Seeking Alpha
Long/short equity, growth at reasonable price, research analyst, deep value
Profile| Send Message|
( followers)  

Summary

  • Marin forecasts exceeding Q2 guidance, and the sales chief departs.
  • Revenue growth confirms original investment thesis.
  • Marin should continue growing at a solid clip due to the increasing complexity of managing digital ad spend.

After the close, Marin Software (NYSE:MRIN) announced that Q2 '14 revenue would reach $23.6 million. In addition, the company reported that the Chief Revenue Officer or more specifically the leader of the sales organization was departing the company. The news appears somewhat mixed for the SaaS company that provides a revenue acquisition platform for advertisers and agencies. The stock continues to trade virtually flat since my initial recommendation last October.

The preliminary revenue number exceeds the $22.8 million reported for Q1 '14 and excluding the $300,000 from an acquisition matches the high-end of the previous guidance at $23.3 million. Marin provided the guidance back in early May in the Q1 '14 earnings release when the new CEO started so the executive is off to a solid start. The departure of another executive is concerning after recently hiring David Yovanno as CEO. The sales leader was a founding member of the sales team with eight years of experience at Marin. The executive was undoubtedly connected with the past CEO making this move difficult to analyze.

While the market has been difficult for ad tech firms, the news continues to back the original thesis that Marin Software was an extremely undervalued stock. The preliminary Q2 revenue numbers for Marin Software has the company again producing nearly 30% top line growth. With the stock trading at an enterprise value of roughly 2.5x the current revenue forecast, the SaaS provider trades at one of the lowest multiples in the software industry. The growth rate continues to back the original thesis.

Source: Update: Marin Software Preliminary Revenue And Executive Departure