Daily Research News Online no. 29374 - Comcast Deal Sweetens Tough Financials for Comscore

Comcast Deal Sweetens Tough Financials for Comscore

February 28 2020

Comscore has reported financial results for the quarter and full year ended December 31st 2019, with revenue and EBITDA declining but some indications in Q4 that a cost-cutting turnaround strategy is taking effect. The firm has also announced a data deal with Comcast.

Bill Livek Q4 revenue was down 13% to $95.2m, the result of a decline in revenue from syndicated digital products and national TV, partially offset by local TV revenue, which increased 35%. Adjusted EBITDA fell from $6.3m a year earlier to $5.5m. Revenue for Ratings and Planning fell from $74.8m in Q4 2019 to $66.8m a year later, while Analytics and Optimization revenue fell from $23.9m to $17.7m, due to lower digital custom marketing solution sales and Lift revenue, and offset partly by higher revenue from Activation products. Movies Reporting and Analytics revenue rose a fraction from $10.6m to $10.7m. Overall net loss was $21.4m, a loss of $(0.31) per share, compared to a net loss of $27.2m, or $(0.46) per share, a year earlier.

For the full year 2019 revenue was down 7.4% to $388.6m; and adjusted EBITDA down 62% from $16.4m to $6.2m. Movies Reporting and Analytics revenue was up slightly, from $41.7m to $42.3m, but other divisions showed significant falls: Ratings and Planning revenue falling 4.8% to $271.6m, while Analytics and Optimization revenue fell steeply, by 19.2% to $74.7m, 'primarily driven by lower sales and deliveries of digital custom solutions, survey and Lift products' according to the company. Activation products continued to experience year-over-year growth, off-setting the decline slightly.

The company took non-cash impairment charges totalling $241.6m relating to an intangible asset and a substantial goodwill writedown. For 2020, it is forecasting revenue in the range $390m - $410m, driven by growth in TV and addressable advertising, and a slower decline to stabilization in syndicated digital revenue; and an adjusted EBITDA margin of 7% to 10% of revenue, with the impact of 2019 cost reductions and a continued focus on expenses.

Also today the firm announced a coup in the form of a measurement deal with broadcaster Comcast Corp. Comcast will disclose its long-protected set-top-box data for cable TV system subscribers to Comscore, 'greatly improving' the latter's direct measurement of television households across the US, according to Comscore CEO Bill Livek. Livek calls this 'a major step in our ongoing journey toward more precise measurement, helping us develop better products to serve our customers and drive revenue growth in the coming years'. Comcast had 21.4m subscribers as of November 2019, making it the largest cable operator in the country.

Livek says the Q4 figures show the firm's turnaround plan 'is working'. He adds: 'We are encouraged by our operating performance, particularly in syndicated digital which showed improvement in the quarter, and local TV. We will continue our focus on managing expenses while we shift our efforts towards revenue growth... Today, we are also announcing a measurement agreement with Comcast that will greatly improve our direct measurement of television households across the U.S. It is a major step in our ongoing journey toward more precise measurement, helping us develop better products to serve our customers and drive revenue growth in the coming years'.

The markets, which had anticipated poor results over the past month with a c.1/3 fall in the firm's rollercoaster share price, reacted well to the combination of announcements, with stock recovering from under $3 yesterday morning to $3.58 at time of going to press.

Web site: www.comscore.com .