DUBLIN, Ireland, Sept. 30, 2010 (GLOBE NEWSWIRE) -- Velti (LSE:VEL), a leading global provider of mobile marketing and advertising technology, today reported its interim financial results for the first half of 2010. The Company benefited from increasing demand for its technology and services from existing and new customers.
"Momentum continued to build for Velti's products and services in the first half of 2010. Increasing demand from existing and new customers of Velti and our joint ventures resulted in campaigns for 545 clients, of which 150 are new clients added since the beginning of the year, including Samsung, Coke, Canon, Lenovo, Paramount, Shell, Mars, Bharti, Movistar and Google," said Alex Moukas, CEO of Velti.
The Board is very pleased with Velti's performance in the first half, during which the Company achieved considerable momentum going into the second half of 2010. In 2009, changes in reporting caused the results for 2009 to be particularly skewed to the second half of that year. While Velti has always been seasonally stronger in the second half, the Company expects in 2010 a more historical revenue split than the significant second half year increase that was experienced in 2009.
Financial Highlights for the First Half of 2010 Ended June 30, 2010 and Full Year 2009
* We present Adjusted EBITDA as a supplemental measure of our performance. Adjusted EBITDA is defined as net income (loss) before non-controlling interest plus (i) income tax expense (benefit), (ii) interest expense, (iii) loss in equity investments, (iv) foreign exchange gains (losses), (v) depreciation and amortization, (vi) non-cash share-based compensation, and (vii) non-recurring expenses. Refer to footnotes below on reconciliation from net income (loss) before non-controlling interest to Adjusted EBITDA.
Key Growth Drivers for First Half of 2010
Velti's growth in the first half of 2010 reflects a combination of:
- revenue growth continued across all business lines including the continued adoption of Velti's Software-as-a-Service (SaaS) model;
- increased spending in the mobile medium by advertisers and marketers; and
- increased smartphone adoption (iPhone, Android, Blackberry) by consumers.
Statement of the Chairman and Chief Executive Officer
Introduction
During the first half of 2010, Velti benefited from demand for its technology and services from existing and new customers, who are increasingly turning to mobile advertising and marketing as a way to engage and retain consumers, and measure and optimize traditional media expenditure.
Financial Performance
For the first half of 2010, the Company's total revenues were $38.2 million, an increase of $24.1 million (or 170%) as compared with $14.1 million for the first half of 2009.
The Company's revenue growth results from its continuing strong relationships with mobile operator and advertising agency customers as well as its ability to develop new relationships with brands and advertising agencies in developed and emerging markets.
In connection with the Company's proposed public offering in the United States, it has converted from reporting its financial results under IFRS to reporting its financial results in accordance with US GAAP. In addition, the Company has for the first time reviewed its historic results on a quarterly basis, having previously determined and reported half and full year results only. As a result of each of these exercises, in its US GAAP-based results, the Company deferred a portion of the revenue previously reported under IFRS for the six months ending June 30, 2009 to the second half of 2009. The Company did not experience the same large deferral for 2010. Accordingly, the increase in revenue for the six months ended June 30, 2010 compared to the six months ended June 30, 2009 is enhanced. After the completion of the transformation of its financial statements and its contracts to US GAAP, the Company expects its revenue seasonality to return to its historic levels.
David Mann, Non-Executive Chairman commented:
"The mobile medium is increasingly attractive to wireless carriers, brands and agencies around the world as a highly effective and measurable marketing and advertising strategy. Our business momentum, geographic expansion, and revenue growth are evidence of the traction being gained in this innovative channel."
Alexandros Moukas, Chief Executive Officer added:
"Velti continues to enjoy significant organic revenue growth and improved EBITDA as a result of its broad offering of software solutions in its mGage technology platform that offers precisely targeted, interactive and measurable marketing and advertising campaigns to its customers."
