Marin Software Incorporated
Q2 2021 Earnings Call Transcript

Published: 30 Jul 2021

[Operator:]

Greetings, and welcome to the Marin Software Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. . As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bob Bertz. Thank you, Bob. You may begin.

[Robert Bertz:]

Thank you. Good afternoon, everyone, and welcome to Marin Software's second quarter 2021 earnings conference call. My name is Bob Bertz, I'm Marin's CFO. And joining me today is Chris Lien, Marin's CEO. By now, you should have received a copy of our earnings release, which crossed the wire a short time ago. The release can also be obtained on our website at investors.marinsoftware.com. Call participants are advised that the audio of this conference call is being recorded for playback purposes, and that the recording will be made available on the Investor Relations section of our website within a few hours.

[Christopher Lien:]

Thank you, Bob. Good afternoon, everyone, and thank you for joining our call today. I'll share my observations on the quarter and provide an update on our initiatives to return Marin to growth. Bob will then provide additional detail on our second quarter and recent events and our outlook for the third quarter. As always, we remain committed to return Marin to growth and to maximize shareholder value. Our plan to achieve this is focused on delivering a leading cross-channel advertising management platform to enable brands and their agencies to grow and optimize returns from their online advertising investments. We call this platform MarinOne.

[Robert Bertz:]

Thank you, Chris. I'll provide an overview of our second quarter results and then share our forecast for the third quarter of 2021. I'll begin with a review of our income statement. For the second quarter of 2021, Marin generated $6.1 million in revenue, beating the high end of our guidance for the quarter by approximately $0.1 million, primarily due to higher search revenue as a result of improved retention. Second quarter revenue was down 16% when compared to total revenue for the second quarter of 2020. While we continue to see a lingering impact of COVID-19 on our revenue, customer spend has largely returned to pre-COVID levels in most segments. Our geographic split for revenue in the second quarter was approximately 77% U.S. and 23% international. Moving on to our operating results. As a reminder, our financial statements and a reconciliation of our GAAP to non-GAAP financial measures can be found in our earnings release issued earlier today. Our non-GAAP operating loss was $2.8 million for the second quarter of 2021 as compared to a $3.6 million loss for the second quarter of 2020. The $2.8 million non-GAAP operating loss in Q2 beat the high end of our guidance by approximately $0.1 million. Our non-GAAP operating loss excludes $500,000 in savings from an employee retention credit under the CARES Act that we recorded in the current quarter. We expect to record a credit of a similar amount in the third quarter as well. Our non-GAAP operating expenses were down 14% in Q2 on a year-over-year basis. We ended the quarter with 153 total headcount versus 211 a year ago. We will continue to carefully monitor our operating expense base. In terms of our balance sheet, we ended the quarter with a total cash balance of $14.4 million, representing a net decrease in cash of $800,000 from our Q1 balance. In July of 2021, we registered a new $40 million at-the-market securities offering facility. Using this facility, we have sold 4.3 million shares of our common stock in July resulting in approximately 15.5 million shares currently outstanding, and we generated proceeds of $38.8 million, net of offering costs. We now have a cash balance in excess of $50 million which strengthens our balance sheet and enables us to make targeted investments in our product and sales and marketing teams and to execute on our return to growth strategy. Moving on to our outlook for the third quarter. For Q3 2021, we expect revenues to be in the range of $5.5 million to $6 million, and our non-GAAP operating loss is expected to be in the range of $3.3 million to $2.8 million. Our guidance excludes the estimated $500,000 in savings from the employee retention credit expected for the third quarter. This concludes our call for today. Thank you for your time, and we look forward to updating you again during our Q3 2021 earnings call.

[Operator:]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

[End of Q&A:]