SCOR
$2.56
Comscore
($.06)
(2.29%)
Earnings Details
Quarter December 2019
Thursday, February 27, 2020 4:05:00 PM
Tweet Share Watch
Summary

comScore Sees Revenue Above Estimates

Comscore (SCOR) reported a Quarter December 2019 loss of $0.31 per share on revenue of $95.2 million. The consensus estimate was a loss of $0.29 per share on revenue of $96.4 million. Revenue fell 12.9% compared to the same quarter a year ago.

The company said it expects 2020 revenue of $390.0 million to $400.0 million. The current consensus estimate is revenue of $389.1 million for the year ending December 31, 2020.

comScore Inc provides digital media analytics that enables its customers to make well-informed, data-driven decisions to effectively manage their business, build successful digital strategies and tactics.

Results
Reported Earnings
($0.31)
Earnings Whisper
-
Consensus Estimate
($0.29)
Reported Revenue
$95.2 Mil
Revenue Estimate
$96.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Comscore Reports Fourth Quarter and Full Year 2019 Results

RESTON, Va., Feb. 27, 2020 /PRNewswire/ -- Comscore, Inc. (Nasdaq: SCOR), a trusted partner for planning, transacting, and evaluating media across platforms, today reported financial results for the quarter and full year ended December 31, 2019.

Fourth Quarter 2019 Financial Highlights

  • Revenue for the fourth quarter was $95.2 million compared to $109.3 million in the prior-year quarter
  • GAAP net loss of $21.4 million, or $(0.31) per share, compared to a net loss of $27.2 million, or $(0.46) per share in the year-ago quarter
  • Adjusted EBITDA for the fourth quarter was $5.5 million compared to $6.3 million in the prior-year quarter

Full-Year 2019 Financial Highlights

  • Revenue for 2019 was $388.6 million compared to $419.5 million in 2018
  • GAAP net loss of $339.0 million, or $(5.33) per share, which includes impairment charges of $241.6 million, compared to $159.3 million, or $(2.76) per share in 2018
  • Adjusted EBITDA of $6.2 million compared to $16.4 million in 2018
  • Cash, cash equivalents and restricted cash of $66.8 million compared to $50.2 million as of December 31, 2018

Recent Key Renewals, Partnerships and New Business Developments

  • Syndicated digital - Buzzfeed, iHeartMedia, Publishers Clearing House, Revolt Media and ViacomCBS
  • National TV - The Cowboy Channel and TargetSmart
  • Local TV - CBS Television, KRGV, Gray Television and Quincy Media
  • Movies - Paramount Pictures and Cinemex

"Our fourth-quarter results demonstrate that our turnaround plan is working. We are encouraged by our operating performance, particularly in syndicated digital which showed improvement in the quarter, and local TV," said Bill Livek, CEO and Executive Vice Chairman of Comscore. "We will continue our focus on managing expenses while we shift our efforts towards revenue growth.  Energy and enthusiasm from our customers accelerated in the last three months, and we are executing on our plan to deliver products that help our customers achieve better business outcomes."

"Today, we are also announcing a measurement agreement with Comcast that will greatly improve our direct measurement of television households across the U.S. It is a major step in our ongoing journey toward more precise measurement, helping us develop better products to serve our customers and drive revenue growth in the coming years," Livek concluded.

Fourth Quarter Summary Results

Total revenue in the fourth quarter of 2019 was $95.2 million, down from $109.3 million in the year-ago quarter.

Ratings and Planning revenue was $66.8 million in the fourth quarter of 2019, compared to $74.8 million in the year-ago quarter. The decrease compared to the same period in the prior year was the result of a decline in revenue from syndicated digital products and national TV. This was partially offset by local TV revenue, which increased 35% from the year-ago quarter.

Analytics and Optimization revenue was $17.7 million in the fourth quarter of 2019, compared to $23.9 million in the year-ago quarter. The decrease was related to lower digital custom marketing solution sales and Lift revenue compared to the prior-year period. This decrease was offset, in part, by higher revenue from Activation products.

