Telaria revised both its third quarter and full year earnings guidance downward Thursday, causing its stock price to drop 35%.
The supply-side platform formerly known as Tremor Video expects its Q3 revenue to be “between $13.0 million and $13.5 million, and adjusted EBITDA between a loss of $0.5 million,” its release states. The company also projects full year revenue will be between $50 million and $52 million, with a EBITDA between a loss of $5 million to $3 million.
This time last year, Telaria celebrated its Q3 2017 – and first-ever earnings call – with a 67% YoY growth rate. If its new projections are accurate, its growth rate between Q3 2017 and Q3 2018 will be between 2% and 6%.
Telaria CEO Mark Zagorski told AdExchanger in an email the dip came from a “strategic decision” to remove some desktop publishers from its platform in order to devote more resources to premium video content. Unfortunately, buyers did not shift spend toward that premium content.
“The removal of these publishers had a negative impact on our results, as we saw a slower than expected shift in buyers’ spending patterns towards the premium inventory,” Zagorski said. “We believe this is more of a timing issue than a structural issue with our business.”
To rectify the situation, Zagorski said the company will hire more salespeople, focus the organization on brands and agencies, build out relationships with publishers, continue investing in connected TV and further promote its premium inventory.
“We feel very confident that our strategic decision to focus entirely on premium inventory, and our firm commitment to transparency and quality is a strong foundation from which to take advantage of the shift toward TV-like digital content,” he said.
Over the last year, Telaria’s stock has lost about 50% of its value on the NYSE.