Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nasdaq  >  Marin Software Incorporated    MRIN

MARIN SOFTWARE INCORPORATED

(MRIN)
  Report
SummaryQuotesChartsNewsCalendarCompanyFinancials 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector news

Marin Software Incorporated : INC Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

08/11/2020 | 06:04am EST
The following discussion and analysis of our financial condition, results of
operations and cash flows should be read in conjunction with the (1) unaudited
condensed consolidated financial statements and the related notes thereto
included elsewhere in this Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020, and (2) the audited consolidated financial statements and notes
thereto and management's discussion and analysis of financial condition and
results of operations for the fiscal year ended December 31, 2019, included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2019,
filed with the Securities and Exchange Commission (the "SEC"), on March 23,
2020. This Quarterly Report on Form 10-Q contains "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act. These statements are often identified by the use
of words such as "believe," "may," "potentially," "will," "estimate,"
"continue," "anticipate," "intend," "could," "should," "would," "project,"
"plan," "predict," "expect," "seek" and similar expressions or variations. Such
forward-looking statements are subject to risks, uncertainties and other factors
that could cause actual results and the timing of certain events to differ
materially from future results expressed or implied by such forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, those identified herein, and those discussed in the
section titled "Risk Factors", set forth in Part II, Item 1A of this Form 10-Q.
Except as required by law, we disclaim any obligation to update any
forward-looking statements to reflect events or circumstances after the date of
such statements.

Overview

We are a leading provider of digital marketing solutions for search, social, and
eCommerce advertising channels, offered as a unified software-as-a-service, or
SaaS, advertising management platform for performance-driven advertisers and
agencies. Our platform is an analytics, workflow and optimization solution for
marketing professionals, enabling them to effectively manage their digital
advertising spend. We market and sell our solutions to advertisers directly and
through leading advertising agencies, and our customers collectively manage
billions of dollars in advertising spend on our platform globally across a wide
range of industries. We believe this makes us one of the largest providers of
independent advertising cloud solutions. Our software solution is designed to
help our customers:

• measure the effectiveness of their advertising campaigns through our

proprietary reporting and analytics capabilities;



    •   manage and execute campaigns through our intuitive user interface and
        underlying technology that streamlines and automates key functions, such
        as advertisement creation and bidding, across multiple publishers and
        channels; and

• optimize campaigns across multiple publishers and channels based on market

and business data to achieve desired revenue outcomes using our predictive

bid management technology.

Our current product lineup consists of MarinOne and our two legacy products, Marin Search and Marin Social.

• MarinOne. Our next-generation solution brings search, social and eCommerce

advertising into a single-platform that helps advertisers maximize a

customer journey that spans Google, Facebook and Amazon by combining the

power of Marin Search and Marin Social with new channels like Amazon,

Apple Search Ads and YouTube.

• Marin Search. Our original solution for large advertisers and agencies,

Marin Search is designed to provide search advertisers with the power,

        scale and flexibility required to manage large-scale advertising
        campaigns.

• Marin Social. Helps advertisers manage their Facebook, Instagram and

Twitter advertising spend at scale.



Advertisers use our platform to create, target and convert precise audiences
based on recent buying signals from users' search, social and eCommerce
interactions. Our platform is integrated with leading publishers such as Amazon,
Apple, Baidu, Bing, Facebook, Google, Instagram, Pinterest, Twitter, Verizon
Media, Yahoo! Japan and Yandex. Additionally, we have integrations with more
than 50 leading web analytics and advertisement-serving solutions and key
enterprise applications, enabling our customers to more accurately measure the
return on investment of their marketing programs.

Our software platform serves as an integration point for advertising
performance, sales and revenue data, allowing advertisers to connect the dots
between advertising spend and revenue outcomes. Through an intuitive interface,
we enable our customers to simultaneously run large-scale digital advertising
campaigns across multiple publishers and channels, making it easy for marketers
to create, publish, modify and optimize campaigns.

Our predictive bid management and optimization technology also allows
advertisers to forecast outcomes and optimize campaigns across multiple
publishers and channels to achieve their business goals. Our optimization
technology can help advertisers increase advertisement spend on those campaigns,
publishers and channels that are performing well while reducing investment in
those that are not. This category of solutions, which we refer to as
cross-channel bid and campaign optimization, helps businesses intelligently and
efficiently measure, manage, and optimize their digital advertising spend to
achieve desired business results.