Movies Reporting and Analytics revenue was $10.7 million in the fourth quarter of 2019, compared to $10.6 million in the year-ago quarter.

Net loss for the fourth quarter of 2019 was $21.4 million, or $(0.31) per share, compared to a net loss of $27.2 million, or $(0.46) per share reported in the year-ago quarter.

For the fourth quarter of 2019, non-GAAP adjusted EBITDA was $5.5 million, compared to $6.3 million in the year-ago quarter. Adjusted EBITDA excludes stock-based compensation expense; impairment charges; settlement of certain litigation; investigation, litigation and audit-related expense; restructuring expense; change in fair value of financing derivatives, warrants liability and equity securities investment; and other items as presented in the accompanying tables.

Full-Year Summary Results

Total revenue for the full year of 2019 was $388.6 million compared to $419.5 million in 2018.

Ratings and Planning revenue was $271.6 million compared to $285.4 million in the prior year, primarily driven by a decrease in revenue from syndicated digital products and national TV products, partially offset by higher local TV and cross-platform revenue.

Analytics and Optimization revenue was $74.7 million compared to $92.4 million in the prior year, primarily driven by lower sales and deliveries of digital custom solutions, survey and Lift products in 2019. The decrease was offset by increased revenue from Activation products, which continued to experience year-over-year growth.

Movies Reporting and Analytics revenue was $42.3 million compared to $41.7 million in the prior year due to growth in new product revenue.

GAAP net loss for the full year 2019 was $339.0 million, or $(5.33) per share, compared to a net loss of $159.3 million or $(2.76) per share in 2018. In 2019, the company took non-cash impairment charges totaling $241.6 million relating to an intangible asset and goodwill.

For the full year 2019, the company generated $6.2 million of non-GAAP adjusted EBITDA compared to $16.4 million in 2018.

Balance Sheet and Liquidity

As of December 31, 2019, cash, cash equivalents and restricted cash totaled $66.8 million, including $20.2 million in restricted cash. Total cash increased from $58.5 million as of September 30, 2019 due to $12.7 million in net proceeds from the issuance of a collateralized term note during the fourth quarter. Total debt principal as of December 31, 2019, including $204.0 million of senior secured convertible notes, was $225.6 million.

2020 Outlook

Based on current trends and expectations, the company believes full-year 2020 revenue will be in the range of $390 million to $410 million, driven by growth in TV and addressable advertising, and a slower decline to stabilization in syndicated digital revenue. The company expects an adjusted EBITDA margin of 7% to 10% of revenue for the full year 2020, based on the impact of 2019 cost reductions and a continued focus on expenses.

The company does not provide GAAP net income (loss) on a forward-looking basis because it is unable to predict with reasonable certainty its future stock-based compensation expense, litigation and restructuring expense, fair value adjustments for financing derivatives and warrants, variable interest expense, and any unusual gains or losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. For this reason, the company is unable without unreasonable effort to provide a reconciliation of adjusted EBITDA or adjusted EBITDA margin to the most directly comparable GAAP measure, GAAP net income (loss), on a forward-looking basis.

Conference Call Information for Today, Thursday, February 27 at 5:00 p.m. ET

Management will provide commentary on the company's results in a conference call today at 5:00 p.m. ET. To access the call, dial +1 844-229-7593 (domestic) or +1 314-888-4258 (international) and reference conference ID # 3437876. Participants are advised to dial in at least 10 minutes prior to the call to register. Additionally, a live webcast of the conference call will be available on the Investor Relations section of the company's website at ir.comscore.com/events-presentations. Following the conference call, a replay will be available by dialing +1 855-859-2056 (domestic) or +1 404-537-3406 (international) with passcode # 3437876. The replay will also be available via webcast at ir.comscore.com/events-presentations.

