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blinkx PLC Releases Results for Year Ended 31 March [Health & Beauty Close - Up](Health & Beauty Close - Up Via Acquire Media NewsEdge) blinkx PLC, an Internet Media platform powered by Core, has reported financial results for the year ended 31 March 2013. In a release on May 13, the Company noted: Business Highlights -Revenue increased by 73 percent to $198.0 million, from $114.4 million in FY2012 -Adjusted EBITDA increased by 111 percent to $30.2 million, from $14.3 million in FY2012 -Adjusted profit before tax of $24.6 million, an increase from $10.7 million in FY2012 -Basic earnings per share of 4.8 cents, a 336 percent increase from 1.1 cents in FY2012 -Net cash at year-end was $55.9 million, an increase from $38.4 million in FY2012 -Secured content and syndication partnerships, including Daily Motion, Kiplinger, Fox Sports, Sony and Popbox -Added marquee brand advertisers, including Clorox, Kellogg, Nike, Disney, Gap, Siemens and Mattel -Launched next generation of flagship video search and discovery engine, blinkx.com, optimized for mobile environments and integrated with social media platforms -Achieved the front end integration of FY2012 acquisitions well ahead of schedule -Completed the successful transition of the CEO and CFO roles -Expanded the leadership team with key Marketing, Product and Technology executives Commenting on the results, S. Brian Mukherjee, CEO of blinkx, said: "This has been an exciting year for blinkx and we are delighted to report a record performance. The business demonstrated strong underlying growth, stability and efficiency, which was accelerated by the ahead-of-schedule integration of the acquisitions that we made last year. The scale, scope and reach of these acquisitions enabled us to serve a greater number of advertisements to a wider audience at robust monetization rates, which helped drive our growth. Several structural trends are fueling the growth of the online advertising industry in general, and the video advertising sector in particular. These include widespread broadband adoption, the proliferation of connected devices and the rapid migration and consumption of video content online - all of which are prompting advertisers to follow audiences online. This year, the industry also benefited from the increase in advertising spend attributed to two high-profile events - the summer Olympics and the US political campaigns in a Presidential election cycle. We believe the market momentum underscores the vitality of the sector and of our business model. The opportunity for blinkx lies in maximizing yield through product innovation, expansion of its distribution channels and the capture of new and emerging revenue streams. Based on our capabilities and the fundamentals of the industry, we remain confident in our prospects and opportunities." Overview These results underscore the success of the Company's core strategic focus, which has been to create a significant, scalable ecosystem of audience, content providers, advertising networks and advertisers, which is becoming video enabled. The acquisitions we made in FY2012 enabled us to develop an expanded set of opportunities to syndicate content and increase our audience reach for advertisers. Our forward strategy and growth are based on further monetizing this opportunity, while also expanding the ecosystem to include rapidly proliferating form factors, such as tablets and smartphones. During the period, the company was proud to unveil the next generation of its flagship video search and discovery technology at blinkx.com. With an eye to the mobile market, the new site was built from the ground up for use on connected devices, with a simple, elegant user interface that is touch optimized for continuous video discovery and streaming, and offers personalization tools and integration with social networks. The upgraded search and discovery functionality is currently being rolled out to our syndication partners and affiliates. Over the year, we have continued to build on our leadership position in the online video market. We progressed our cross- platform distribution strategy by mobile-enabling our syndication partners and securing Connected TV partnerships with Sony and Popbox. We also expanded our index of premium content through agreements with Kiplinger, Daily Motion and XOS Sports, among others. This combination of top tier professional content, broad distribution and our patented video search, discovery and advertising platform and products, helped us attract new and repeat marquee brand advertisers, such as Disney, Gap and Siemens. Market There are four structural trends driving the growth of the online video sector in which blinkx operates. First, broadband and high-speed mobile networks are becoming increasingly prevalent. Reliable, high speed connectivity means