                                       20

--------------------------------------------------------------------------------


In December 2019, the novel coronavirus causing the disease COVID-19 was
reported in China and in March 2020 the World Health Organization declared it a
pandemic. We believe that the COVID-19 pandemic has had an adverse impact on
many of our customers and their businesses and their spending on digital
advertising and has had an adverse impact on our recent results of operations
and is likely to continue to affect our future results of operations. The extent
of the impact of COVID-19 on our operational and financial performance will
depend on certain developments, including the duration and spread of the
pandemic, impact on our customers and our sales cycles, and impact on our
employees, all of which are uncertain and cannot be predicted. At this time, the
extent to which COVID-19 may impact our financial condition or results of
operations is uncertain. Since mid-March 2020, some of our customers have
reduced the amount of digital advertising spend that they manage using our
product which has had an adverse effect on our results of operations and some of
our customers have requested extended payment terms, reduced fees or fee
waivers, early contract terminations and other forms of contract relief. Also,
since mid-March 2020 most of our employees have not been able to work from our
offices and have been working from home, which could cause some disruptions or
delays in our business activities, including our product development efforts.

Components of Results of Operations

Revenues


We generate revenues principally from subscription contracts under which we
provide advertisers with access to our search, social and eCommerce advertising
management platform, either directly or through the advertiser's relationship
with an agency with whom we have a contract. Our subscription contracts are
generally one year or less in length. Under subscription contracts with most of
our direct advertisers and some independent agencies, we generally charge fees
based on the amount of advertising spend that these customers manage through our
platform or a contractual minimum monthly platform fee, whichever is greater.
Certain of these customers are charged only a fixed monthly platform fee. Most
of our subscription contracts with our network agency customers do not include a
committed minimum monthly platform fee, and we charge fees based upon the amount
of advertising spend that these customers manage through our platform. Due to
the nature of the platform and the services performed under the subscription
agreements, revenues are typically recognized in the amount billable to the
advertiser.

Our long-term strategic agreements have historically included multiple-year
terms and are invoiced quarterly. Our largest agreement with Google was entered
into in December 2018 with an effective date of October 1, 2018 (the "Google
Revenue Share Agreement") and includes both a fixed baseline amount and a
variable portion based on a percentage of relevant advertising search spend
above the baseline threshold that runs through our technology platform. The
Google Revenue Share Agreement has a three-year term; however, until March 2020,
we and Google executed the first amendment to the original agreement (the "First
Amendment"), Google could terminate the Google Revenue Share Agreement after two
years, with no penalty if we did not meet certain financial metrics.
Accordingly, the Company accounted for the Google Revenue Share Agreement as a
two-year agreement with one optional renewal year. The revenue impact of the
third year is being accounted for prospectively from the date of the First
Amendment. Our other long-term strategic agreements are generally variable in
nature, based on a percentage of relevant search advertising spend that runs
through our technology platform.

Refer to Note 2 of the accompanying condensed consolidated financial statements for further discussion of our revenue recognition considerations.


The majority of our revenues are derived from advertisers based in the United
States. Advertisers from outside the United States represented 24% and 26% of
total revenues for the three months ended June 30, 2020 and 2019, respectively,
and 24% and 25% of total revenues, for the six months ended June 30, 2020 and
2019, respectively.

Cost of Revenues

Cost of revenues primarily includes personnel costs, consisting of salaries,
benefits, bonuses and stock-based compensation expense for employees associated
with our cloud infrastructure and global services for implementation and ongoing
customer service. Other costs of revenues include fees paid to contractors who
supplement our support and data center personnel, expenses related to
third-party data centers, depreciation of data center equipment, amortization of
internally developed software, amortization of intangible assets and allocated
overhead. Incremental cost of revenues associated with our long-term strategic
agreements, including our largest agreement with Google, are generally not
significant.