About Comscore

Comscore (Nasdaq: SCOR) is a trusted partner for planning, transacting and evaluating media across platforms. With a data footprint that combines digital, linear TV, over-the-top and theatrical viewership intelligence with advanced audience insights, Comscore allows media buyers and sellers to quantify their multiscreen behavior and make business decisions with confidence. A proven leader in measuring digital and TV audiences and advertising at scale, Comscore is the industry's emerging, third-party source for reliable and comprehensive cross-platform measurement.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal and state securities laws, including, without limitation, Comscore's expectations, forecasts, plans and opinions regarding management's turnaround plan, improvement in the company's syndicated digital business, expense management, revenue growth, product development and delivery, the impact of the company's measurement agreement with Comcast, and 2020 revenue and adjusted EBITDA margin. These statements involve risks and uncertainties that could cause actual events to differ materially from expectations, including, but not limited to, Comscore's ability to achieve its expected strategic, financial and operational plans. For additional discussion of risk factors, please refer to Comscore's respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other filings that Comscore makes from time to time with the U.S. Securities and Exchange Commission (the "SEC"), which are available on the SEC's website (www.sec.gov).

Investors are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Comscore does not intend or undertake, and expressly disclaims, any duty or obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after the date of this press release, or to reflect the occurrence of unanticipated events.

Use of Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, we are disclosing herein non-GAAP net income (loss), adjusted EBITDA, adjusted EBITDA margin and non-GAAP expense, which are non-GAAP financial measures used by our management to understand and evaluate our core operating performance and trends. We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, as they permit our investors to view our core business performance using the same metrics that management uses to evaluate our performance. Nevertheless, our use of these non-GAAP financial measures has limitations as an analytical tool, and investors should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Instead, you should consider these measures alongside GAAP-based financial performance measures, net income (loss), various cash flow metrics, and our other GAAP financial results.

Set forth below are reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures. These reconciliations should be carefully evaluated.

COMSCORE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)



As of


As of


December 31,
2019


December 31,
2018





Assets




Current assets:




Cash and cash equivalents

$

46,590



$

44,096


Restricted cash

20,183



6,102


Accounts receivable, net of allowances of $1,919 and $1,597, respectively

71,853



75,609


Prepaid expenses and other current assets

15,357



19,972


Total current assets

153,983



145,779


Property and equipment, net

31,693



27,339


Operating right-of-use assets

36,689




Other non-current assets

2,979



8,898


Deferred tax assets

2,374



3,991


Intangible assets, net

79,559



126,945


Goodwill

416,418



641,191


Total assets

$

723,695



$

954,143


Liabilities and Stockholders' Equity




Current liabilities:




Accounts payable

$

44,804



$

29,836


Accrued expenses

55,507



58,140


Accrued litigation settlements

3,575



3,500


Contract liability

58,158



64,189


Customer advances

9,886



6,688


Warrant liability

7,725




Current operating lease liabilities

6,764




Deferred rent



1,884


Other current liabilities

3,818



4,699


Total current liabilities

190,237



168,936


Secured term note

12,463




Financing derivatives

21,587



26,100


Senior secured convertible notes

184,075



177,342


Non-current operating lease liabilities

42,497




Deferred rent



10,304


Deferred tax liabilities

287



5,527


Other non-current liabilities

13,575



14,367


Total liabilities

464,721



402,576


Commitments and contingencies




Stockholders' equity:




Preferred stock, $0.001 par value per share; 5,000,000 shares authorized at December 31, 2019 and 2018; no shares issued or outstanding as of December 31, 2019 or 2018




Common stock, $0.001 par value per share; 150,000,000 shares authorized as of December 31, 2019 and 2018; 76,829,926 shares issued and 70,065,130 shares outstanding as of December 31, 2019, and 66,154,626 shares issued and 59,389,830 shares outstanding as of December 31, 2018

70



59


Additional paid-in capital

1,609,358



1,561,208


Accumulated other comprehensive loss

(12,333)



(10,621)


Accumulated deficit

(1,108,137)



(769,095)


Treasury stock, at cost, and 6,764,796 shares as of December 31, 2019 and 2018

(229,984)



(229,984)


Total stockholders' equity

258,974



551,567


Total liabilities and stockholders' equity

$

723,695



$

954,143


 

COMSCORE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)




Years Ended December 31,



2019


2018


2017

Revenues (1)