that an ever growing volume of rich media is being consumed online, with estimates predicting that by 2016, 1.2 million minutes of video will traverse the Internet every second. Second, there is an ongoing move to video-enable the Text Web. Websites from a decade ago resembled a static page from a magazine. Today, consumers expect rich media to be part of their online experience, and destination sites position video content prominently to enhance and complement their text content - whether a cooking blog that offers video on how to prepare ingredients, or a professional news outlet with video footage of breaking news stories. Third, the proliferation of smartphones and tablets is accelerating access to high-speed mobile networks and enabling consumers to watch video content anytime, anywhere. According to Cisco, video consumption accounted for 51 percent of overall Internet traffic in 2012, and is expected to grow to 55 percent by 2016. Finally, advertisers have increased budgets to address the growing online video audience - 1.3 billion viewers worldwide in 2012, according to comScore. Online video presents a powerful opportunity for advertisers because it combines the emotive, storytelling, brand-building power of TV with the measurability and targeting power of the Internet. blinkx's patented Core technology remains unique in being able to analyse video on the Web and place contextually relevant advertisements, resulting in highly targeted and effective marketing campaigns for advertisers. While online video advertising spend is still only a fraction of conventional TV spend, the trends are clear and compelling - major brands are embracing the format and spend is graduating from experimental to incremental budgets. We believe that online video budgets will begin to complement and even cannibalize TV spend in the future. blinkx is well positioned to capitalize on the market opportunity. In the last financial year, the combination of the underlying structural growth in our markets, coupled with the accelerating contribution from successfully integrated prior year acquisitions, plus one-off benefits from the Olympics and US Presidential elections - which we estimate at around a tenth of our FY2013 revenue, enhanced the growth of the company. Industry reports indicate the market outlook remains fundamentally positive in the coming year, based on observed trends in both consumer and advertiser behaviour. Within this sector, blinkx has a number of well-defined revenue opportunities, covering the gamut of product innovation and expanded distribution. We expect to exceed projected industry growth rates, given the scale, scope and reach of our operations. Technology Since inception, blinkx has spent almost $60 million in capital investment on research, development and infrastructure to build and enhance blinkx Core, (COncept Recognition Engine) its patented video engine. blinkx Core solves the challenges inherent in processing, managing and monetizing all forms of rich media. It comprises speech recognition, visual and text analysis to enable blinkx to understand video at a greater level of depth and accuracy than any other offering on the market. This deep, granular understanding of rich media enables blinkx to process, monetize and deliver video and audio content in unique ways, and to capitalize on the true potential of video in the four screen world of PCs, Tablets, Smartphones and Connected TV. blinkx's advertising platform, AdHoc, is built on Core. AdHoc is unique because it leverages Core's patented speech recognition, visual analysis and concept recognition technology to match emotive, compelling rich media advertisements to online audiences, resulting in more effective brand marketing for advertisers and, most importantly, an engaging experience for consumers. In FY2013, AdHoc enabled us to attract new and repeat marquee brand advertisers, including Clorox, Kellogg, Nike, Mattel and P&G. blinkx.com, our flagship consumer site, also leverages Core technology to provide video search and discovery technology to users. During the period, we launched the next generation blinkx.com, which showcases our upgraded video search, discovery and viewing experience, with recommendation and personalization features that can be integrated across a users' social graph. The new site was built using responsive design, with an interface that is touch- optimized for effortless navigation on smartphone and tablet devices, resulting in a significant increase in mobile usage. The upgraded search and discovery functionality is currently being rolled out to our syndication and affiliate partners. blinkx Core also powers video search and discovery for some of the Internet's largest properties, including AOL and Ask. Operations The vast majority of our revenue is generated from advertising that is sold both directly and sourced from