New results show Snakk growth continues

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Mobile advertising technology company Snakk Media (NZAX: SNK) has today announced its unaudited revenue for the six months ended 30 September 2015. Revenue was $4,580,857, representing year-on-year growth of 13%. NZ grew 42% YOY. Southeast Asia is the fastest growing region for Snakk, as revenues increase sevenfold.

Year-on-year the net loss after tax decreased from -$2.19m to -$0.25m, including a first positive EBITDA quarterly result of $50,451 in the second quarter. Total reduction of net loss after tax for the first half of the financial year, compared to last financial year, was $1.94m.

Half Year Financial Highlights

  • First quarter unaudited revenue was NZD$2,267,711 from April to June 2015, representing a 15% year-on-year increase.
  • Second quarter unaudited revenue was NZD$2,313,146 from July to September 2015, representing a 13% year-on-year increase.
  • Growth in Southeast Asian revenues increased sevenfold compared to the same period last year.

Further Half Year Highlights

  • Evolving the Board: Australian technology industry veteran Peter James was appointed as Independent Non-Executive Chairman, to prepare the company for its next phase of international growth. Martin Riegel was appointed to the Board in June with a successful and diverse background working in technology and its commercialisation. He was appointed as part of the company’s strategy to bring on new Board talent with the industry experience to support Snakk’s growth across the APAC region.
  • Capital Raising: Signalled capital raising plans, as well as its intention to migrate to the NXT market.
  • Touch Create: Launched a new mobile-first creative agency that complements Snakk’s portfolio of geo-location, audience-targeting and native advertising technologies.
  • Technology: Launched TV Sync in New Zealand; a unique market offering developed by Snakk that dynamically matches mobile ads with TV commercials in real time.
  • Recognition: Named in the top 10 “Hottest” emerging technology companies list, an index maintained by the Technology Investment Network (TIN); Named an ‘Official Honoree’ in the prestigious 2015 Webby Awards, with Snakk one of only five Official Honorees in that global mobile category; and named on the global “Best for Workers” index for creating some of the highest quality jobs in the world among Certified B Corporations. Snakk’s Worker Impact score was among the top 10% of all such corporations.

“It has been a busy first half of the financial year,” said Snakk Group ceo Mark Ryan. “We have continued to increase revenue and improve our margins due to tight cost management and the refinement of our product strategies.

“As a result we saw a significant reduction in our net loss after tax of over $1.9m year-on-year, a fantastic outcome for the business. It was encouraging to see Snakk record a positive EBITDA quarterly result in the second quarter, allowing us to add to our cash reserves for the first time.

“Achieving these results on relatively modest revenue growth is proof that last financial year’s investments into our people, processes, technologies and internal systems have made Snakk a far more efficient business today.”

Mobile Advertising Outlook
Research recently released by London-based Edison Investment Research indicates that Asia Pacific mobile ad spend is forecast to outpace global trends. The mobile and tablet advertising spend in some Southeast Asian markets is currently about 11% of all money spent on digital advertising. By comparison, the US mobile advertising spend is predicted to surpass desktop for the first time this year and account for more than half of the total digital ad spend for 2015.

Reports from eMarketer show that 62.5% of the population of the greater APAC region, or 2.5 billion people, are mobile phone users, with nearly 41% of those having smartphones. In Indonesia it is estimated 93% of internet users can access the web via a mobile device, topping the global average for social networking use.

In November 2015, the IAB revealed that Australians now spend more time browsing content or interacting with apps on a tablet device, than on a PC. However, smartphones remain the preferred device overall, with the active internet population 18+ spending just under 35 hours per person either browsing content or on applications on a smartphone.

What is clear is that mobile advertising is continuing on a strong growth trajectory, particularly in Asian markets. Advertisers are rapidly increasing their mobile advertising spend levels, and are seeking our technologies and expertise more than ever.

Q3 Revenues and Key Operating Milestones to be released January 2016
The third quarter is traditionally the company’s busiest and most profitable. The Q3 report will not only show Snakk’s revenues and profit/loss, but will also measure Snakk’s four Key Operating Milestones (KOM’s), the new set of transparent performance metrics required by NXT issuers.

The four KOMs are designed to help investors assess the company’s performance and include:

  • Click-through rates (CTR), a measure used by the mobile advertising industry to assess the effectiveness of online advertising campaigns
  • Gross Margin, the outcome of mobile media bought versus sold
  • Revenue to Compensation Ratio, which both assess operational efficiency and profitability; and
  • Staff Turnover rates, a measure of team stability, important because Snakk’s people are integral to the company’s profitability and growth.

The KOM’s will help investors learn more about the company, as they provide a deeper level of detail and transparency around company operations.

“Our broader vision for Snakk Media remains in place,” says Mark Ryan. “We see a clear window of opportunity to build a highly valuable APAC mobile advertising business. We plan to achieve this via a combination of organic growth and M&A activity, with a strong focus on the Southeast Asian market.

“We will continue to make the medium to long-term strategic decisions that will allow us realise this unique and significant opportunity. We look forward to our shareholders taking this journey with us.”

About Snakk Media Ltd
Snakk Media offers a full suite of mobile creative, content and technology services, empowering the world’s leading brands and agencies to accurately reach and engage with consumers on their mobile devices. The company generates revenue every time it successfully targets and delivers an ad across its networks of mobile websites, apps and games. The ads are targeted to ensure the right audiences see them at the right time and place.

Snakk’s business units include Represent Media, a division that sells mobile ad inventory for premium publishers, and Touch Create, a mobile-first creative agency that complements Snakk’s portfolio of audience-targeting, geo-location and native advertising technologies.

Snakk was one of the first public companies in the world that has met the rigorous social and environmental performance standards required to become a certified B Corporation.

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