Sizmek's (Formerly DG) Auto, CPG Momentum Drives 15% Annual Revenue Growth

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sizmekSizmek, the company formerly known as Digital Generation (DG), reported Tuesday a full-year revenue increase of 15%, to $161.1 million compared to $140.7 million in 2012, capped off by Q4 revenue of $47.6 million, a 16% compared to the same period last year. (Read the release.)

These figures reflect only Sizmek’s online business, and not the television ad-distribution practice it unloaded to former competitor Extreme Reach. Sizmek, now out of debt thanks to its spinoff, expects 10-20% top-line growth in 2014. Part of this is due to the company’s planned international expansion as well as domestic growth opportunities for its existing technologies.

“I see great opportunities when it comes to online video,” said CEO Neil Nguyen. “In the past year, online video grew over 40% compared to a market that we believe has grown roughly 24%. When it comes to mobile, our business grew over 90% in 2013 and we expect to continue that trend.”

Nguyen also mentioned that while the automotive vertical was a key growth area in 2012, Sizmek signed numerous CPG clients for the fourth quarter of 2013.

Sizmek monetizes by delivering ads on a CPM or flat rate on behalf of its clients. The company bolsters this service by selling “intelligent products,” including verification or viewability solutions. It also charges for analytics around programmatic data.

“We see roughly 60 billion daily requests where we provide contextual analytics information in real time to the [programmatic buying] platforms we integrate with,” Nguyen said.

While the sale of DG’s television ad business to Extreme Reach relieved Sizmek of its debt burden, the company anticipates, for the next year, an $8 million to $9 million increase in operating expenses.

“When Sizmek was part of DG, we had the benefit of allocating certain corporate functions between [online and television] segments,” said CFO Craig Holmes. These include functions like IT expenses.  “With the closing of the sale, all costs are reflected in Sizmek operating expenses.”

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