Moukas: “2013 would be a transitional year”Mobile marketing firm Velti has confirmed a 22 per cent reduction in headcount, because it announced disappointing results for Q1, 2013. The corporate reported a net lack of $156.4m (£102m) for the quarter, compared with $8.8m in Q1, 2012.
According to newly-appointed CFO Jeffrey Ross, speaking during Velti’s earnings call, the loss is “fundamentally as a result of lower-than-expected results within our advertising business”.
Revenue declined 21 per cent year-on-year, to $41m – with advertising accounting for around 1 / 4 of this total, with the alternative three-quarters coming from marketing revenues.
It’s also worth noting that the $156.4m loss features a one-off charge of $133.1m, which pushed the company’s total costs and expenses as much as $201.8m, from $66.7m a year earlier. In keeping with Velti’s release, this charge was “related to the write-down of substantially all goodwill and other intangible assets, which was triggered by our decline in market value and was largely mechanical in accordance with our stock price on 31 March.”
Taking this into consideration, Velti reported an adjusted net lack of £18.1m, that is more closely similar to a year earlier, though still substantially larger.
Jobs
Off the back of those results, Velti has announced a serious restructuring of its business, intended to minimize operating expenses by around 20 per cent annually. This primarily means a discount in heacount, down by 22 per cent from the beginning of the year, “with an emphasis on senior staff and company overhead”, in step with Velti CEO and co-founder Alex Moukas at the earnings call.
It’s not all bad news at the jobs front, however, with the appointment of Mari Baker as COO, and Jeff Ross as CFO. Moukas said Ross, who was hired earlier within the quarter, have been “instrumental in helping us work through a few of the difficult financial issues that we are facing, and enabling us to chart the quarter for long-term success”.
“Seven-figure deals”
Throughout the earnings call, Velti remained confident that it is able to turn its fortunes around, pointing repeatedly to “seven-figure deals” it had secured during Q1, with brands including Ford, AT&T, Orange and Coca-Cola – which Moukas clarified were “not one-off campaigns”.
Ross cut straight to the purpose at the call, saying that: “I’m unlikely to specifically discuss cash balance today aside from to assert it’s enough to run our business. With respect to liquidity, we predict it’s tight, but we’ll be capable of manage through this tightening into Q3 once we expect a big amount of money flow.”
Looking forward, Velti predicts Q2 revenues of $42-45m, a slight growth over this quarter, and appears to be like pinning its hopes on a sturdy Q3 performance.
“During the 1st quarter, we continued to take the required steps to enhance Velti’s financial position and drive long-term growth,” said Moukas. “2013 could be a transitional year as we continue to optimize our business around strategic geographies and accounts, being selective concerning the revenue opportunities we pursue.”
Quotes from Velti’s earnings call taken from Seeking Alpha’s transcript.