Operator
Operator
Good day, and welcome to the comScore First Quarter 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Erica Abrams. Please go ahead, ma'am.
comScore, Inc. (SCOR)
Q1 2018 Earnings Call· Wed, May 9, 2018
$7.61
-2.87%
Same-Day
+5.09%
1 Week
+9.36%
1 Month
+19.49%
vs S&P
+16.13%
Operator
Operator
Good day, and welcome to the comScore First Quarter 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Erica Abrams. Please go ahead, ma'am.
Erica J. Abrams - comScore, Inc.
Management
Hello everyone. And thank you for joining us on the call today to discuss comScore's first quarter of 2018 financial results. Joining me on the call today is Bryan Wiener, CEO Elect; Bill Livek, President and Vice Chairman; and Greg Fink, CFO of comScore. Before we begin, please allow me to read the following disclaimer regarding our use of forward-looking information. During today's call, as well as during any question-and-answer period that may follow, representatives of the company may make forward-looking statements within the meaning of federal and state securities laws regarding future events, plans and expectations for the company. These forward-looking statements are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual events to differ materially and adversely from those set forth in or implied by forward-looking statements. These risks and uncertainties include without limitation those outlined in our SEC filings including our 10-K filed in March and our 10-Q to be filed this evening. These risks and uncertainties include expectations as to opportunities for comScore, new product lines, customers, products, markets and partnerships, expectations as to the strength and growth of comScore's business and financial performance, proceeds from any sales of stock or rights offering or other financial arrangements to be conducted by the company and the timing of the company's plans for relisting of its common stock. We caution you not to place undue reliance on any forward-looking statements, which speak only as of today. We do not undertake any obligation to publicly update any forward-looking statements to reflect new information after today's call or to reflect the occurrence of unanticipated events. During this call, we may also discuss certain non-GAAP financial measures. In our filings with the SEC, which you can find on our Investor Relations website, you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Thank you. I will now turn the call over to Bryan Wiener, CEO-elect. Brian, please go ahead.
Bryan Wiener - comScore, Inc.
Management
Thank you, Erica, and hello, everyone. Thank you for joining our 2018 first quarter financial results call. This is a great time to join comScore, and I am really humbled and honored to be here today as incoming CEO. I am joined by Bill Livek, Vice Chairman; and Greg Fink, CFO, who together with Bill led the effort to get our filings up to date and are preparing us for relisting on NASDAQ. Thank you both for your efforts. As many of you know, I've been on the Board of Directors for a little over six months and I have always been a big believer in comScore's offering and unique brand proposition. In the dozens of conversations I've had with partners and customers over the past six months, the feedback from the market has been remarkably consistent. Our customers want us to win. To quote a large media company I spoke with just last week and I quote here, "The advertising marketplace is better off with a strong comScore. We need comScore to be successful." I've been in this space for 25 years and it is extremely unusual for customers to care this much about any provider. Let me explain why this is the case with comScore. The advertising market today is in chaos because people are consuming content and advertising across the proliferation of screens, where the television set once had a near monopoly. So for example, if tonight you decided to start watching a network TV show on your home television and then finish the show the next day on your phone on the train. Advertisers would not be certain whether they're reaching one person watching on two different devices or two distinct people. This is a huge industry problem given marketers have sophisticated financial models that tie…
William P. Livek - comScore, Inc.
Management
Thank you, Brian, and welcome aboard. On our March Business Update call after our 10-K filing, I discussed many of the steps that the management team and the board have already begun to restore growth, improve profitability and maximize shareholder value. I'm pleased to report that we're making progress on these items. Greg will speak in more detail to the encouraging financial signals that the business is getting back on track. But first, I'd like to provide a brief update on our business in the first quarter. I'll speak to each of our core business lines, digital audience, advertising, TV cross platform, and of course, movies. Starting with digital audience, as discussed on our last call, sales and growth from this product portfolio has been challenged over the past several years, due to the challenging and changing industry dynamics and the mobile measurement complexity. We're continuing to make progress on our improved mobile coverage; In the first quarter alone, we upgraded our Media Metrix service in seven countries across four continents. These product upgrades provide greater reliability and utility for our customers. Just this month, we also launched comScore's Advanced Audiences in our flagship Media Metrix Multi-Platform, service allowing customers to understand audiences based on their interests and behaviors, as well as traditional metrics of age and gender. As Advanced Audience buying and selling across channels becomes more commonplace having Advanced Audience information in our core solutions is a business imperative. Within our digital audience business overall, we've begun to see some green shoots of growth both in revenue and average deal size among our premium video publisher and advertiser clients who are increasingly reliant on our syndicated and our custom solutions, like our benchmarker and consumer journey studies. A top three, United States on time – online retailer just…
Gregory A. Fink - comScore, Inc.
