The Meet Group (MEET) Reports In-Line Q4 EPS, Slight Beat on Revenues; Offers Q1 & FY19 Revenue Guidance Above Consensus

The Meet Group (NASDAQ: MEET) reported Q4 EPS of $0.12, in-line with the analyst estimate of $0.12. Revenue for the quarter came in at $52.5 million versus the consensus estimate of $52.2 million.

Fourth Quarter 2018 Financial Highlights

• Total revenue of $52.5 million, up 31% year over year.
• GAAP net income of $4.3 million, or $0.06 per diluted share, compared to a GAAP net loss of $68.1 million, or a loss of $0.95 per diluted share, in the prior year quarter.
• Adjusted EBITDA of $10.6 million, compared to Adjusted EBITDA of $10.5 million in the prior year quarter.
• Non-GAAP net income of $9.4 million, or $0.12 per diluted share, compared to $9.5 million, or $0.12 per diluted share, in the prior year quarter.

“In addition to reporting a strong quarter, I’m excited to announce the acquisition of Growlr, which provides a meaningful step into the large same-sex dating market and expands the base of users to whom we can deliver our live video product,” said Geoff Cook, Chief Executive Officer of The Meet Group.

“Video transformed our business in 2018,” continued Cook. “Our goal is to build the best place to meet new people through video, and in the fourth quarter, we grew both the number of viewers and the number of broadcasters on our video platform from the third quarter of 2018. We also increased the average monetization per daily active video user to 18 cents, up from 14 cents in the third quarter 2018. This strong progress contributed to growing our annualized video run rate revenue to $71 million for the month of December. Our strong progress continues into 2019 as we’ve grown the annualized video run rate for the month of February to more than $82 million.

“Advertising results in the fourth quarter of 2018 were solid. In the seasonally high fourth quarter, we grew ad revenue 20% from the third quarter, the highest sequential gain of the year. Though advertising revenue in the fourth quarter 2018 declined from a year ago, we are continuing to see signs of stabilization in the advertising market, and we expect to see a return to traditional seasonal advertising trends in 2019.

“We believe we are still in the early days of the video opportunity. In 2019, we expect to video-enable nearly every aspect of our apps while broadening our suite of video products and attracting new audiences. Guided by our commitment to create meaningful connections for our users, we expect to continue to drive strong growth in video engagement and monetization throughout the year and into the future.”

Growlr Acquisition Highlights

• Expected pro forma revenue and Adjusted EBITDA for 2019 of approximately $5.3 million and $3.1 million, respectively.
• 200,000+ global daily active users.
• Acquisition expected to be immediately accretive to Adjusted EBITDA.
• Acquired for approximately 4.5 times anticipated pro forma 2019 Adjusted EBITDA, assuming full earnout is achieved.

“We are thrilled to add Growlr to The Meet Group portfolio,” said Cook. “Similar to what we have done with our other acquired properties, we plan to be aggressive in bringing our video model to Growlr. We expect to begin rolling out live video on Growlr in the fourth quarter of 2019. We also see opportunities to grow advertising revenue on the app, and we plan to further invest in user acquisition to expand brand awareness and reach.”

GUIDANCE:

The Meet Group sees Q1 2019 revenue of $47.5-48 million, versus the consensus of $47 million.

• Adjusted EBITDA in the range of $7.0 million to $7.5 million.

The Meet Group sees FY2019 revenue of $210-215 million, versus the consensus of $201.07 million.

• Adjusted EBITDA in the range of $39.0 million to $42.0 million.

For earnings history and earnings-related data on The Meet Group (MEET) click here.

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