Sales and Marketing


Sales and marketing expenses consist primarily of personnel costs, including
salaries, benefits, stock-based compensation expense and bonuses, as well as
sales commissions and other costs including travel and entertainment, marketing
and promotional events, lead generation activities, public relations, marketing
activities, professional fees, amortization of intangible assets and allocated
overhead. All of these costs are expensed as incurred, except sales commissions
and the related payroll taxes, which are capitalized and amortized over the
expected period of benefit in accordance with the relevant authoritative
accounting guidance (refer to Note 2 of the accompanying condensed consolidated
financial statements). Our commission plans provide that commission payments to
our sales representatives are paid based on the key components of the applicable
customer contract, including the minimum or fixed monthly platform fee during
the initial contract term.

                                       21
--------------------------------------------------------------------------------

Research and Development


Research and development expenses consist primarily of personnel costs for our
product development and engineering employees and executives, including
salaries, benefits, stock-based compensation expense and bonuses. Also included
are non-personnel costs such as professional fees payable to third-party
development resources, amortization of intangible assets and allocated overhead.
Our research and development efforts are focused on enhancing our software
architecture, adding new features and functionality to our platform and
improving the efficiency with which we deliver these services to our customers,
including the development of MarinOne.

General and Administrative


General and administrative expenses consist primarily of personnel costs,
including salaries, benefits, stock-based compensation expense and bonuses for
our administrative, legal, human resources, finance and accounting employees and
executives. Also included are non-personnel costs, such as audit fees, tax
services and legal fees, as well as professional fees, insurance and other
corporate expenses, including allocated overhead.

                             Results of Operations

The following table is a summary of our unaudited condensed consolidated
statements of operations for the specified periods and results of operations as
a percentage of our revenues for those periods. The period-to-period comparisons
of results are not necessarily indicative of results for future periods.
Percentage of revenues figures are rounded and therefore may not subtotal
exactly.



                                      Three Months Ended June 30,                              Six Months Ended June 30,
                                 2020                         2019                         2020                         2019
                                       % of                         % of                         % of                         % of
                         Amount      Revenues         Amount      Revenues         Amount      Revenues         Amount      Revenues
                                                                     (dollars in thousands)
Revenues, net           $  7,275           100   %   $ 12,476           100   %   $ 15,935           100   %   $ 25,924           100   %
Cost of revenues (1)
(2) (3)                    4,585            63          5,929            48          9,930            62         11,740            45
Gross profit               2,690            37          6,547            52          6,005            38         14,184            55
Operating expenses
Sales and marketing
(1) (2) (3)                1,880            26          4,087            33          4,192            26          8,721            34
Research and
development (1) (2)        3,338            46          4,660            37          6,775            43          9,555            37
General and
administrative (1)         2,011            28          2,277            18          3,992            25          5,498            21
Total operating
expenses                   7,229            99         11,024            88         14,959            94         23,774            92
Loss from operations      (4,539 )         (62 )       (4,477 )         (36 )       (8,954 )         (56 )       (9,590 )         (37 )
Other income, net            537             7            532             4          1,006             6          1,072             4
Loss before provision
for income taxes          (4,002 )         (55 )       (3,945 )         (32 )       (7,948 )         (50 )       (8,518 )         (33 )
(Benefit from)
provision for income
taxes                       (521 )          (7 )           58             -           (496 )          (3 )           91             -
Net loss                $ (3,481 )         (48 ) %   $ (4,003 )         (32 ) %   $ (7,452 )         (47 ) %   $ (8,609 )         (33 ) %



(1) Stock-based compensation expense included in the unaudited condensed

    consolidated statements of operations data above was as follows:




                                           Three Months Ended June 30,             Six Months Ended June 30,
                                           2020                  2019              2020                 2019
                                                                    (in thousands)
Cost of revenues                       $         129         $         142     $        223$        267
Sales and marketing                              149                   205              259                  385
Research and development                         217                   269              384                  550
General and administrative                        72                   146              147                  245




                                       22
--------------------------------------------------------------------------------

(2) Amortization of intangible assets included in the unaudited condensed

    consolidated statements of operations data above was as follows:




                                             Three Months Ended June 30,               Six Months Ended June 30,
                                           2020                     2019               2020                 2019
                                                                       (in thousands)
Cost of revenues                                  -           $            234     $         47         $         468
Sales and marketing                               -                          -                -                    64
Research and development                          -                        234               48                   468



(3) Restructuring related expenses included in the unaudited condensed

    consolidated statements of operations data above was as follows:




