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Q1 2013 Earnings Call
May 02, 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
Kip N. Paulson - Jefferies & Company, Inc., Research Division
Heath P. Terry - Goldman Sachs Group Inc., Research Division
Matthew Chesler - Deutsche Bank AG, Research Division
Previous Statements by SCOR
» comScore's Management Presents at Deutsche Bank's DbAccess 21st Annual Media and Telecom Conference (Transcript)
» comScore's CEO Presents at Morgan Stanley Technology, Media & Telecom Conference (Transcript)
» comScore Management Discusses Q4 2012 Results - Earnings Call Transcript
Kenneth J. Tarpey
Thank you, Clinton. Good afternoon, everyone, and welcome to comScore's earning call for the first quarter of 2013. Again, I'm Ken Tarpey, the CFO of comScore. And with me today is Magid Abraham, our President, CEO and Co-Founder; Serge Matta, our President of Commercial Solutions; and Cameron Meierhoefer, our Chief Operating Officer.
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 disposition of certain lines of business; 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 second quarter and the 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, 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 Relations website, a reconciliation of non-GAAP financial measures discussed during today's call to the most directly comparable GAAP financial measure. For the link to our Investor Relations 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 for joining us today. Let me first cover some highlights of the quarter, and then Ken will provide some more detail on our financial performance. We also have some slides posted on our IR website that accompany our comments today and it might be useful for you to follow along with us.
During our fourth quarter 2002 earnings call back in February, we outlined 4 key priorities for comScore in 2013. Number one is to maintain our measurement leadership, especially in mobile and multi platform; number two is to continue our campaign measurement progress and rollout globally; number three, capitalize on the Digital Analytix momentum; and number four, focus on executions, particularly driving to improve margins and to increase free cash flow.
I'm happy to say that we are making progress on all 4 priorities. This progress helped us deliver strong results for the first quarter of 2013. We reported record quarterly revenues of $68.8 million, which is up 11% over the first quarter of last year. On a non-GAAP pro forma basis, excluding the financial performance of our non-health copy testing and configuration manager products, which we divested during the quarter, revenue grew 12% to $67.5 million. Our record revenues were driven by the continued strength in our Audience Analytics business with notable contribution from our mobile and multi-platform products. Our momentum in campaign measurement has never been stronger. We're also pleased with the marketplace momentum of our enterprise Digital Analytix software and the status of early implementations of deals sold last year.
Finally, our execution was laser-sharp and delivered better than expected margins and record free cash flow. Despite our seasonally lower margins in the first quarter, our focus on execution and operating leverage resulted in 19% adjusted EBITDA margin, representing an adjusted EBITDA level of $12.6 million on a pro forma basis. In addition, we generated record quarterly free cash flow of $16.9 million. All in all, it was a strong quarter and a strong start for the year.
Moving forward, I have on Slide 7, a definition for a metric that we're going to use in lieu of booking, and that's called CV or contract value. It is basically the same metric as what we have used before but we wanted to be very specific about what it means because some people have different definitions of bookings, sometimes including multiyear -- the value of multiyear contracts, sometimes not. So to be very precise, contract value is the value of contract commitment in the first 12 months of the contract. So any contract that's 12 months and shorter, it includes the full value of that contract. A contract that's longer than 12 months will include only the first year.