-2014 revenue increases 71% year-over-year
-2014 average revenue per customer rises 17% year-over-year
-Company achieves 19th straight quarter of record revenue
Newport Beach, CA – March 19, 2015 – Accelerize Inc. (OTCQB: ACLZ) (OTCBB: ACLZ), a leader in marketing technology solutions, today announced financial results for its fiscal year ended December 31, 2014.
Accelerize owns and operates CAKE, a marketing technology provider of innovative marketing intelligence tools. CAKE’s powerful software-as-a service (SaaS) is an enterprise solution that has been an industry standard for affiliate networks, advertisers, publishers and agencies to measurably improve and optimize digital spend.
Company Highlights for 2014
Named as a “Vendor to Watch” in December 2014 by Gartner, Inc.: Gartner, Inc. named CAKE by Accelerize a “Vendor to Watch” in the “Magic Quadrant Digital Marketing Hubs” report. The new research is intended for chief marketing officers (CMOs), chief marketing technologists and other digital marketing leaders involved in the selection of core systems to support digital marketing business requirements. According to Gartner, “The company appeals to enterprise performance marketers that desire strong accountability and publishers offering a pay-for-performance pricing model. In line with its affiliate roots, CAKE emphasizes the tracking of media spending directly to sales.”
Customer Growth and Revenue Expansion: Fourth quarter revenue reached a record $4.8 million with average revenue per customer increasing by 17% year-over-year. The Company also added customers from a number of new geographies including India, Brazil and Germany.
Product Innovation: Launched CAKE for Advertisers, a new multi-channel digital marketing hub that enables advertisers to accurately track, attribute and optimize advertising spend across the entire digital customer journey in real-time. CAKE for Advertisers significantly expands the Company’s SaaS platform into significantly larger market opportunities.
Continued International Expansion: Achieved significant global diversification with 25% of overall revenue derived outside the U.S. for fiscal year 2014, up from 11% for fiscal year 2013. Throughout the year, the Company opened a New York office, expanded the UK office and established a presence in Australia. The Company also established a global network of partners with organizations including Marketo, Google Adwords, Bing Ads and DoubleClick.
Strengthened Global Sales Leadership: Named Eric Rosenthal executive vice president of sales at CAKE to spearhead global sales force expansion. Throughout his career Rosenthal has been instrumental in driving revenue growth for both start-up and mid-stage ad-tech companies, many of which have gone on to be acquired by large industry players such as Google and AOL.
“It has been an incredibly exciting year for Accelerize as we achieved record revenue, expanded our customer base, and moved upstream from affiliate marketing with the launch of CAKE for Advertisers, our enterprise digital marketing platform providing real-time analytics for global advertisers,” said Brian Ross, Chairman and CEO of Accelerize. “According to estimates by eMarketer, digital advertising will grow to over $137 billion in 2014, claiming more than one-quarter of all ad dollars spent, and our CAKE for Advertisers product has enabled us to establish a unique growth position within this rapidly evolving marketplace. Additionally, our strategic global expansion effort has already begun to pay off and sets the stage for sustainable recurring revenue growth in the coming years. We look forward to continuing our progressive global business expansion in 2015 as we work to further solidify our position as a best-of-breed innovator in delivering powerful solutions for global advertisers looking to take full advantage of digital marketing opportunities.”
Financial Highlights for FY 2014
Revenues: Total revenues for fiscal 2014 rose to a record $16.5 million, a 71% increase from revenues of $9.7 million recorded in fiscal 2013. The revenue increase was driven organically by a 50% increase in the average number of customers on the CAKE SaaS platform and a 17% increase in average revenue per customer. The Company expects future revenues to be driven by ongoing organic growth, international expansion, product innovation, as well as increased sales and marketing efforts.
Operating Income (Loss): Operating loss in fiscal 2014 was $(3.2 million), compared to an operating loss of $(210K) in fiscal 2013. The increased operating loss in fiscal 2014 was attributable to a $6.0 million increase in Sales, Marketing and G&A expenses related to the Company’s launch of new products, international expansion and the addition of 38 employees to support current and future sales growth, and as well as a $1.7 million increase in Research & Development expenditures related to product innovation. This was partially offset by a $4.7 million increase in gross profit.
Net Income (Loss): Net loss for fiscal 2014 was $(3.3 million), compared to net income of $94K, during the prior year period. Earning per share was $(0.05) in 2014 compared to $0.01 in 2013. The net loss in 2014 was attributable to an increase in Sales, Marketing and G&A expenses as described above.
Cash Flow: Net Cash used in operations in fiscal 2014 was $(2.6 million) compared to net cash provided by operations of $749K during the prior year period. The increase in cash used in operations is largely attributable to increased Sales and Marketing, G&A and Research & Development expenditures described above partially offset by increased gross profit. Net cash at December 31, 2014 was $1.1 million compared to $1.2 million at December 31, 2013.
Credit Facility: As of December 31, 2014, the Company had an additional $3.1 million available on its recently increased credit facility with Square 1 Bank to fuel corporate growth. The Company believes it has sufficient cash to fund operations for at least the next 12 months.
Revenue Model: The Company’s revenue model is based on a monthly license fee, a usage fee (based on volume of online events), and a training and implementation fee. Customers purchase annual subscriptions with an additional usage fee.
Accelerize is currently evaluating a corporate strategy to improve the Company’s visibility and liquidity through a potential up-listing to a major stock exchange mid-2015. Given the growth and evolution of the Company into enterprise software, management sees an exchange such as NASDAQ or NYSE MKT providing a more appropriate platform for Accelerize and its stockholders.
Accelerize Inc. (OTCQB: ACLZ) (OTCBB: ACLZ) offers marketing technology solutions that revolutionize the way advertisers leverage their digital advertising data. For more information, visit www.accelerize.com.
Use of Forward-looking Statements
This press release may contain forward-looking statements from Accelerize Inc. within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and federal securities laws. For example, when Accelerize says it has reached a $20MM SAAS revenue run rate, when it describes the growth in digital advertising in 2015, says that its CAKE for Advertisers product has enabled Accelerize to establish a unique growth position within the rapidly evolving digital advertising marketplace, says that its strategic global expansion effort has already begun to pay off and sets the stage for sustainable recurring revenue growth in the coming years, says that it looks forward to continuing its progressive global business expansion in 2015, says that it expects future revenues to be driven by ongoing organic growth, international expansion and increased sales and marketing efforts, says that its increased credit facility will fuel corporate growth, says that it is evaluating a potential up-listing to a major stock exchange, and when it uses other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions, Accelerize is using forward-looking statements. These forward-looking statements are based on the current expectations of the management of Accelerize only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in technology and market requirements; our technology may not be validated as we progress further; we may be unable to retain or attract key employees whose knowledge is essential to the development of our products and services; unforeseen market and technological difficulties may develop with our products and services; inability to timely develop and introduce new technologies, products and applications; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of Accelerize to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Accelerize undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting Accelerize, reference is made to Accelerize’s reports filed from time to time with the Securities and Exchange Commission.