                          Three Months Ended June 30,           Six Months Ended June 30,
                         2020                  2019             2020                2019
                                                   (in thousands)
 Cost of revenues      $       -                       -     $       (7 )       $           6
 Sales and marketing           -                      66             50                   223




Adjusted EBITDA

Adjusted EBITDA is a financial measure not calculated in accordance with
generally accepted accounting principles in the United States ("GAAP"). We
define Adjusted EBITDA as net loss, adjusted for stock-based compensation
expense, depreciation, the amortization of internally developed software,
intangible assets, the capitalization of internally developed software, the
impairment of goodwill and long-lived assets, interest expense, net, the benefit
from or provision for income taxes, other income or expenses, net and the
non-recurring costs or gains associated with acquisitions, divestitures and
restructurings. Adjusted EBITDA for prior periods has been adjusted to conform
to current period presentation. Adjusted EBITDA should not be considered as an
alternative to net loss, operating loss or any other measure of financial
performance calculated and presented in accordance with GAAP. We prepare
Adjusted EBITDA to eliminate the impact of items that we do not consider
indicative of our core operating performance. Investors are encouraged to
evaluate these adjustments and the reasons we consider them appropriate.

We believe Adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons:

• Adjusted EBITDA is widely used by investors and securities analysts to

measure a company's operating performance without regard to items such as

stock-based compensation expense, depreciation and amortization,

capitalized software development costs, interest expense, net, benefit

        from or provision for income taxes, other income or expenses, net and
        costs or gains associated with acquisitions, divestitures and
        restructurings, that can vary substantially from company to company

depending upon their financing, capital structures and the method by which

assets were acquired;

• Our management uses Adjusted EBITDA in conjunction with GAAP financial

measures for planning purposes, including the preparation of our annual

        operating budget, as a measure of operating performance and the
        effectiveness of our business strategies and in communications with our
        Board of Directors concerning our financial performance; and

• Adjusted EBITDA provides consistency and comparability with our past

financial performance, facilitates period-to-period comparisons of

operations and also facilitates comparisons with other peer companies,

        many of which use similar non-GAAP financial measures to supplement their
        GAAP results.


We understand that although Adjusted EBITDA is widely used by investors and
securities analysts in their evaluations of companies, it has limitations as an
analytical tool, and investors should not consider it in isolation or as a
substitute for analysis of our results of operations as reported under GAAP.
These limitations include:

• Depreciation and amortization are non-cash charges, and the assets being

depreciated or amortized will often have to be replaced in the future;

        however, Adjusted EBITDA does not reflect any cash requirements for these
        replacements;

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our

working capital needs or contractual commitments;

• Adjusted EBITDA does not reflect cash requirements for income taxes and

the cash impact of other income or expense; and



    •   Other companies may calculate Adjusted EBITDA differently than we do,
        limiting its usefulness as a comparative measure.


                                       23
--------------------------------------------------------------------------------

The following table presents a reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated:




                                            Three Months Ended June 30,             Six Months Ended June 30,
                                             2020                 2019              2020                2019
                                                                     (in thousands)
Net loss                                $       (3,481 )$       (4,003 )$      (7,452 )$      (8,609 )
Depreciation                                       402                  482             1,295                 981
Amortization of internally developed
software                                           818                  955             1,682               1,705
Amortization of intangible assets                    -                  468                95               1,000
Provision for income taxes                        (521 )                 58              (496 )                91
Stock-based compensation expense                   567                  762             1,013               1,447
Capitalization of internally
developed software                                (418 )               (388 )            (958 )              (870 )
Restructuring related expenses                       -                   66                43                 229
Other income, net                                 (537 )               (532 )          (1,006 )            (1,072 )
Adjusted EBITDA                         $       (3,170 )$       (2,132 )$      (5,784 )$      (5,098 )
      Comparison of the Three and Six Months Ended June 30, 2020 and 2019
Revenues, net



                             Three Months Ended June 30,                   Change                 Six Months Ended June 30,                 Change
                             2020                   2019               $            %              2020                2019             $            %
                                                                              (dollars in thousands)
Revenues, net            $      7,275$       12,476$ (5,201 )       (42 ) %   $     15,935$  25,924$ (9,989 )       (39 ) %




