FOURTH QUARTER 2018 QUARTERLY REVIEW FEBRUARY 26, 2019

Transcription

1 FOURTH QUARTER 2018 QUARTERLY REVIEW FEBRUARY 26, 2019

2 Safe Harbor Statement This presentation is for informational purposes only and is not an offer to sell securities or a solicitation of an offer to buy any securities, and may not be relied upon in connection with the purchase or sale of any security. Sales and offers to sell Telaria, Inc. securities will only be made in accordance with the Securities Act of 1933, as amended, and applicable SEC regulations, including written prospectus requirements. This presentation contains forward-looking statements that involve risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those set forth in or implied by such forward-looking statements. All statements other than statements of historical fact contained in this presentation are forward-looking statements, including, but not limited to, statements related to Telaria s future financial results, growth potential, or future profitability, including 2019 first quarter and full year financial guidance and statements with respect to the development or adoption of the company s solutions. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expects, plans, anticipates, believes, estimates, predicts, potential, or continue or the negative of these terms or other comparable terminology. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. These forward-looking statements are subject to a number of risks, including those described under the heading Risk Factors and elsewhere in Telaria s filings with the Securities and Exchange Commission (the SEC ), including its Annual Report on Form 10-K, filed with the SEC on March 2, 2018, its Form 10-Q for the period ended March 31, 2018, filed with the SEC on May 8, 2018, its Form 10-Q for the quarter ended June 30, 2018, filed with the SEC on August 9, 2018, its Form 10-Q for the quarter ended September 30, 2018, filed with the SEC on November 8, 2018, and future filings and reports by the company, including its Annual report on Form 10-K for the year ended Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation.

3 Strategic Highlights Q revenue increased 31% to $19.7 million and Adjusted EBITDA (1) of $4.0 million, resulting in a 20% Adjusted EBITDA margin Increased Full Year Revenue 26% to $55.2 million and Adjusted EBITDA loss of ($0.4) million Expanded our Agency and Brand sales team, more than doubling its size and geographic reach Added Cheddar and Outside TV to Telaria s roster of leading CTV clients Bolstered our presence in Asia Pacific region with the addition of Astro, Malaysia s top media broadcaster and FPT Television, Vietnam s leading pioneer of IPTV services Renewed Hulu partnership as programmatic platform of record Launched TV Content Reporting toolset and Advanced Ad-Podding Suite to help CTV publishers maximize revenue and optimize the consumer and advertiser experience Continued strength in CTV in Q4 18 with CTV revenue up 232%, representing 33% of revenue (1) Adjusted EBITDA is a non-gaap financial measure. Please see the discussion in the section called Non-GAAP Financial Measures and the reconciliation included at the end of this presentation.

4 CTV & ecpm Trends CTV revenue growth drives increase in ecpm 35% 33% 30% 25% 24% 25% % YoY Growth $ % 20% 10.0 $ % 13% % 5% 0% 0% 0% 1% 1% 4% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 5% 6% Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4' Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 CTV Revenue Percentage Quarterly ecpm

5 Enhancements to Telaria s CTV Suite of Tools TV Content Reporting A first-to-market tool that provides publishers with granular insight into the bidding & buying patterns of individual shows, episodes, duration, content categories Advanced Ad-Podding Suite Enhanced competitive separation, audio normalization, viewer frequency capping and custom advertiser blocking

6 Delivering Growth Through Execution Technology Premium CTV = = = Become Essential Differentiate Diversify Revenue The Only Independent Video Management Platform at Scale

7 FINANCIALS

8 Fourth Quarter Financial Summary FOURTH QUARTER & FULL YEAR RESULTS ($ millions) Q Q % Change FY 2018 FY 2017 % Change Revenue $19.7 $ % $55.2 $ % Gross Profit $16.8 $ % $48.3 $ % Gross Margin 85.7% 93.3% 87.6% 92.1% Adjusted EBITDA (1) $4.0 $3.0 32% ($0.4) ($6.5) NM (1) Adjusted EBITDA is a non-gaap financial measure. Please see the discussion in the section called Non-GAAP Financial Measures and the reconciliation included at the end of this presentation.

9 2018 Core Operating Expenses (1) Public Company Costs Professional Fees 6% 4% Occupancy & Office Overhead 11% Information Technology 2% Marketing 3% People 73% (1) Core operating expenses excludes stock based compensation and depreciation and amortization

10 Strong Liquidity & Capital Resources December 31, 2018 ($ millions) Cash & Cash Equivalents $47.7 Total Current Assets $155.5 Total Current Liabilities $113.4 Working Capital $42.1 Unused Credit Facility $25.0 CAPITAL RESOURCES $67.1

11 Guidance FIRST QUARTER AND FULL YEAR 2019 ($ millions) Q FY 2019 Revenue $ $12.5 $ $67.0 Adjusted EBITDA (1) ($3.5) ($3.0) $1.0 $4.0 (1) Adjusted EBITDA is a non-gaap financial measure. Please see the discussion in the section called Non-GAAP Financial Measures

12 APPENDIX

13 Non-GAAP Financial Measure To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles ( GAAP ), Telaria reports Adjusted EBITDA, which is a non-gaap financial measure. We define Adjusted EBITDA as income (loss) from continuing operations, net of income taxes before depreciation and amortization, total interest expense and other income (expense), net, provision (benefit) for income taxes and adjusted to eliminate the impact of non-cash stock-based compensation expense, acquisition related costs, restructuring costs, markto-market expense, executive severance, retention and recruiting costs, disposition related costs, expenses for transitional services and other adjustments. We use Adjusted EBITDA for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that the use of Adjusted EBITDA provides useful information about our operating results, enhances the overall understanding of our past financial performance and future prospects, and allows for greater transparency with respect to a key metric that is used by management in its financial and operational decision making. Non-GAAP financial measures should be considered in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. With respect to our expectations under Guidance above, reconciliation Adjusted EBITDA guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the costs and charges excluded from this non-gaap measure, in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of these costs and charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

14 Non-GAAP Reconciliation Telaria, Inc. Reconciliation of Net Loss from Continuing Operations to Adjusted EBITDA (in thousands) (unaudited) (1) Includes sublease income for our former office locations net of rent expense for those same locations. In addition, includes income received from the transfer of rights in the name "Tremor Video". (2) For the three months and year-ended December 31, 2018, reflects acquisition-related costs incurred in connection with our acquisition of SlimCut Media ("SlimCut") in June For the three months and year-ended December 31, 2017, reflects acquisition-related costs incurred in connection with the acquisition of The Video Network Pty Ltd ("TVN"). (3) Reflects the estimated fair value of costs related to the relocation of office space following the sale of our buyer platform. (4) For the three months and year-ended December 31, 2018, reflects expense incurred based on the re-measurement of the estimated fair value of earn-out payments that were paid in connection with the acquisition of SlimCut and for the year-ended December 31, 2017, reflects expense incurred based on the re-measurement of the estimated fair value of earn-out payments that were paid in connection with the acquisition of TVN. (5) For 2018 and 2017, reflects certain executive severance, recruiting and retention costs. (6) Reflects professional fees incurred in connection with the sale of our buyer platform in August (7) Reflects costs incurred providing transitional services following the sale of our buyer platform. (8) For the three months and year-ended December 31, 2018, includes rent expense for our current corporate headquarters during the period of time in which such space was unoccupied as well as expenses relating to the reversal of certain capitalized professional fees. For the three months and year-ended December 31, 2017, reflects amounts accrued in connection with a one-time change in our employee vacation policy.