Management
Thanks, Bill and welcome, Brian. Hello, everyone. comScore adds an important transition in both our financial and operating model and I'm excited to be the CFO to help recreate this industry-leading company. As you know, we completed the filing of our 2017 10-K with the SEC in March and have applied for relisting on NASDAQ. As I said in March, relisting is a top priority from management and we hope to have that accomplished soon. We had a solid Q1 revenue performance at $105.9 million an increase of 5% year-over-year. As Bill noted, our digital audience revenue which is revenue from the measurement of digital consumers was mostly flat year-over-year at $57.8 million. While growth from our legacy products has been limited related to the ongoing shifts in the advertising market, as well as technical challenges in the mobile market, we have recently invested in data sources and mobile enhancements to drive market adoption with premium video publishers. In Q1, both revenue and our average deal size among our premium video publishers who use our mobile and video syndicated services as well as custom solutions showed an encouraging increases, offsetting declines from long tail media companies who moved their advertising inventory to programmatic as we have discussed in the past. To that end, we expect increased demand from our new products in this area to meaningfully offset declines in revenue from our legacy products over time. Our TV and cross platform revenue increased 15% year-over-year to $25.3 million, as we experienced solid demand from new customers as well as expanding interest in new solutions from existing customers. We believe that TV and cross platform revenue represents our greatest opportunity within our current products for future growth, but we intend to continue to invest in this area to increase our market…
Bryan Wiener - comScore, Inc.
Management
Thank you, Greg. I personally want to thank all of our customers and investors for their patience and support during these periods of change. I also want to thank our employees for their incredible commitment and perseverance. I look forward to working closely with all of you to build a stronger comScore that has core values of higher customer satisfaction, rapid technology innovation, strong employee morale and long-term shareholder value. Now we will open up the call for questions. Operator, please go ahead.
Operator
Operator
Thank you. The question-and-answer session will be conducted electronically. We will take our first question from Tim McHugh with William Blair. Please go ahead. Tim J. McHugh - William Blair & Company, LLC: Hi, thanks. Just want to ask follow-up on the comment about streamlining, I guess recognizing the – you're just kind of moving into the role and assessing things, but I guess what's your initial view of the opportunity, I guess a little more precisely and in the context of the actions that have already were kind of taken late in 2017 year I guess, what are you going to go more aggressively at during the next six months here?
Bryan Wiener - comScore, Inc.
Management
It's a good question. So, just to confirm, I'm starting May 30. So just to provide some context, but I have been a board member for six months and I think one of the things that is clearly evident is there is opportunity not only to streamline, but simplify the way that we do business and we believe by doing that, we will not only be able to take costs out of the company, but we will also be able to accelerate product innovation significantly, but I think given the fact that I haven't officially started yet, it would be premature to go into too much detail. I'm going to take the 60 days after I start to develop a plan and we expect in our August earnings call to provide a lot more detail on what we are doing and what we will be doing. Tim J. McHugh - William Blair & Company, LLC: Okay. Fair enough. And just one follow up, the comment strength in activation, I think at one point you also mentioned a large kind of contract, I guess, I know that business is probably lumpier than some of the other ones. But I guess, it was – was there a one-time kind of license fee or something or anything like that that we need to be aware of that that help drive the strength there or is there a broader kind of trend within activation that you're starting to see?
Bryan Wiener - comScore, Inc.
Management
No, it was not a one-time only contract. We think it's a good growth area for the company. So I'm happy with what's going on in that category. Tim J. McHugh - William Blair & Company, LLC: Okay. Great. Thank you.
Operator
Operator
And at this time, there are no further questions and that concludes our call for today. This conference call will be available on the Investor Relations section of the company's corporate website. Thank you for your participation, and you may disconnect at this time.