Revenues, net, for the three and six months ended June 30, 2020 decreased $5.2
million and $10.0 million, or 42% and 39%, respectively, as compared to the
corresponding period in 2019. During the preceding 12 months, we experienced
ongoing customer turnover that was not fully offset by new customer bookings.
Additionally, in November 2019, we divested our Perfect Audience business which
contributed $0.7 million and $1.6 million of revenues, net for the three months
and six months ended June 30, 2019, respectively. Revenues, net are inclusive of
$2.3 million and $3.0 million for the three months ended June 30, 2020 and 2019,
respectively, and $4.6 million and $6.0 million for the six months ended June
30, 2020 and 2019, respectively, from the Google Revenue Share Agreement as
described in Note 2 to the condensed consolidated financial statements.

Revenues, net from our customers located in the United States represented 76%
and 74% of total revenues, net for the three months ended June 30, 2020 and
2019, respectively, and 76% and 75% of total revenues, net for the six months
ended June 30, 2020 and 2019, respectively. Revenues, net from the Google
Revenue Share Agreement accounted for 31% and 24% of total revenues, net for the
three months ended June 30, 2020 and 2019, respectively and 29% and 23% of total
revenues, net for the six months ended June 30, 2020 and 2019, respectively.
There were no other customers that accounted for 10% or greater of our revenues,
net for the three and six months ended June 30, 2020 and 2019.

Cost of Revenues and Gross Margin




                             Three Months Ended June 30,                 Change                  Six Months Ended June 30,                   Change
                              2020                  2019              $           %             2020                  2019               $            %
                                                                                 (dollars in thousands)
Cost of revenues          $      4,585$      5,929$ (1,344 )      (23 ) %   $     9,930$      11,740$ (1,810 )       (15 ) %
Gross profit                     2,690                 6,547         (3,857 )      (59 )           6,005                 14,184         (8,179 )       (58 )
Gross profit percentage             37    %               52   %                                      38    %                55   %




Cost of revenues for the three and six months ended June 30, 2020 decreased $1.3
million and $1.8 million, respectively, or 23% and 15%, respectively, as
compared to the corresponding periods in 2019. These decreases were primarily
driven by a reduction in the number of global services and cloud infrastructure
personnel, which for the three and six months ended June 30, 2020 led to a
decrease of $0.3 and $0.6 million, respectively, in compensation and benefits
expense, including stock-based compensation expense, as compared to the same
period in 2019. This reduction in headcount also contributed to decreases in
allocated facilities and information technology costs of $0.1 million and $0.2
million for the three and six months ended June 30, 2020, respectively. We also
experienced decreases of $0.3 million and $0.5 million in hosting costs during
the three and six months ended June 30, 2020, respectively, due to a decline in
the usage of our hosted platform from the corresponding periods in 2019. Our
amortization of intangible assets declined $0.2 million and $0.4 million for the
three and six months ended June 30, 2020, respectively, from the corresponding
periods in 2019, as certain intangible assets became fully amortized in in the
three months ended March 31, 2020. Additionally, for the three months ended June
30, 2020, depreciation and amortization of internally developed software

                                       24

--------------------------------------------------------------------------------


costs decreased by $0.2 million, due primarily to the timing of the
capitalization of certain internal projects, as compared to the corresponding
period in 2019. For the six months ended June 30, 2020, depreciation and
amortization of internally developed software costs increased by $0.4 million
due to a non-recurring depreciation adjustment in the three months ended March
31, 2020.

We expect cost of revenues to decrease year-over-year in absolute dollars as savings from the 2020 Restructuring Plan are realized and we continue our efforts to realign our cost structure with our revenues.


Our gross margin decreased to 37% and 38% for the three and six months ended
June 30, 2020, respectively, as compared to 52% and 55% for the corresponding
periods in 2019. This was primarily due to our revenues, net declining at a
faster rate than the corresponding decrease in costs, in part due to the timing
of revenue recognition from the Google Revenue Share Agreement.

