By Kim-Mai Cutler
In its first-ever earnings report as a publicly traded company, mobile advertising network Millennial Media (NYSE:MM) said its net loss for the first quarter widened to $4 million on increased costs. Revenues were up 53 percent year-over-year to $32.9 million.
Millennial’s shares fell by 7.7 percent in after-hours trading, as the company’s annual forecast missed estimates. For the year, Millennial is looking at $173 million and 176 million in annual revenues, which would be up by 68 percent from the year before. But that’s actually lower than the $202.8 million analysts were expecting on average, according to a Bloomberg survey. When the company went public two months ago, its shares popped more than 100% on the first day and gave the company a nearly $2 billion valuation. Since then, they’ve settled and fallen by 67 percent, giving the company a market cap of $1.16 billion.
Millennial didn’t share much about eCPMs, a key metric that shows how much the company is earning per 1,000 ad impressions. It’s worth noting because many other consumer web giants including Google and Facebook are facing downward pressure on their average ad prices because mobile rates are so much lower than their desktop equivalents. Google’s cost-per-click growth (or the amount it earns every time a user clicks through on an ad) was down 12 percent year-over-year and down 6 percent quarter-over-quarter — largely because of the difference between mobile and web ads. Facebook similarly had to change its IPO filing last week to say that mobile usage was growing so fast that the company is not able to keep up with the pace in terms of how many ads it serves. Many Facebook pages on the web have as many as seven ads on them, while the mobile app just shows sponsored stories occasionally in the feed.
Millennial didn’t share any numbers that would help us understand how the company is coping with these issues, except to say that better targeting is helping.
“Overall, there is a mix and a shift toware more targeting and engaging ads, which have driven prices up for us,” the chief executive Paul Palmieri said on the call.
As for the quarter itself, about $20.1 million of Millennial’s revenue came from existing clients, while the rest came from new customers. Millennial Media’s footprint is still very U.S. based. Only 12 percent of revenues come from abroad, although they’re growing with help from European markets. The company said fill rates are up as the company expands abroad. Before, those impressions would go unfilled because Millennial didn’t have a large sales team outside of the U.S.