflect non-cash changes in the fair value of financing derivatives and equity securities investment included in other (expense) income, net on our Condensed Consolidated Statements of Operations and Comprehensive Loss. |
The following table presents a reconciliation of net loss (GAAP) to non-GAAP net loss for each of the periods identified:
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
(In thousands) |
2019 |
2018 |
2019 |
2018 |
|||||||||||
Net loss (GAAP) |
$ |
(279,533) |
$ |
(55,977) |
$ |
(307,047) |
$ |
(107,427) |
|||||||
Adjustments: |
|||||||||||||||
Stock-based compensation |
4,304 |
22,999 |
11,257 |
24,880 |
|||||||||||
Investigation and audit related |
2,354 |
4,883 |
3,196 |
36,750 |
|||||||||||
Amortization of intangible assets (1) |
8,076 |
8,266 |
16,181 |
16,810 |
|||||||||||
Settlement of litigation, net |
5,000 |
5,250 |
5,000 |
5,250 |
|||||||||||
Restructuring |
2,949 |
3,833 |
2,879 |
5,090 |
|||||||||||
Impairment of goodwill |
224,272 |
— |
224,272 |
— |
|||||||||||
Impairment of intangible asset |
17,308 |
— |
17,308 |
— |
|||||||||||
Private placement issuance cost |
1,154 |
— |
1,154 |
— |
|||||||||||
Other expense, net (2) |
3,304 |
1,506 |
916 |
4,135 |
|||||||||||
Non-GAAP net loss |
$ |
(10,812) |
$ |
(9,240) |
$ |
(24,884) |
$ |
(14,512) |
(1) In the fourth quarter of 2018, amortization of intangible assets was added as an adjustment in our calculation of non-GAAP net loss. Prior year non-GAAP net loss has been recast to include this adjustment, which is intended to better reflect our core operating performance. |
(2) Adjustments to other expense, net, reflect non-cash changes in the fair value of financing derivatives and equity securities investment included in other (expense) income, net on our Condensed Consolidated Statements of Operations and Comprehensive Loss. |
We do not provide GAAP net income (loss) on a forward-looking basis because we are unable to predict with reasonable certainty our future stock-based compensation expense, investigation, audit-related and litigation expense, fair value adjustments for financing derivatives and warrants, variable interest expense for outstanding senior secured convertible notes, and any unusual gains or losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. For this reason, we are unable without unreasonable effort to provide a reconciliation of adjusted EBITDA or non-GAAP net loss to the most directly comparable GAAP measure, GAAP net income (loss), on a forward-looking basis.
Supplemental Non-GAAP Disclosure
The following tables present a reconciliation of certain non-GAAP expense line items (to be discussed on today's conference call) to the most directly comparable GAAP expense line items. GAAP expense line items have been adjusted to exclude the effects of stock-based compensation.
Three Months Ended June 30, |
|||||||||||||||||||||||||||||
2019 (Unaudited) |
2018 (Unaudited) |
||||||||||||||||||||||||||||
(In thousands) |
As |
Less: stock- |
As |
% of |
As reported |
Less: stock |
As |
% of |
|||||||||||||||||||||
Revenues |
$ |
96,888 |
100.0 |
% |
$ |
101,389 |
100.0 |
% |
|||||||||||||||||||||
Cost of revenues |
51,994 |
$ |
636 |
$ |
51,358 |
53.0 |
% |
51,526 |
$ |
3,774 |
$ |
47,752 |
47.1 |
% |
|||||||||||||||
Gross profit |
44,894 |
(636) |
45,530 |
47.0 |
% |
49,863 |
(3,774) |
53,637 |
52.9 |
% |
|||||||||||||||||||
Selling and marketing |
23,329 |
1,087 |
22,242 |
23.0 |
% |
29,647 |
5,792 |
23,855 |
23.5 |
% |