Operational Review
Introduction
The Company is a leading global provider of mobile marketing and advertising solutions that enable brands, advertising agencies, mobile operators and media to implement highly targeted, interactive and measurable campaigns by communicating with and engaging consumers via their mobile devices. Its platform allows its customers to use mobile and traditional media to contact targeted consumers, engage the consumer through the mobile internet and applications, convert them into customers and continue to actively manage the relationship between the brand and the consumer through the mobile channel.In the first half of 2010, over 500 brands, advertising agencies, mobile operators and media companies, including 11 of the 20 largest mobile operators worldwide, used its platform to conduct over 1,200 campaigns. The Company has the ability to conduct campaigns in over 35 countries and reach more than 2.75 billion global consumers.
The Company believes its integrated, easy to use, end-to-end platform is one of the most extensive mobile marketing and advertising campaign management platform in the industry. Whether the goal of the mobile campaign is to raise brand awareness, acquire new customers, increase loyalty or revenues, its platform enables brands, including mobile operators, and advertising agencies, to plan, execute, monitor and measure mobile marketing and advertising campaigns in real time throughout the campaign lifecycle. In addition, its platform enables the execution of campaigns that are not just driven by mobile media, but also seek to incorporate traditional media such as television, print, radio and outdoor advertising.
During the first half of 2010, the Company continued the global roll-out of the enhanced version of its proprietary platform, Velti mGage™, which provides a one-stop-shop where its customers may plan marketing and advertising campaigns. They can also select advertising inventory, manage media buys, create mobile applications, websites and widgets, build mobile CRM campaigns and track performance across their entire campaign in real-time.
The Company believes the mobile device is emerging as the principal interactive channel for brands to reach consumers since it is the only media platforms that has access to the consumer virtually anytime and anywhere. This is further driven by the continued growth of wireless data subscribers, the proliferation of mobile devices, smart phones and advanced wireless networks, and the increased provision of third party mobile content, applications and services. Increasingly, brands and advertising agencies are recognizing the unique benefits of the mobile channel and they are seeking to maximize its potential by integrating mobile media within their overall advertising and marketing campaigns. Its platform allows its customers to focus on campaign strategy, creativity and media efficiency without having to worry about the complexity of implementing mobile marketing and advertising campaigns globally.
As of the first half of 2010, the Company has 506 employees globally excluding its joint ventures, with 134 in the critical area of sales, marketing and business development, and 212 engineers and software developers.
Company Strategy
The Company's objective is to be the leading global provider of mobile marketing and advertising solutions across multiple media. The Company intends to make it easier and more cost effective for brands, advertising agencies, mobile operators and media companies to take advantage of the unique benefits of mobile marketing and advertising campaigns, thereby further facilitating the growth in this market. The principal elements of its strategy are:
- The Company intends to capitalize on its deep, trusted customer relationships to broaden the adoption of its solutions as their mobile marketing and advertising budgets and campaign requirements increase over time. The Company also intends to aggressively acquire new customers, educating them regarding the benefits of mobile marketing and advertising, the breadth and uniqueness of our solutions, and its ability to satisfy their global marketing and advertising campaign requirements.
- Advertising agencies provide important strategic advice to brands on the execution of marketing and advertising strategies while brands often delegate control to an advertising agency over a significant portion of the brand's marketing and advertising budget. The Company intends to continue to build and deepen its relationships with advertising agencies by continuing to increase its dedicated agency sales force, to enable the Company to accelerate the acquisition of new brands and deepen its relationships with existing brand and media customers.
- Mobile marketing enables brands and advertising agencies to engage and build long-term relationships with consumers, which the Company believes causes market opportunity for mobile marketing to be greater than the market for mobile advertising. Its fully integrated marketing and advertising platform allows its customers to use both mobile and traditional media to reach targeted consumers, engage consumers through the mobile internet and applications, convert consumers into customers by triggering a desired action and actively manage the relationship with the consumer through the mobile channel. By focusing on the entire campaign lifecycle, the Company is positioned to take advantage of the significant marketing budget dedicated to maintaining customer relationships and marketing additional goods and services to existing customers.
- . The Company believes the mobile device marketplace by its nature undergoes constant change as new technologies and products emerge. In particular, the Company believes that smartphone devices as well as tablet computers with mobile capabilities are growing and important components of mobile communications. The Company devotes significant resources to address this evolving technology landscape with robust application interfaces for its platform that ensure it will be able to address the mobile marketplace as consumer device preferences evolve.
