Yesterday (8 Aug) TubeMogul, Inc. (NASDAQ:TUBE) reported financial results for its second quarter ended June 30, 2016. Cross-screen growth accelerated as programmatic TV (PTV) and mobile each grew over 140% annually, offsetting the impact of the rush of brand budget from desktop to mobile. 

Highlights

- GAAP Revenue was USD$55.4 (£42.66m), an increase of 22% year-on-year

- Total Spend was USD$139.3m (£107.28m), an increase of 33% year-on-year

- Spend from mobile, PTV, display and social channels accounted for 48% of overall Total Spend, up from 26% in Q2 2015

- PTV spend grew 143% year-on-year to over USD$20m (£15.40m), nearly twice the level of PTV spend in Q1 2016

- Gross profit was USD$38.6 (£29.73m), an increase of 28% year-on-year

- Operating loss was USD$(3.4)m (-£2.62), compared to operating loss of USD$(1.5)m (-£1.16m) in the second quarter of 2015

- Net loss was USD$(3.8)m (-£2.93m), compared to net loss of USD$(1.3)m (-£1m) in the second quarter of 2015

- Adjusted EBITDA was USD$2.4m (£1.85m), compared to Adjusted EBITDA of USD$2.0m (£1.54m) in the second quarter of 2015

"We saw very strong growth in our non-desktop pre-roll channels, as brand clients are increasingly using our software to plan and buy campaigns across an array of inventory sources", said Brett Wilson, CEO of TubeMogul. "As consumption of video becomes increasingly fragmented, brands are relying more heavily on software solutions that allow them to strategically reach incremental audiences beyond traditional TV. Our software enables brands to plan and execute campaigns that complement their TV buy with a high degree of control and transparency, making TubeMogul an essential part of our clients' advertising workflow.

'Total Spend in Q2 came in slightly below our expectations. The transition in ad spending from desktop to mobile is accelerating; and, while this impacted our results, this is precisely the trend we anticipated, and we are well positioned over the long term as brands require multi-screen solutions. In particular, the investments we have made in our mobile offering over the last two years evidence our leadership. In Q2, mobile spend through our platform grew 146% and now makes up nearly 30% of our Spend. In addition, PTV spend grew 143% year-on-year. Cross-screen platform spend now accounts for 48% of Total Spend as mobile and Programmatic TV growth accelerates. We are confident that our strategy and unique cross-screen capabilities will make us the strategic platform of choice for brands."

Wilson concluded, "We feel strongly that the investments we have made in PTV, mobile, and social, along with the mix shift to these areas, positions us well to see strong topline growth in 2017. This growth will flow through to the bottom-line and should result in significantly improved operating leverage in 2017."

TubeMogul have added nine 'large spenders' – Platform Direct customers that spent over USD$1m (£0.77m) in the quarter, which has helped propel growth as the company battles the rapid shift of ad spending from desktop to mobile. Spend from clients' private inventory grew 175% year-on-year.

The company offers advertisers the opportunity to buy video inventory on Facebook and Instagram and, as a result, social spend grew over 1100% in Q2 2016. TubeMogul were named a Snapchat Partner, which will enable brand advertisers to buy Snap Ads using the platform. Snapchat inventory will offer marketers a way to scale reach, particularly with younger audiences.

TubeMogul are one of the first video advertising software platforms to join Twitter's pre-roll ads program. This program enables brand marketers to purchase real-time ads that precede in-Tweet video content posted by over 200 premium sports, TV, and digital publishers.