REDWOOD CITY, Calif.--(BUSINESS WIRE)--

YuMe, Inc. (NYSE: YUME), a proven partner for video advertising leadership and innovation, today announced its financial results for the second quarter ended June 30, 2017 and a quarterly cash dividend of $0.03 per share of common stock.

“We are very pleased to report that in the second quarter, we returned to revenue growth, significantly reduced operating expenses, generated positive net income and exceeded our prior adjusted EBITDA guidance. We continue to benefit from the strength in our programmatic business and are solidifying our position through industry leading innovation such as our connected TV initiatives,” said Paul Porrini, Chief Executive Officer. “Our continued focus on operational efficiency helped make the first half of 2017 the most profitable first half of the year in the Company’s history. Our second quarter, and year to date results show that we can tune our expense profile to achieve profitability while executing against our financial and strategic goals. We are building on this momentum and our third quarter outlook combined with our quarterly dividend payments illustrate our continued confidence in the financial strength of the business and our commitment to delivering shareholder value.”

Financial highlights for second quarter 2017:

• Revenue of $42.8 million, compared to $40.7 million in the second quarter of 2016 (Q2 2016);
  • Revenue from top 20 advertising customers of $21.9 million;
  • Mobile, tablet and connected television impressions accounted for 64% of revenue;
  • Programmatic revenue¹ was $11 million;
• Gross margin of 50.9%, compared to 50.6% in Q2 2016;
• Net income of $4.4 million, or $0.12 per diluted share, compared to net loss of $2.5 million, or $0.07 per diluted share, in Q2 2016;
• Adjusted EBITDA² of $7.6 million, compared to adjusted EBITDA of $2.3 million in Q2 2016;
• $73.9 million in cash, cash equivalents and marketable securities and no debt as of June 30, 2017.

Dividends

In June 2017, YuMe declared a special cash dividend of $1.00 per share and a quarterly cash dividend of $0.03 per share. Both dividends totaled $35.6 million and were paid on July 7, 2017 to stockholders of record as of the close of business on July 3, 2017.

YuMe’s Board of Directors has declared a quarterly cash dividend of $0.03 per share of common stock to be paid on October 9, 2017 to all common stockholders of record as of September 29, 2017. Future dividends are subject to the determination of YuMe’s Board of Directors.

Strategic Alternatives Update

YuMe continues to work with Deutsche Bank as its financial advisor to assist in evaluating the Company’s value-enhancing initiatives. The Company will provide an update to this process when it determines that further disclosures are appropriate.

¹ Programmatic revenue relates to programmatic buying through the automated purchase of digital advertising inventory through a combination of machine-based transactions, data and algorithms.

² Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude income taxes, interest expense, depreciation and amortization, stock-based compensation and certain non-recurring expenses when they occur including proxy contest, asset impairment and restructuring costs. We believe that adjusted EBITDA provides useful information to investors in understanding and evaluating our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information of other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income prepared in accordance with GAAP as a measure of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made.

Business Outlook

For the third quarter of 2017, the Company expects adjusted EBITDA in the range of $3.5 million to $5.0 million.

Conference Call and Webcast Information

Senior management will host a conference call at 5:00 p.m. ET today to discuss the Company’s results. Investors may access the live call by dialing (866) 393-4306 or (734) 385-2616. A replay will be available through Tuesday, August 15 at (855) 859-2056 or (404) 537-3406. (Conference ID: 47801413). A live and archived Webcast of the call will be available at http://investors.yume.com.

About YuMe

YuMe, Inc. (NYSE: YUME) is a leading provider of global audience technologies, curating relationships between brand advertisers and consumers of premium video content across a growing range of connected devices. Combining data-driven technologies with deep insight into audience behavior, YuMe offers brand advertisers end-to-end marketing software that establishes greater brand resonance with engaged consumers. It is the evolution of brand advertising for an ever-expanding video ecosystem. YuMe is headquartered in Redwood City, California, with worldwide offices. For more information, visit YuMe.com/pr, follow @YuMeVideo and like YuMe on Facebook.

YuMe is a trademark of YuMe, Inc. All other brands, products or service names are or may be trademarks or service marks of their respective owners.

Forward-Looking Statements

This press release, conference call and webcast of the same date contain forward-looking statements regarding future events and our future financial performance. All statements other than statements of historical fact are statements that could be forward-looking statements, including, but not limited to our Business Outlook, statements about our growth strategy, the impact of restructuring and cost saving initiatives, potential merger and acquisition activity, the impact of management changes, our operating results, financial goals for 2017, market trends, and quotations from management. These forward-looking statements are subject to risks and uncertainties, assumptions and other factors that could cause actual results and the timing of events to differ materially from future results that are expressed or implied in our forward-looking statements. Factors that could cause or contribute to such differences include adaptation to new, changing and competitive technologies and trends in a dynamic market, changes to our management, competitive trends in a dynamic market, our history of net losses and limited operating history, which make it difficult to evaluate our prospects, our fluctuating quarterly results of operations, risks associated with margin shifts in the industry and our dependence on a limited number of customers in a highly competitive industry. These and other risk factors are discussed under “Risk Factors” in YuMe’s Annual Report on Form 10-K for the year ended December 31, 2016 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 that have been filed with the U.S. Securities and Exchange Commission (the “SEC”), and in our future filings and reports with the SEC. The forward-looking statements in this press release are based on information available to YuMe as of the date hereof, and YuMe assumes no obligation to update any forward-looking statements.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we report in this press release and on our webcast adjusted EBITDA, which is a non-GAAP financial measure. We calculate adjusted EBITDA as net income (loss), excluding income taxes, interest expense, depreciation and amortization, stock-based compensation and certain non-recurring expenses when they occur including proxy contest, asset impairment and restructuring costs. We believe that adjusted EBITDA provides useful information to investors in understanding our operating results in the same manner as management and the board of directors. This non-GAAP information is not necessarily comparable to non-GAAP information presented by other companies. Non-GAAP financial information should not be viewed as a substitute for, or superior to, financial information prepared in accordance with GAAP. Users of this non-GAAP financial information should consider the types of events and transactions for which adjustments have been made.

We have included adjusted EBITDA in this release and on our webcast because it is a key measure we use 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. In particular, we believe that adjusted EBITDA can provide a useful measure for period-to-period comparisons of our operating results because it excludes some expenses that may mask underlying trends.

In the tables following the financial statements attached to this press release, the non-GAAP financial measures used in this press release are reconciled to the most directly comparable GAAP financial measures.

(1) The condensed consolidated balance sheet as of December 31, 2016 was derived from audited financial statements.

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