- The Company believes that the technical capabilities of its platform significantly surpass the ability of its competitors to provide brands, advertising agencies, mobile operators and media companies a comprehensive view of a consumer's interaction and engagement across a variety of media. The Company's recent research and development activities have been focused on enhancements to its platform, resulting in the release of its Velti mGage platform, an online, fully integrated end-to-end mobile marketing and advertising platform launched in January 2010. The Company intends to continue to invest in, and enhance the functionality of Velti mGage and develop new technology solutions to further strengthen and broaden its end-to-end platform. Generally, the Company targets new releases of its software every eight weeks to meet the evolving needs of its customers and address potential new customers and markets.
- The Company's Velti mGage platform provides a scalable, open architecture platform with application programming interfaces, or APIs, that allows third parties, including content delivery platform providers, application providers, campaign optimization specialists, mobile ad networks, and analytic and billing providers, to use the Velti mGage platform to execute marketing and advertising campaigns as well as to create new business opportunities and technology innovations. The Company has designed its platform to become central to the creation of a connected, global mobile marketing and advertising marketplace, and it believes that this platform will form the basis for a global mobile marketing and advertising ecosystem.
- The Company intends to continue its geographic expansion into additional markets over time as needed in order to support its current and prospective customers and to expand our business. In addition, the Company will continue to evaluate and pursue strategic partnerships and acquisitions to further strengthen its platform, increase its geographic presence, expand relationships and enter into adjacent markets. Examples of what the Company has completed include its:
Global Expansion Continues
In the first half of the year, the Company continued to gain traction in greater China through its investment in CASEE, adding more than 150 new clients for Velti and its joint ventures, including Samsung, Coke, Canon, Lenovo, Paramount, Shell, Mars, Bharti, Movistar and Google. In addition, its joint venture with India's HT Media has launched more than 100 unique campaigns for over 50 unique brands such as Samsung, Blackberry, McDonald's, and Coca-Cola.
Acquisition of Media Cannon
In June 2010, the Company completed the acquisition of Media Cannon, a developer of mobile advertising tools and technology. The acquisition brings Velti new US-based strategic customers including Tier-1 wireless carriers and additional premier advertising agencies and brands that were not already customers of Velti, further increasing Velti's US footprint.
Launch of Velti mGage 8.0™
During the first half of 2010, the Company enhanced its mGage platform with the launch of version 8.0, unifying mobile media planning, mobile advertising, mobile marketing and mobile CRM, giving its customers far easier access to a wide range of mobile capabilities on a self-service basis.
The Company has continued to expand and develop its management team as the business grows and expands internationally
Sally Rau has joined Velti from DLA Piper, one of the world's leading legal services providers with 3,500 lawyers located in 30 countries and 69 offices throughout Asia, Europe, the Middle East and the U.S. She brings over twenty-five years of experience as a corporate and securities lawyer. As a partner at DLA, Sally focused on public company representation, corporate governance, capital markets and mergers and acquisitions — and also served as lead outside counsel for Velti. During her tenure at DLA, Sally represented a number of high technology and emerging growth companies in public and private offerings, mergers and acquisitions transactions, and general corporate governance and securities laws matters.
As Chief Administrative Officer and General Counsel at Velti, she will focus on the company's day to day administration, corporate governance, legal and global compliance matters. Sally holds a J.D. from the University of Oregon and an A.B. from the University of California, Berkeley.
Ian Arthurs has joined Velti after three years at Google, where he led sales and account management for Travel and Retail verticals. Ian's global teams delivered and optimized innovative online marketing strategies for high growth clients, and in doing so helped define Google's US AdWords service model. Ian has over ten years of marketing experience in top-tier consumer brand management and strategy consulting. As VP of Customer Development at Velti, Ian will lead vertical proposition development, U.S. account management, and U.S. ad operations. He has an MBA from Tuck School of Business, Dartmouth College, and an M.A. from University of Glasgow.
