Sign in

You're signed outSign in or to get full access.

MS

MARIN SOFTWARE INC (MRIN)·Q2 2024 Earnings Summary

Executive Summary

  • Net revenue was $4.045M, down 7% YoY, with GAAP operating loss improving to $(2.087)M and non-GAAP operating loss to $(1.675)M; GAAP operating margin improved to (52%) and non-GAAP to (41%) .
  • Management highlighted that non-GAAP operating loss was “better than the high end of guidance,” driven by restructuring-driven opex reductions; revenue came in toward the low end of guidance .
  • Marin renewed its three-year Search Ads Innovation Agreement with Google starting Oct 1, 2024, with the same minimum quarterly payments and potential incremental payments if managed spend exceeds specified levels—an important strategic and financial visibility point .
  • Q3 2024 guidance: net revenue $4.0–$4.2M and non-GAAP operating loss $(2.1)–$(1.9)M; narrative centers on cost discipline and Ascend adoption to moderate revenue declines .

What Went Well and What Went Wrong

What Went Well

  • Renewed Google partnership with same minimum quarterly payments and potential incremental upside, supporting platform innovation and spend visibility: “renewed its strategic partnership agreement with Google for another 3 years... including the same minimum quarterly payments” .
  • Cost actions flowed through: non-GAAP opex down ~38% YoY, non-GAAP operating loss beat guidance; headcount reduced to 104 vs 172 a year ago .
  • Product momentum and AI initiatives: Ascend pacing and strategy upgrades, listing group support for Performance Max, ChatGPT-powered anomaly detection, and Advizer to improve marketer efficiency and control .

What Went Wrong

  • Revenue continued to decline: net revenue down 7% YoY; management cited churn outpacing new bookings as the primary driver .
  • Cash declined sequentially to $7.9M from $9.6M in Q1; management continues to explore financing and strategic transactions, highlighting capital needs .
  • Risk backdrop remains elevated: forward-looking caution includes going concern, dependence on publisher relationships, and macro ads spend uncertainty .

Financial Results

MetricQ4 2023Q1 2024Q2 2024
Revenue ($USD Millions)$4.350 $4.031 $4.045
GAAP Diluted EPS ($USD)$(0.29) $(0.80) $(0.65)
GAAP Operating Loss ($USD Millions)$(5.748) $(2.527) $(2.087)
GAAP Operating Margin %(132%) (63%) (52%)
Non-GAAP Operating Loss ($USD Millions)$(1.879) $(2.054) $(1.675)
Non-GAAP Operating Margin %(43%) (51%) (41%)
Adjusted EBITDA ($USD Millions)$(1.877) $(2.052) $(1.673)
Gross Profit ($USD Millions)$2.216 $2.288 $2.355
Cash and Cash Equivalents ($USD Millions)$11.363 $9.563 $7.942

Segment/geography mix:

MetricQ4 2023Q1 2024Q2 2024
U.S. Revenue Mix (%)80% 80% 81%
International Revenue Mix (%)20% 20% 19%

Selected KPIs:

KPIQ4 2023Q1 2024Q2 2024
Headcount108 106 104
Non-GAAP Operating Expenses ($USD Millions)$4.6 $4.4 $4.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue, net ($USD Millions)Q3 2024N/A$4.0 – $4.2 New
Non-GAAP Operating Loss ($USD Millions)Q3 2024N/A$(2.1) – $(1.9) New
Revenue, net ($USD Millions)Q2 2024$3.9 – $4.2 Prelim update: ~$4.0 Maintained range; actual within
Non-GAAP Operating Loss ($USD Millions)Q2 2024$(2.1) – $(1.8) Prelim update: $(1.9) – $(1.7) Narrowed; improved midpoint

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023, Q1 2024)Current Period (Q2 2024)Trend
AI/technology initiativesDebut anomaly detection; expanded scripts; enhanced support across publishers; budget optimization case studies In-grid pacing charts; strategy panel upgrades; ChatGPT anomaly detection; Advizer rollout; listing group support for Performance Max Building momentum; broader AI-enabled workflow integration
Google partnershipReliance on publisher relationships; ongoing co-opetition Three-year renewal starting Oct 1, 2024 with same minimum payments; potential incremental payments Improved visibility; potential upside tied to spend
Restructuring/cost savings$10–$13M annualized target; RIF completed; savings beginning in H2’23 On track; non-GAAP opex down 38% YoY; headcount down to 104 Savings realized; expense base aligned
Revenue trajectory/mixQ4 revenue $4.4M; Q1 $4.0M; mix ~80/20 U.S./Intl Q2 $4.0M within guidance; mix 81/19; decline moderating Stabilizing near ~$4M run-rate
Regulatory/legal backdropSubpoena-related expenses; antitrust investigations context Continued risk disclosures; subpoena-related non-GAAP adjustments Ongoing; low direct financial impact but headline risk

Management Commentary

  • “Marin is transforming how performance media buyers manage their spend allocation decisions... thanks in part to the renewal of our strategic partnership agreement with Google.” — CEO Chris Lien .
  • “Under the terms of the new agreement, we expect to recognize the same quarterly revenue payments from Google... and may also be able to earn incremental payments... if our managed spend exceeds specified levels.” — CFO Bob Bertz .
  • Ascend scope and adoption: “Ascend supports... LinkedIn, TikTok, Apple Search Ads, Amazon, Reddit, X... just under 1/4 of Marin’s customers are using Ascend’s functionality and we expect further adoption” — CEO .
  • Cost discipline: “Our non-GAAP operating loss was materially lower on a year-over-year basis, reflecting the benefits of our July 2023 restructuring” — CEO .

Q&A Highlights

  • The available transcript contains prepared remarks without a separate Q&A section; management clarified revenue coming in toward the low end of guidance, non-GAAP operating loss beating guidance, and detailed the Google agreement terms and potential incremental payments .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable for MRIN at this time due to missing mapping in the SPGI system. As a result, we cannot present consensus comparisons for revenue or EPS for Q2 2024. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • Cost actions are working: non-GAAP opex down ~38% YoY; non-GAAP operating loss beat guidance despite low-end revenue—sustained cost discipline remains the primary lever .
  • Top-line stabilization around ~$4.0M with mix ~80%+ U.S.; watch Q3 revenue range ($4.0–$4.2M) for signs of bookings/retention improvement vs churn .
  • Google partnership renewal (same minimum quarterly payments; potential incentives) adds multi-year visibility and optionality tied to managed spend; monitor activation/Ascend-driven spend capture .
  • Cash declined to $7.9M; management is exploring financing/strategic transactions—liquidity and runway remain a central risk to monitor near term .
  • Product cadence and AI features (Ascend pacing, listing groups, anomaly detection, Advizer) can drive adoption/renewals; track Ascend penetration (currently <25%) .
  • With consensus unavailable, price discovery may hinge on narrative items (Google agreement, cost control, product adoption) and sequential performance vs guidance.
  • Near-term trading: narrative skew positive on cost/guidance execution and Google agreement; risks include continued churn, liquidity needs, and macro ads spend variability .