RTHM expects a return to adj EBITDA profit and a 56% jump in H2 revenues
Companies: Rhythmone
AdTech Platform RhythmOne has released a full-year trading update for the year to 31 March, reporting a return to profitability and a 56% jump in second-half revenues to $83m.
Consensus forecasts are expecting $179m for FY17 revenues and a return to pre-2014 levels of around $256m in FY18. Forecasts are suggesting the Group will post a small EPS profit by FY18, which it hasn't achieved since 2014.
The company, which changed its name from Blinkx after the adware malaise and share price collapse in 2014, said it had successfully executed against three objectives it set forth at the start of FY17. Namely a return to full-year adj EBITDA profitability, the growth of core mobile, video, and programmatic product lines, and an accelerated drawdown of Non-Core products.
"FY2017 was a pivotal year for RhythmOne. With a return to profitability, strategic focus on Core mobile, video and programmatic trading and complete drawdown of Non-Core product lines, the Company has accomplished the fundamental transformation it began over two years ago."
CEO S. Brian Mukherjee said the re-structuring set in motion more than two years ago after the Blinkx adware controversy was now complete, adding that the accelerated return to profitability in each of the last three-quarters had demonstrated it:
"Based upon current revenue dynamics, we expect our unified programmatic platform, RhythmMax, to be the principal driver of future Company growth...
Through the platform, RhythmOne has unified the entire supply side of the value chain, streamlining interactions between advertisers and consumers, and enhancing the efficiency and effectiveness of online advertising campaigns."
Entering the new financial year, the business says it is in a robust and competitive position, with a more focused product portfolio aligned with the main industry trends.
"The Company anticipates FY2018 to be a period of Core revenue growth and profitability, through both organic efforts and scale acquisitions, as opportunities to consolidate the industry proliferate."
Shares in Rhythmone rose 4% on Wednesday and are up more than 186% in the past year. This is still a fraction of the price the company traded at before its 2014 controversy, with the stock trading 79% below its 2014 highs.