VELTI PLC
Notes to Financial Statements
The financial information in this announcement does not constitute statutory financial statements as defined in Article 102 of the Companies (Jersey) Law 1991. Copies of the Company's annual report and financial statements are available at the registered office of the Company: First Floor, 28-32 Pembroke Street Upper, Dublin 2, Republic of Ireland or can be downloaded at the Company's website at .
Reconciliation to Adjusted EBITDA
Set forth below is a reconciliation of net loss before non-controlling interest to Adjusted EBITDA:
Non-recurring expenses in 2009 included G&A expenses with respect to our redomiciliation exercise and professional fees associated with our consideration of corporate opportunities.
Principles of consolidation
The accompanying consolidated financial statements include the results of Velti plc and all subsidiaries that we control. Intercompany accounts and transactions have been eliminated. Investments in companies in which we own 20% to 50% of the voting stock or have the ability to exercise significant influence over operating and financial policies of the investee are accounted for using the equity method of accounting and, as a result, our share of the earnings or losses of such equity affiliates is included in the statement of operations.
Revenue Recognition
We recognize revenue when all of the following conditions are satisfied: (i) persuasive evidence of an arrangement exists, (ii) service has been delivered, (iii) fee is fixed or determinable, and (iv) collectability of the fee is reasonably assured. The timing of revenue recognition in each case depends upon a number of factors, including the specific terms of each arrangement, the nature of our deliverables and obligations, and the existence of evidence to support recognition of our revenue as of the reporting date. If we determine that any one of the four criteria is not met, we will defer recognition of revenue until all the criteria are met.
Share‑Based Payments
Compensation expense related to shared‑based payment, including employee and director share‑based awards, is estimated using the Black‑Scholes option valuation model at the date of grant based on the share awards fair value and is recognized as expense over the requisite service period, using the "graded vesting attribution method" which allocates expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards.
We account for share options issued to non-employees and employees of our joint ventures using the fair value approach. The value of share options issued for consideration other than employee services is determined on the earlier of (i) the date on which there first exists a firm commitment for performance by the provider of goods or services, or (ii) on the date performance is complete, using the Black‑Scholes option valuation model. The compensation costs of these arrangements are subject to re-measurement over the vesting terms as earned.
Net Income (Loss) per Share
Basic net income (loss) per share is calculated by dividing the profit attributable to equity holders by the weighted average number of ordinary shares outstanding during the year. Diluted net income per share is computed by including all potentially dilutive ordinary shares, deferred share awards and share options. For the six months ended June 30, 2010 and 2009, deferred share awards and share options were not included in the computation of diluted net loss per share because the effect would have been anti-dilutive.
About Velti
Velti is a leading global technology provider of mobile marketing and advertising solutions that enable brands, advertising agencies, mobile operators and media to implement highly targeted, interactive and measurable campaigns by communicating with and engaging consumers via their mobile devices. Our technology platform, called Velti mGage, allows customers to use mobile and traditional media to reach targeted consumers, engage the consumer through the mobile internet and applications, convert them into customers and continue to actively manage the relationship through the mobile channel. In the first half of 2010, over 500 brands, advertising agencies, mobile operators and media companies have used our platform to execute more than 1,200 campaigns, reaching consumers in more than 35 countries. Velti is a publicly-held corporation based in Jersey which trades on the London Stock Exchange's AIM under the symbol VEL. For more information, visit .
The Velti logo is available at
CONTACT: Bankside Consultants Simon Bloomfield +44 (0) 207 367 8861 simon.bloomfield@bankside.com The Blueshirt Group Mike Bishop +1 (415) 217 4968 mike@blueshirtgroup.com RBC Capital Markets (NOMAD and Broker) Joshua Critchley Matthew Coakes Brett Jacobs +44 (0) 207 653 4000 Velti plc Alex Moukas, Chief Executive Officer +1 (415) 315 3400 Wilson Cheung, Chief Financial Officer +1 (415) 315 3480 Dakota Sullivan, VP Global Marketing +1 (415) 315 3436 dsullivan@velti.com