$

388,645



$

419,482



$

403,549









Cost of revenues (1) (2) (3)


199,622



200,220



193,605


Selling and marketing (1) (2) (3)


89,145



108,395



130,509


Research and development (1) (2) (3)


61,802



76,979



89,023


General and administrative (1) (2) (3)


66,419



84,535



74,651


Investigation and audit related (1)


4,305



38,338



83,398


Amortization of intangible assets


30,076



32,864



34,823


Impairment of goodwill


224,272






Impairment of intangible asset (1)


17,308






Settlement of litigation, net


2,900



5,250



82,533


Restructuring (3)


3,263



11,837



10,510


Total expenses from operations


699,112



558,418



699,052


Loss from operations


(310,467)



(138,936)



(295,503)


Interest expense, net (1)


(31,526)



(16,465)



(661)


Other income (expense), net


1,654



(1,464)



15,205


Gain (loss) from foreign currency transactions


336



1,303



(3,151)


Loss before income taxes


(340,003)



(155,562)



(284,110)


Income tax benefit (provision)


1,007



(3,706)



2,717


Net loss


$

(338,996)



$

(159,268)



$

(281,393)


Net loss per common share:







Basic and diluted


$

(5.33)



$

(2.76)



$

(4.90)


Weighted-average number of shares used in per share calculation - Common Stock:







Basic and diluted


63,590,882



57,700,603



57,485,755


Comprehensive loss:







Net loss


$

(338,996)



$

(159,268)



$

(281,393)


Other comprehensive (loss) income:







Foreign currency cumulative translation adjustment


(1,712)



(4,397)



6,168


Other






28


Total comprehensive loss


$

(340,708)



$

(163,665)



$

(275,197)









(1) Transactions with related parties are included in the line items above.

(2) Excludes amortization of intangible assets, which is presented separately in the Consolidated Statements of Operations and Comprehensive Loss.

(3) Stock-based compensation expense is included in the line items above as follows:



Years Ended December 31,



2019


2018 (1)


2017

Cost of revenues


$

1,852



$

6,349



$

1,766


Selling and marketing


3,615



9,452



5,247


Research and development


1,981



6,580



2,270


General and administrative


9,247



14,770



8,031


Restructuring


(137)



468




Total stock-based compensation expense


$

16,558



$

37,619



$

17,314









(1) Stock-based compensation expense in 2018 includes $28.5 million for awards granted under our 2018 Equity and Incentive Compensation Plan, which was approved by our stockholders in May 2018. We did not grant any stock-based awards in 2017, as we were not current in our SEC reporting obligations.

 

COMSCORE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



Years Ended December 31,


2019


2018


2017

Operating activities:






Net loss

$

(338,996)



$

(159,268)



$

(281,393)


Adjustments to reconcile net loss to net cash used in operating activities:






Depreciation

12,778



17,259



23,339


Non-cash operating lease expense

5,369






Amortization expense of finance leases

2,413






Amortization of intangible assets

30,076



32,864



34,823


Impairment of goodwill

224,272






Impairment of intangible asset

17,308






Provision for bad debts

727



966



983


Stock-based compensation

16,558



37,619



17,314


Deferred tax (benefit) provision

(3,727)



2,019



(3,203)


Change in fair value of financing derivatives

(5,100)



14,226




Change in fair value of warrant liability

2,411






Change in fair value of investment in equity securities

2,324



(1,443)




Non-cash interest expense on senior secured convertible notes (related party)

17,374






Accretion of debt discount

6,242



4,812




Amortization of deferred financing costs

1,078



955




Gain on forgiveness of obligation





(4,000)


Accrued litigation settlements to be settled in Common Stock





90,800


Other

(2)



568



192


Changes in operating assets and liabilities:






Accounts receivable

2,738



4,707



14,529


Prepaid expenses and other assets

2,198



(4,456)



4,067


Insurance recoverable on litigation settlements



10,000



(37,232)


Accounts payable, accrued expenses, and other liabilities

10,438



(4,955)



85,001


Contract liability and customer advances

(3,477)



(30,013)



(2,638)


