Since Conversant rebranded from ValueClick and redefined itself from an ad network to an ad tech company, the choppy waters it once rode have calmed.
But last quarter, CEO John Guiliani warned Q2 2014 wouldn’t be as great, particularly due to the possibility of losing – or getting reduced business from – two of its CRM clients.
Conversant’s Q2 2014 revenues came within this guidance, clocking in at $137.4 million, a YoY increase of 7% (that being said, Conversant wasn’t in a great spot financially this time last year). Breaking Conversant down into its two revenue buckets, affiliate marketing revenue from Commission Junction was $40.6 million, (an 11% YoY increase) while its media revenue was $96.7 million (a 6% YoY increase).
The media umbrella includes Conversant’s display business as well as its CRM, mobile, video and cross-channel technologies. The growth rate in media in particular wasn’t as strong as Giuliani hoped. “I’m disappointed this year we don’t have double digits, and I definitely will be next year" if we don’t, he said.
“We’re not there yet,” he added, though he tried to focus on the positive by emphasizing “the things we’ve done to position ourselves for the future, the changing market, and the differentiated products we have.”
Analysts in particular were disappointed with the performance of the company’s media margins, which stagnated between Q2 2013 and Q2 2014. Giuliani said he’s comfortable with Conversant’s focus on adding value via better quality inventory at the expense of gross margins. (more…)