Q4 2012 Earnings Call
February 14, 2013 5:00 pm ET
Kenneth J. Tarpey - Chief Financial Officer and Principal Accounting Officer
Magid M. Abraham - Co-Founder, Chief Executive Officer, President and Director
Serge Matta - President of Commercial Solutions
Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division
Youssef H. Squali - Cantor Fitzgerald & Co., Research Division
Matthew Chesler - Deutsche Bank AG, Research Division
Shyam Patil - Raymond James & Associates, Inc., Research Division
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Kenneth J. Tarpey
Good afternoon. Thank you very much. Welcome to comScore's Earnings Call for the Fourth Quarter and the Full Year of 2012. Again, I'm Ken Tarpey, CFO of comScore. With me today is Magid Abraham, our President, CEO and Co-Founder; also with us today are Cam Meierhoefer, our Chief Operating Officer; and Serge Matta, our President of Commercial Solutions, will be available during the question-and-answer period.
Before we begin, please allow me to read the following disclaimer regarding our use of forward-looking information and non-GAAP financial measures. During the course of today's call, as well as during any question-and-answer periods that may follow, representatives of the company may make forward-looking statements within the meaning of the Security Act of 1933 and the Securities Exchange Act of 1934 regarding future events or performance of the company that involve risks and uncertainties, including, without limitation, the strength of comScore's business; expectations as to opportunities, including new customers and markets for comScore; expectations as to the growth and composition of comScore's customer base and renewal rates; expectations regarding the impact and benefits of particular lines of business and products; expectations regarding the relative quality of comScore's products; assumptions regarding tax rates and net operating loss carryforwards; and forecasts of future financial performance for the first quarter and full year of 2013, including related growth rates, exchange rates and assumptions.
Such statements are only predictions based on management's current expectations. Actual events or results could differ materially from those predictions due to a number of risks and uncertainties, including those identified in the documents comScore files from time to time with the Securities and Exchange Commission. Those documents specifically include, but are not limited to, comScore's Form 8-K filed earlier today relating to this call; comScore's Form 10-K for the period ending December 31, 2011, and comScore's Form 10-Q for the period ending September 30, 2012.
We caution you not to place undue reliance on any forward-looking statements included in these presentations, which speak only as of today. We do not undertake any obligation to publicly update any forward-looking statements to reflect new information after today's call, or to reflect the occurrence of unanticipated events.
In addition we may also reference certain non-GAAP financial measures in the course of our presentation. You will find in our press release and on our Investor Section's website a reconciliation of non-GAAP financial measures discussed during today's call to the most directly comparable GAAP financial measure. The link to our investors section of our website is ir.comscore.com. And our results are posted under press releases.
With that, I will now turn the call over to Magid.
Magid M. Abraham
Thank you, Ken, and thank you all for joining our earnings conference call for the fourth quarter of 2012. We have some slides that accompany our comments and it might be helpful to follow them.
I'll first provide some highlights for the quarter of the year and then Ken will provide more detail on our financial performance. Look, there is no question that 2012 was a tough year, but I am happy to report that we ended the year on a strong note. I'm happy with Q4 results. I'm also excited about the progress we're making in our transformation strategy from a pure measurement company to a realtime analytics company.
As you see on Slide 5, revenues reached a record of $68.4 million in the fourth quarter, and Q4 revenue growth -- rather, to a year ago was 9% on a reported basis and 12% on a pro forma basis. Pro forma revenue is adjusted for the non-health portion of our offline copy testing business and the elimination of a former Nexius application called Configuration Manager, that we will discuss a little bit later.
Adjusted EBITDA came in at $12.2 million, representing an adjusted EBITDA margin of 18%. During our last earnings call, we provided a measure of trailing 12 months bookings as we believed that bookings growth at this stage of comScore's evolution can provide a better sense of our overall business momentum. As such, we plan to continue to provide this metric for this quarter and during 2013.
Trailing 12 months booking grew by 15% in the fourth quarter on a reported basis, as Slide 6 shows, and they grew by 19% on a pro forma basis. On the other hand, the pro forma revenue growth in the fourth quarter was 12% and -- for the fourth quarter and 13% for the entire year. As you can see, bookings growth exceeds revenue growth for the full year by 6 percentage points. The lag is due to our ratable Software-as-a-Service business model for most of our new products, and the bookings to revenue conversion lags from these products. We believe these strong booking growth rates are a good indicator of the underlying health and long-term growth of our business.