Deferred rent



1,565



1,013


Current operating lease liability

(7,638)






Net cash used in operating activities

(4,636)



(72,575)



(56,405)








Investing activities:






Sales of marketable securities

3,776





28,436


Purchases of property and equipment

(2,736)



(4,206)



(10,182)


Capitalized internal-use software costs

(11,500)



(9,608)




Net cash (used in) provided by investing activities

(10,460)



(13,814)



18,254








Financing activities:






Proceeds from borrowings on senior secured convertible notes (related party)



100,000




Debt issuance costs



(5,146)




Proceeds from secured term note

13,000






Secured term note issuance costs

(350)






Proceeds from private placement, net of issuance costs paid

19,752






Financing proceeds received on subscription receivable (related party)



9,679



11,012


Proceeds from sale-leaseback financing transaction

4,252






Proceeds from the exercise of stock options

1,191



2,855




Payments for taxes related to net share settlement of equity awards

(1,267)



(5,263)



(1,514)


Principal payments on finance leases

(2,535)






Principal payments on capital lease and software license arrangements

(2,070)



(9,006)



(17,016)


Net cash provided by (used in) financing activities

31,973



93,119



(7,518)


Effect of exchange rate changes on cash, cash equivalents and restricted cash

(302)



(1,657)



2,453


Net increase (decrease) in cash, cash equivalents and restricted cash

16,575



5,073



(43,216)


Cash, cash equivalents and restricted cash at beginning of period

50,198



45,125



88,341


Cash, cash equivalents and restricted cash at end of period

$

66,773



$

50,198



$

45,125









As of December 31,


2019


2018


2017

Cash and cash equivalents

$

46,590



$

44,096



$

37,859


Restricted cash

20,183



6,102



7,266


Total cash, cash equivalents and restricted cash

$

66,773



$

50,198



$

45,125


Reconciliation of Non-GAAP Financial Measures

The following table presents a reconciliation of net loss (GAAP) to adjusted EBITDA for each of the periods identified:


Years Ended December 31,


2019


2018


2017

(In thousands)

(Unaudited)


(Unaudited)


(Unaudited)

Net loss (GAAP)

$

(338,996)



$

(159,268)



$

(281,393)








Income tax (benefit) provision

(1,007)



3,706



(2,717)


Interest expense, net

31,526



16,465



661


Depreciation

12,778



17,259



23,339


Amortization expense of finance leases

2,413






Amortization of intangible assets(3)

30,076



32,864



34,823


EBITDA

(263,210)



(88,974)



(225,287)








Adjustments:






Stock-based and expected awards compensation expense(3)

16,695



37,151



34,261


Investigation and audit related

4,305



38,338



83,398


Settlement of certain litigation, net(2)

2,900



5,250



82,533


Restructuring

3,263



11,837



10,510


Impairment of goodwill

224,272






Impairment of intangible asset

17,308






Other expense (income), net (1)

682



12,783



(4,125)


Adjusted EBITDA

$

6,215



$

16,385



$

(18,710)



(1) In 2019 and 2018, adjustments to other income (expense), net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income (expense), net and certain legal expenses defined by our senior secured convertible notes (the "Notes") and classified as general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. Additionally, we recorded transaction costs related to the issuance of warrants, which costs were allocated to the warrants liability and recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. The remaining transaction costs were recorded in additional paid-in capital in the Consolidated Balance Sheets.

(2) Settlement of certain litigation, net includes settlement amounts incurred for certain legal proceedings defined by the Notes, which amounts are classified as general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

(3) 2017 includes $16.9 million related to a stock-based retention program that was settled in cash for employees who departed prior to issuance of equity.