Sales and Marketing



                              Three Months Ended June 30,                 Change                  Six Months Ended June 30,                   Change
                               2020                  2019              $           %              2020                  2019              $            %
                                                                                  (dollars in thousands)
Sales and marketing        $      1,880$      4,087$ (2,207 )      (54 ) %   $      4,192$      8,721$ (4,529 )       (52 ) %
Percent of revenues, net             26    %               33   %          
                            26    %               34   %




Sales and marketing expenses for the three and six months ended June 30, 2020
decreased $2.2 million and $4.5 million, respectively, or 54% and 52%,
respectively, as compared to the corresponding periods in 2019. These decreases
were primarily due to a reduction in global sales support and marketing
headcount, contributing to net decreases for the three and six months ended June
30, 2020 of $1.4 million and $2.6 million, respectively, in personnel-related
costs and $0.3 million and $0.5 million, respectively, in allocated facilities
and information technology costs. The decreases are also a result of reduced
marketing costs during the three and six months ended June 30, 2020 of $0.3
million and $0.6 million, respectively, as we eliminated or shifted the timing
of certain of our marketing activities. As the majority of our restructuring
activities were completed in 2019, we incurred $0.1 million and $0.2 million
less in restructuring costs for the three and six months ended June 30, 2020,
respectively, as compared to the corresponding periods in the prior year.
Finally, we reduced our travel expense $0.1 million and $0.2 million for the
three and six months ended June 30, 2020, respectively, compared to the
corresponding periods in the prior year, as a result of both the reduction in
global sales support and marketing headcount and the travel advisories resulting
from COVID-19.

We expect sales and marketing expenses to decrease year-over-year in absolute
dollars as savings from the 2020 Restructuring Plan are realized and we continue
our efforts to realign our cost structure with our revenues.

Research and Development



                              Three Months Ended June 30,                 Change                  Six Months Ended June 30,                   Change
                               2020                  2019              $           %              2020                  2019              $            %
                                                                                  (dollars in thousands)
Research and development   $      3,338$      4,660$ (1,322 )      (28 ) %   $      6,775$      9,555$ (2,780 )       (29 ) %
Percent of revenues, net             46    %               37   %          
                            43    %               37   %




Research and development expenses for the three and six months ended June 30,
2020 decreased $1.3 million and $2.8 million, respectively, or 28% and 29%,
respectively, as compared to the corresponding periods in 2019. The decreases
were primarily due to a reduction in the number of full-time research and
development personnel, resulting in decreases of $0.9 million and $1.8 million,
respectively, in compensation expense and $0.2 million and $0.3 million,
respectively, in allocated facilities and information technology costs as
compared to the corresponding periods in 2019. Additionally, amortization
expense related to our intangible assets declined $0.2 million and $0.4 million,
respectively, as our intangible assets became fully amortized during the three
months ended March 31, 2020.

We expect research and development expenses to decrease year-over-year in absolute dollars as savings from the 2020 Restructuring Plan are realized and we continue our efforts to realign our cost structure with our revenues.


General and Administrative



                                Three Months Ended June 30,                Change                 Six Months Ended June 30,                   Change
                                 2020                  2019             $          %              2020                  2019              $            %
                                                                                   (dollars in thousands)
General and administrative   $      2,011$      2,277$ (266 )      (12 ) %   $      3,992$      5,498$ (1,506 )       (27 ) %
Percent of revenues, net               28    %               18   %                                     25    %               21   %




                                       25
--------------------------------------------------------------------------------


General and administrative expenses for the three and six months ended June 30,
2020 decreased $0.3 million and $1.5 million, respectively, or 12% and 27%,
respectively, as compared to the corresponding periods in 2020. Compensation and
benefits expense for the three and six months ended June 30, 2020 decreased by
$0.6 million and $1.0 million, respectively, as compared to the corresponding
periods in 2019, primarily due to a reduction in headcount. For the three months
ended June 30, 2020, the decrease in compensation and benefits expense was
partially offset by a $0.4 million change in our provision for bad debts as we
recorded a recovery from bad debts of $0.4 million for the three months ended
June 30, 2019. For the six months ended June 30, 2020, our professional services
fees decreased $0.4 million as we reduced the number of contractors and the
scope of our activities with consultants and other advisors.

We expect our general and administrative expenses to decrease year-over-year in
absolute dollars as savings from the 2020 Restructuring Plan are realized and we
continue our efforts to realign our cost structure with our revenues.