|||||||||||||||||||
Research and development |
16,883 |
668 |
16,215 |
16.7 |
% |
20,889 |
3,972 |
16,917 |
16.7 |
% |
|||||||||||||||||||
General and administrative |
16,932 |
1,913 |
15,019 |
15.5 |
% |
28,699 |
9,461 |
19,238 |
19.0 |
% |
|||||||||||||||||||
Restructuring |
2,949 |
(266) |
3,215 |
3.3 |
% |
3,833 |
— |
3,833 |
3.8 |
% |
|||||||||||||||||||
Six Months Ended June 30, |
|||||||||||||||||||||||||||||
2019 (Unaudited) |
2018 (Unaudited) |
||||||||||||||||||||||||||||
(In thousands) |
As |
Less: stock- |
As |
% of |
As |
Less: stock- |
As |
% of |
|||||||||||||||||||||
Revenues |
$ |
199,182 |
100.0 |
% |
$ |
207,308 |
100.0 |
% |
|||||||||||||||||||||
Cost of revenues |
105,401 |
$ |
1,484 |
$ |
103,917 |
52.2 |
% |
98,780 |
$ |
3,987 |
$ |
94,793 |
45.7 |
% |
|||||||||||||||
Gross profit |
93,781 |
(1,484) |
95,265 |
47.8 |
% |
108,528 |
(3,987) |
112,515 |
54.3 |
% |
|||||||||||||||||||
Selling and marketing |
48,169 |
2,403 |
45,766 |
23.0 |
% |
55,552 |
6,367 |
49,185 |
23.7 |
% |
|||||||||||||||||||
Research and development |
35,099 |
1,394 |
33,705 |
16.9 |
% |
39,605 |
4,316 |
35,289 |
17.0 |
% |
|||||||||||||||||||
General and administrative |
36,477 |
5,976 |
30,501 |
15.3 |
% |
47,360 |
10,210 |
37,150 |
17.9 |
% |
|||||||||||||||||||
Restructuring |
2,879 |
(266) |
3,145 |
1.6 |
% |
5,090 |
— |
5,090 |
2.5 |
% |
We do not provide GAAP cost of revenues, selling and marketing, research and development, general and administrative, and restructuring expense on a forward-looking basis because we are unable to predict with reasonable certainty our future stock-based compensation expense without unreasonable effort. Stock-based compensation expense is uncertain, depends on various factors, and could be material to results computed in accordance with GAAP. For this reason, we are unable without unreasonable effort to provide a reconciliation of non-GAAP operating expense to the most directly comparable GAAP measure on a forward-looking basis.
Revenues
Revenues from our three offerings of products and services are as follows:
Three Months Ended June 30, |
||||||||||||||||||||
(In thousands) |
2019 |
% of |
2018 |
% of |
$ Variance |
% Variance |
||||||||||||||
Ratings and Planning |
$ |
68,922 |
71.1 |
% |
$ |
70,501 |
69.5 |
% |
$ |
(1,579) |
(2.2) |
% |
||||||||
Analytics and Optimization |
17,293 |
17.9 |
% |
20,533 |
20.3 |
% |
(3,240) |
(15.8) |
% |
|||||||||||
Movies Reporting and Analytics |
10,673 |
11.0 |
% |
10,355 |
10.2 |
% |
318 |
3.1 |
% |
|||||||||||
Total revenues |
$ |
96,888 |
100 |
% |
$ |
101,389 |
100 |
% |
$ |
(4,501) |
(4.4) |
% |
||||||||
Six Months Ended June 30, |
||||||||||||||||||||
(In thousands) |
2019 |
% of |
2018 |
% of |
$ Variance |
% Variance |
||||||||||||||
Ratings and Planning |
$ |
139,499 |
70.0 |
% |
$ |
140,070 |
67.6 |
% |
$ |
(571) |
(0.4) |
% |
||||||||
Analytics and Optimization |
38,751 |
19.5 |
% |
46,264 |
22.3 |
% |
(7,513) |
(16.2) |
% |
|||||||||||
Movies Reporting and Analytics |
20,932 |
10.5 |
% |
20,974 |
10.1 |
% |
(42) |
(0.2) |
% |
|||||||||||
Total revenues |
$ |
199,182 |
100 |
% |
$ |
207,308 |
100 |
% |
$ |
(8,126) |
(3.9) |
% |
View original content to download multimedia:http://www.prnewswire.com/news-releases/comscore-reports-second-quarter-2019-results-300897374.html
SOURCE
Media, Neil Ripley, Comscore, Inc., 646-746-0579, press@comscore.com; Investors, Robert Winters or Jackie Marcus, Alpha IR Group, 312-445-2870, SCOR@alpha-ir.com