The following tables present a reconciliation of net loss (GAAP) to non-GAAP net loss for each of the periods identified:


Years Ended December 31,


2019


2018


2017

(In thousands)

(Unaudited)


(Unaudited)


(Unaudited)

Net loss (GAAP)

$

(338,996)



$

(159,268)



$

(281,393)








Adjustments:






Stock-based and expected awards compensation expense(4)

16,695



37,151



34,261


Investigation and audit related

4,305



38,338



83,398


Amortization of intangible assets(3)

30,076



32,864



34,823


Settlement of certain litigation, net(2)

2,900



5,250



82,533


Restructuring

3,263



11,837



10,510


Impairment of goodwill

224,272






Impairment of intangible asset

17,308






Other expense (income), net (1)

682



12,783



(4,125)


Non-GAAP net loss

$

(39,495)



$

(21,045)



$

(39,993)



(1) In 2019 and 2018, adjustments to other income (expense), net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income (expense), net and certain legal expenses defined by the Notes and classified as general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. Additionally, we recorded transaction costs related to the issuance of warrants, which costs were allocated to the warrants liability and recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. The remaining transaction costs were recorded in additional paid-in capital in the Consolidated Balance Sheets.

(2) Settlement of certain litigation, net includes settlement amounts incurred for certain legal proceedings defined by the Notes, which amounts are classified as general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

(3) In 2018, amortization of intangible assets was added as an adjustment in our calculation of non-GAAP net loss. Prior year non-GAAP net loss has been recast to include this adjustment, which is intended to better reflect our core operating performance.

(4) 2017 includes $16.9 million related to a stock-based retention program that was settled in cash for employees who departed prior to issuance of equity.

We do not provide GAAP net income (loss) on a forward-looking basis because we are unable to predict with reasonable certainty our future stock-based compensation expense, litigation and restructuring expense, fair value adjustments for financing derivatives and warrants, variable interest expense for outstanding senior secured convertible notes, and any unusual gains or losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. For this reason, we are unable without unreasonable effort to provide a reconciliation of adjusted EBITDA, adjusted EBITDA margin or non-GAAP net loss to the most directly comparable GAAP measure, GAAP net income (loss), on a forward-looking basis.

Supplemental Non-GAAP Disclosure

The following tables present a reconciliation of certain non-GAAP expense line items (to be discussed on today's conference call) to the most directly comparable GAAP expense line items. GAAP expense line items have been adjusted to exclude the effects of stock-based compensation.


Years Ended December 31,

(In thousands)

2019

(Unaudited)


2018

(Unaudited)


As
reported
(GAAP)


Less: stock-
based
compensation


As
adjusted
(non-
GAAP)


% of
GAAP
Revenue


As
reported
(GAAP)


Less: stock-
based
compensation


As
adjusted
(non-
GAAP)


% of
GAAP
Revenue

Revenues

$

388,645







100.0

%


$

419,482







100.0

%

Cost of revenues

199,622



$

1,852



$

197,770



50.9

%


200,220



$

6,349



$

193,871



46.2

%

Gross profit

189,023



(1,852)



190,875



49.1

%


219,262



(6,349)



225,611



53.8

%

Selling and marketing

89,145



3,615



85,530



22.0

%


108,395



9,452



98,943



23.6

%

Research and development

61,802



1,981



59,821



15.4

%


76,979



6,580



70,399



16.8

%

General and administrative

66,419



9,247



57,172



14.7

%


84,535



14,770



69,765



16.6

%

Restructuring

3,263



(137)



3,400



0.9

%


11,837



468



11,369



2.7

%

We do not provide GAAP cost of revenues, selling and marketing, research and development, general and administrative, and restructuring expense on a forward-looking basis because we are unable to predict with reasonable certainty our future stock-based compensation expense without unreasonable effort. Stock-based compensation expense is uncertain, depends on various factors, and could be material to results computed in accordance with GAAP. For this reason, we are unable without unreasonable effort to provide a reconciliation of non-GAAP operating expense to the most directly comparable GAAP measure on a forward-looking basis.