Other Income, Net



                          Three Months Ended June 30,                 Change                 Six Months Ended June 30,                 Change
                         2020                     2019             $          %              2020                  2019             $          %
                                                                           (dollars in thousands)
Other income, net    $        537$        532$    5          1   %   $      1,006$      1,072$  (66 )       (6 ) %




Other income, net, primarily consists of sublease income recorded under
agreements for portions of our San Francisco and our Portland office spaces,
with terms through July 2022 and May 2020, respectively, as well as foreign
currency transaction gains and losses and interest income and expense. For the
three months ended June 30, 2020 and 2019, we earned sublease income of $0.6
million. For the six months ended June 30, 2020 and 2019, we earned sublease
income of $1.1 million. Foreign currency transaction gains and losses and
interest income and expense were not material for the three and six months ended
June 30, 2020 and 2019.

(Benefit from) Provision for Income Taxes



                          Three Months Ended June 30,                Change                  Six Months Ended June 30,                 Change
                           2020                    2019           $          %               2020                    2019           $          %
                                                                           (dollars in thousands)
(Benefit from)
provision for
income taxes          $         (521 )           $     58$ (579 )     (998 ) %   $         (496 )           $     91$ (587 )     (645 ) %



The benefit from income taxes totaled $0.5 million for both the three and six months ended June 30, 2020, primarily due to a partial release of foreign uncertain tax positions and profits earned by our wholly owned foreign subsidiaries.

                        Liquidity and Capital Resources

Since our incorporation in March 2006, we have relied primarily on sales of our
capital stock to fund our operating activities. From incorporation until our
initial public offering ("IPO") we raised $105.7 million, net of related
issuance costs, in funding through private placements of our preferred stock. In
March and April 2013, we raised net proceeds of $109.3 million in our IPO. From
time to time, we have also utilized equipment lines and entered into finance
lease arrangements to fund capital purchases. As of June 30, 2020, our principal
source of liquidity was our unrestricted cash and cash equivalents of $10.8
million. Our primary operating cash requirements include the payment of
compensation and related expenses, as well as costs for our facilities and
information technology infrastructure.

We maintain a $0.9 million irrevocable letter of credit to secure the
non-cancelable lease for our corporate headquarters in San Francisco and a $0.1
million irrevocable letter of credit to secure the non-cancelable lease for our
office in Paris. These balances are reflected as restricted cash on the
consolidated balance sheets of the accompanying condensed consolidated financial
statements.

We maintain cash balances in our foreign subsidiaries. As of June 30, 2020, we
had $10.8 million of unrestricted cash and cash equivalents in aggregate, of
which $1.3 million was held by our foreign subsidiaries. On December 22, 2017,
the United States enacted the Tax Cuts and Jobs Act, or the TCJA, which
instituted fundamental changes to the taxation of multinational corporations.
Among these changes is a mandatory one-time transition tax on the deemed
repatriation of the accumulated earnings of certain of our foreign subsidiaries,
and a tax on earnings of foreign subsidiaries in excess of a specified return on
the subsidiaries' tangible assets, known as the Global Intangible Low-Taxed
Income, or GILTI. We completed our analysis of the accounting for the transition
tax in the fourth quarter of 2018 and there was no tax due as a result of
significant accumulated losses in our foreign subsidiaries. We also determined
that no GILTI inclusion would be required in the fourth quarter of 2019, as our
foreign subsidiaries have accumulated significant losses. If funds held by our
foreign subsidiaries were needed for our U.S. operations, we would be required
to accrue U.S. tax liabilities associated with the repatriation of these funds.
However, given the amount of our net operating loss carryovers in the United
States, such repatriation will most likely not result in material U.S. cash tax
payments within the next year. Additionally, we do not believe that foreign
withholding taxes associated with repatriating these funds would be material.