third parties. Through organic growth, selective acquisitions and unique technological capabilities, we have created a growing ecosystem of audience, content providers, and advertisers that we continue to video- enable. The successful integration of the acquisitions has brought us access to vast networks of text-oriented sites and the potential to deliver video content and advertising to over 3,000 new web publishers, syndication partners and affiliates. In addition to massive scale, with access to billions of potential advertising interactions annually, the integrations have significantly broadened the scope of advertising products we are able to offer our customers, and boosted our reach to tens of millions of unique users per month. Today, however, we monetize only a fraction of the total ad interactions that we now have access to as a result of the acquisitions. This represents a captive, organic growth opportunity for the company. We see the exploitation of the un-monetized interactions, through a growing stable of content and advertising, as a tangible commercial opportunity. Leadership As previously, Subhransu ("Brian") Mukherjee, who was the COO of blinkx, was appointed CEO and elected to the Board of Directors as an Executive Member. Suranga Chandratillake, the Founder and CEO of the Company, assumed the role of President and Chief Strategy Officer and continues to serve as an Executive Member on its Board. Jonathan Spira, former CFO, stepped down as of 30 November, 2012. Edward Reginelli, formerly SVP and Group Controller at blinkx, succeeded Spira as CFO. As demonstrated by the performance of the company, the transition within the executive management team has been completed smoothly. During a period of transition and growth, the Company has made significant investment in management bandwidth and expertise in Technology, Product and Marketing by bringing on board three seasoned executives who will play important roles in building the business and growing the company though existing initiatives and new market opportunities. Dan Slivjanovski joined as SVP, Marketing, bringing over 15 years of executive experience in digital marketing, management consulting and integrated agency services to his new role. Technology veteran Gerry Louw was hired as SVP, Engineering and Operations. Louw has driven enterprise-level change and innovation across a wide spectrum of businesses, including Video Monitoring Services (VMS) and Agency.com. Most recently, we announced the appointment of Trent Wheeler, a product expert, from Rovi Corp. as SVP, Product. Financial Highlights For the financial year ended 31 March 2013 (FY2013), revenue totaled $198.0 million, an increase of 73 percent over the $114.4 million in revenue reported for the year ended 31 March 2012 (FY2012). Revenue benefited from strong underlying growth, which was accelerated by the ahead-of-schedule integration of the acquisitions and two high-profile events during the year, namely the summer Olympics and the US presidential election cycle. Over 95 percent of blinkx's revenue is generated from online advertising. Technology and services related to managing digital assets and advertising spend make up the remainder of the revenue stream. The Company's advertising products broadly fall into two categories: Premium and Conventional. Premium includes high value, ad units such as video, rich media, social, text and mobile, which are directly sold or sourced from third parties, such as advertising trading platforms. Conventional revenues are generated from high volume ad units - generally banner ads. Our goal is to monetize the un-monetized interactions available to us, and convert conventional revenues to premium revenues through video enabling our syndicate partners and affiliates. Profit from operations before acquisition and exceptional cost was $24.6 million for FY2013, an increase of 135 percent over $10.4 million for FY2012. The operating profit margin improvement resulted from the benefit of operational gearing, as the profit from additional revenue growth has outpaced cost and expense trends. Adjusted net profit before acquisition costs, exceptional and integration costs, amortisation of purchased intangibles and other income for FY2013 was $25.2 million (FY2012: $12.7 million). Net profit for FY2013 was $17.4 million (FY2012: $3.9 million). Adjusted basic earnings per share for FY2013 was 6.98 cents (FY2012: 3.60 cents), 4.80 cents basic earnings per share (FY2012: 1.10 cents), 6.84 cents adjusted fully diluted (FY2012: 3.52 cents) and 4.70 cents fully diluted (FY2012: 1.08 cents). blinkx's cash balance at 31 March 2013 was $55.9 million (31 March 2012: $38.4 million) benefiting from strong cash conversion efforts. ((Comments on this story may be sent to [email protected])) (c) 2013 ProQuest Information and Learning Company; All Rights Reserved. |