COMSCORE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except share and per share data)




Three Months Ended December 31,



2019


2018

Revenues (1)


$

95,163



$

109,310







Cost of revenues (1) (2) (3)


46,831



51,994


Selling and marketing (1) (2) (3)


20,555



27,977


Research and development (1) (2) (3)


12,639



18,632


General and administrative (1) (2) (3)


15,878



18,468


Investigation and audit related (1)


129



892


Amortization of intangible assets


6,925



8,158


Restructuring (3)


(1,886)



6,696


Total expenses from operations


101,071



132,817


Loss from operations


(5,908)



(23,507)


Interest expense, net (1)


(8,350)



(4,754)


Other expense, net


(4,967)



(637)


Gain (loss) from foreign currency transactions


(432)



1,484


Loss before income taxes


(19,657)



(27,414)


Income tax (provision) benefit


(1,733)



210


Net loss


$

(21,390)



$

(27,204)


Net loss per common share:





Basic and diluted


$

(0.31)



$

(0.46)


Weighted-average number of shares used in per share calculation - Common Stock:





Basic and diluted


69,644,437



59,116,831


Comprehensive loss:





Net loss


$

(21,390)



$

(27,204)


Other comprehensive income (loss):





Foreign currency cumulative translation adjustment


1,182



(1,608)


Total comprehensive loss


$

(20,208)



$

(28,812)







(1) Transactions with related parties are included in the line items above.

(2) Excludes amortization of intangible assets, which is presented separately in the Consolidated Statements of Operations and Comprehensive Loss.

(3) Stock-based compensation expense is included in the line items above as follows:



Three Months Ended December 31,



2019


2018

Cost of revenues


$

(28)



$

1,114


Selling and marketing


456



1,225


Research and development


118



1,127


General and administrative


1,879



2,494


Restructuring




468


Total stock-based compensation expense


$

2,425



$

6,428


Reconciliation of Non-GAAP Financial Measures

The following table presents a reconciliation of net loss (GAAP) to adjusted EBITDA for each of the periods identified:


Three Months Ended December 31,


2019


2018

(In thousands)

(Unaudited)


(Unaudited)

Net loss (GAAP)

$

(21,390)



$

(27,204)






Income tax expense (benefit)

1,733



(210)


Interest expense, net

8,350



4,754


Depreciation

3,331



4,285


Finance lease amortization expense

439




Amortization of intangible assets

6,925



8,158


EBITDA

(612)



(10,217)






Adjustments:




Stock-based and expected awards compensation expense

2,425



5,960


Investigation and audit related

129



892


Restructuring

(1,886)



6,696


Other expense, net (1)

5,413



2,949


Adjusted EBITDA

$

5,469



$

6,280



(1) In 2019, adjustments to other income (expense), net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income (expense), net on our Consolidated Statements of Operations and Comprehensive Loss.

The following tables present a reconciliation of net loss (GAAP) to non-GAAP net loss for each of the periods identified:


Three Months Ended December 31,


2019


2018

(In thousands)

(Unaudited)


(Unaudited)

Net loss (GAAP)

$

(21,390)



$

(27,204)






Adjustments:




Stock-based and expected awards compensation expense

2,425



5,960


Investigation and audit related

129



892


Amortization of intangible assets

6,925



8,158


Restructuring

(1,886)



6,696


Other expense, net (1)

5,413



2,949


Non-GAAP net loss

$

(8,384)



$

(2,549)



(1) In 2019, adjustments to other income (expense), net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income (expense), net on our Consolidated Statements of Operations and Comprehensive Loss.

 


Three Months Ended

(In thousands)

March 31,
2019
(Unaudited)


June 30, 2019
(Unaudited)


September 30,
2019
(Unaudited)


December 31,
2019
(Unaudited)

Net loss (GAAP)

$

(27,514)



$

(279,533)



$

(10,559)



$

(21,390)










Adjustments:








Stock-based and expected awards compensation expense

6,953



4,304



3,013



2,425


Investigation and audit related

842



2,354



980



129


Amortization of intangible assets

8,105



8,076



6,970



6,925


Settlement of certain litigation, net(1)



5,000



(2,100)




Restructuring

(70)



2,949



2,270



(1,886)


Impairment of goodwill



224,272






Impairment of intangible assets



17,308






Private placement issuance cost



1,154



(416)




Other (income) expense, net (2)

(2,388)



3,304



(6,385)



5,413


Non-GAAP net loss

$

(14,072)



$

(10,812)



$

(6,227)



$

(8,384)



(1) Settlement of certain litigation, net includes settlement amounts incurred for certain legal proceedings defined by the Notes, which amounts are classified as general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

(2) In 2019, adjustments to other income (expense), net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income (expense), net on our Consolidated Statements of Operations and Comprehensive Loss.