                                       26

--------------------------------------------------------------------------------



On March 14, 2019, we filed a shelf registration statement on Form S-3 with the
SEC, which was declared effective by the SEC on May 10, 2019, under which we may
offer our common stock, preferred stock, debt securities, warrants, subscription
rights and units having an aggregate offering price of up to $50.0 million. As
part of the shelf registration statement, we entered into an equity distribution
agreement with JMP Securities LLC, or JMP Securities, under which we may offer
and sell shares of our common stock having an aggregate offering price of up to
$13.0 million through an at-the-market offering program administered by JMP
Securities. We are not required to sell any of our stock under this program. JMP
Securities is entitled to compensation of up to 5.0% of the gross proceeds from
sales of our common stock pursuant to the equity distribution agreement. We
intend to use any net proceeds from the sale of securities under the equity
distribution agreement primarily for working capital and general corporate
purposes. For the six months ended June 30, 2020, no shares were sold under the
equity distribution agreement. For the year ended December 31, 2019, we sold 658
thousand shares of our common stock under the equity distribution agreement, and
received proceeds of $1.6 million, net of offering costs of $0.2 million, at a
weighted average sales price of $2.82 per share. The total amount of cash that
may be generated under this equity distribution agreement is uncertain and
depends on a variety of factors, including market conditions and the price of
our common stock. As of June 30, 2020, we had common stock with an aggregate
offering price of up to $11.1 million available for issuance under the equity
distribution agreement.

We have incurred significant losses in each fiscal year since our incorporation
in 2006, and we expect to continue to incur losses and negative cash flows over
the next several years. Based on our current and anticipated level of
operations, including our internal forecasts and projections, we believe that
our existing cash, cash equivalents and restricted cash will be sufficient to
fund our operations for at least the next 12 months. Our ability to achieve our
business objectives and to continue to meet our obligations is dependent upon
maintaining a certain level of liquidity, which could be impacted by several
factors, including market conditions and the effect of the COVID-19 pandemic.
The global outbreak of COVID-19 has disrupted economic markets and the full
economic impact, duration and spread of COVID-19 is uncertain at this time and
difficult to predict considering the rapidly evolving landscape. Since mid-March
2020, some of our customers have reduced the amount of digital advertising spend
that they manage using our products, which has had an adverse effect on our
results of operations, and some of our customers have requested extended payment
terms, reduced fees or fee waivers, early contract terminations and other forms
of contract relief. Although we are pursuing additional sources of liquidity,
including additional equity and debt financing, there is no assurance that any
additional financing will be available on acceptable terms, or at all. In July
2020, we commenced a restructuring plan that included a global
reduction-in-force and other cost saving actions to reduce our operating
expenses and address the impact of the COVID-19 pandemic on our business (the
"2020 Restructuring Plan"). The 2020 Restructuring Plan is expected to result in
the reduction of our global workforce by approximately 60 employees,
approximately half of which are located outside of the United States. We
estimate that we will incur approximately $1.5 million to $2.0 million of cash
expenditures in connection with the Restructuring Plan, substantially all of
which relates to severance costs. We expect to recognize the majority of
the pre-tax restructuring charges by the end of the quarter ending September 30,
2020. Our ability to continue as a going concern is dependent upon our ability
to reduce our expenses and manage our cash flows, including successfully
implementing the 2020 Restructuring Plan and to improve customer retention rates
and increase new bookings.

In May 2020, we entered into a loan agreement with the lender for the loan in an
aggregate principal amount of $3.3 million (the "Loan") pursuant to the Paycheck
Protection Program (the "PPP") under the Coronavirus Aid, Relief, and Economic
Security (CARES) Act. We received the Loan proceeds on May 12, 2020. We expect
to apply to the Lender for forgiveness of approximately $2.8 million due under
the Loan, but no assurances can be provided as to the amount or timing of any
potential Loan forgiveness.

© Edgar Online, source Glimpses

All news about MARIN SOFTWARE INCORPORATED
2020MARIN SOFTWARE INCORPORATED : Happy Holidays From Marin
PU
2020MARIN SOFTWARE INCORPORATED : Top Search Tips For The End Of The Year
PU
2020MARIN SOFTWARE INCORPORATED : Getting the most from your marketing dollars
PU
2020MARIN SOFTWARE INCORPORATED : Introducing Marin's BI-Connect
PU
2020MARIN SOFTWARE INCORPORATED : INC Management's Discussion and Analysis of Financ..
AQ
2020MARIN SOFTWARE : 3Q Earnings Snapshot
AQ
2020MARIN SOFTWARE INC : Results of Operations and Financial Condition, Financial St..
AQ
2020MARIN SOFTWARE INCORPORATED : Announces Third Quarter 2020 Financial Results
PU
2020Earnings Flash (MRIN) MARIN SOFTWARE Reports Q3 EPS $-0.38
MT
2020MARIN SOFTWARE : Announces Third Quarter Financial Results
PR
More news