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Financial Results
Financial Highlights for the Year Ended December 31, 2009
| (in thousands USD) | ||||
|
2009 (unaudited) |
2008 (unaudited) |
% Change |
Organic** 2009 (unaudited) |
|
|---|---|---|---|---|
| Adjusted Revenue* | $ 89,965 | $ 49,521 | 82% | $ 88,950 |
| Adjusted EBITDA* | $ 26,855 | $ 6,969 | 285% | $ 30,174 |
| * We present Adjusted Revenue and Adjusted EBITDA as a supplemental measure of our performance. Adjusted Revenue excludes $12.5 million in revenue and cost of revenue for 2008 which we recognized as gross rather than net revenues in connection with fees for media and other advertising production costs incurred on behalf of two customers for their mobile marketing and advertising campaigns. Adjusted EBITDA is defined as net income (loss) 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 general and administration charges of $0.5 million (accrued litigation settlement) and $2.8 million (redomiciliation exercise, and professional fees associated with our consideration of corporate opportunities) for 2008 and 2009, respectively. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) before non-controlling interest: | ||||
| 2009 | 2008 | |
|---|---|---|
| Net income (loss) before non-controlling interest | $ 6,264 | $ (6,253) |
| Adjustments: | ||
| Income tax (benefit) expense | $ 410 | $ (26) |
| Interest expense | $ 2,370 | $ 1,155 |
| Loss from equity method investments | $ 2,223 | $ 2,456 |
| Foreign exchange (gains) losses | $ (14) | $ 1,665 |
| Depreciation and amortization | $ 11,522 | $ 5,446 |
| Non-cash share based compensation | $ 1,292 | $ 2,031 |
| Non-recurring G&A expenses | $ 2,788 | $ 495 |
| Adjusted EBITDA | $ 26,855 | $ 6,969 |
| **Organic figures exclude Ad Infuse which we acquired in May 2009. | ||
Operational highlights for 2009
- Revenue growth and improving margins due to the adoption of Velti’s performance-based solutions and its Software-as-a-Service (SaaS) model;
- Continued investment in Velti’s global footprint, resulting in customer growth in China, India, U.S. and Europe through local operations, joint ventures and equity investments in each geography;
- The impact of Velti’s enhanced sales and marketing and business development operations has led to growth in sales. During 2H 2009 Velti continued to gain new customer wins and create increased sales pipeline opportunities;
- In greater China, Velti continued to expand its investment in CASEE, and as a result, began penetrating the Chinese market. In addition, the company’s joint venture with India’s HT Media launched its first campaigns in June;
- In May, Velti completed the acquisition of Ad Infuse, a leading U.S. mobile ad network, with 31 employees based in San Francisco, New York and London;
- Velti’s platform evolved to incorporate technology acquired from Ad Infuse to create the first online, fully integrated mobile marketing and advertising platform. Velti mGage™, launched at beginning of 2010, is built on a modular architecture designed to handle the full cycle of mobile marketing and advertising;
- In October, the company announced its redomiciliation in Jersey, the change will allow Velti to act quickly and decisively with respect to market opportunities and pressures, while providing a more effective structure for its worldwide business;
- The Management Team and Board of Advisors has grown throughout 2009 to encompass new CFO Wilson Cheung from AXT Inc., former Ogilvy chief Mike Walsh, Dakota Sullivan joining as VP of Global Marketing from BlueLithium, ex-DoubleClick CEO David Rosenblatt and Jack Plating joins Velti as a member of the company’s Advisory Board. He most recently served as EVP and COO of Verizon Wireless.