 


Three Months Ended

(In thousands)

March 31,
2018
(Unaudited)


June 30, 2018
(Unaudited)


September 30,
2018
(Unaudited)


December 31,
2018
(Unaudited)

Net loss (GAAP)

$

(51,450)



$

(55,977)



$

(24,637)



$

(27,204)










Adjustments:








Stock-based and expected awards compensation expense

1,881



22,999



6,311



5,960


Investigation and audit related

31,867



4,883



696



892


Amortization of intangible assets

8,544



8,266



7,896



8,158


Settlement of certain litigation, net(1)



5,250






Restructuring

1,257



3,833



51



6,696


Other expense, net (2)

2,629



1,506



5,699



2,949


Non-GAAP net loss

$

(5,272)



$

(9,240)



$

(3,984)



$

(2,549)



(1) Settlement of certain litigation, net includes settlement amounts incurred for certain legal proceedings defined by the Notes, which amounts are classified as general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

(2) In 2019, adjustments to other income (expense), net, reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income (expense), net on our Consolidated Statements of Operations and Comprehensive Loss.

Supplemental Non-GAAP Disclosure

The following tables present a reconciliation of certain non-GAAP expense line items (to be discussed on today's conference call) to the most directly comparable GAAP expense line items. GAAP expense line items have been adjusted to exclude the effects of stock-based compensation.


Three Months Ended December 31,

(In thousands)

2019

(Unaudited)


2018

(Unaudited)


As
reported
(GAAP)


Less: stock-
based
compensation


As
adjusted
(non-
GAAP)


% of
GAAP
Revenue


As
reported
(GAAP)


Less: stock-
based
compensation


As
adjusted
(non-
GAAP)


% of
GAAP
Revenue

Revenues

$

95,163







100.0

%


$

109,310







100.0

%

Cost of revenues

46,831



$

(28)



$

46,859



49.2

%


51,994



$

1,114



$

50,880



46.5

%

Gross profit

48,332



28



48,304



50.8

%


57,316



(1,114)



58,430



53.5

%

Selling and marketing

20,555



456



20,099



21.1

%


27,977



1,225



26,752



24.5

%

Research and development

12,639



118



12,521



13.2

%


18,632



1,127



17,505



16.0

%

General and administrative

15,878



1,879



13,999



14.7

%


18,468



2,494



15,974



14.6

%

Restructuring

(1,886)





(1,886)



(2.0)

%


6,696



468



6,228



5.7

%


Revenues

Revenues from our three offerings of products and services are as follows:


Three Months Ended December 31,





(In thousands)

2019

(Unaudited)


% of
Revenue


2018

(Unaudited)


% of
Revenue


$ Variance


% Variance

Ratings and Planning

$

66,790



70.2

%


$

74,786



68.4

%


$

(7,996)



(10.7)

%

Analytics and Optimization

17,722



18.6

%


23,901



21.9

%


(6,179)



(25.9)

%

Movies Reporting and Analytics

10,651



11.2

%


10,623



9.7

%


28



0.3

%

Total revenues

$

95,163



100.0

%


$

109,310



100.0

%


$

(14,147)



(12.9)

%




Year Ended December 31,





(In thousands)

2019


% of
Revenue


2018


% of
Revenue


$ Variance


% Variance

Ratings and Planning

$

271,623



69.9

%


$

285,355



68.0

%


$

(13,732)



(4.8)

%

Analytics and Optimization

74,725



19.2

%


92,380



22.0

%


(17,655)



(19.1)

%

Movies Reporting and Analytics

42,297



10.9

%


41,747



10.0

%


550



1.3

%

Total revenues

$

388,645



100.0

%


$

419,482



100.0

%


$

(30,837)



(7.4)

%

 

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SOURCE Comscore