RetailMeNot Swings to a Loss, Cuts Guidance - WSJ
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`https://www.wsj.com/articles/retailmenot-swings-to-a-loss-cuts-guidance-1438770758
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`BUSINESS | EARNINGS
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`RetailMeNot Swings to a Loss, Cuts
`Guidance
`
`Shares plunge 34% and touch an all-time low in morning trading
`
`By Lisa Beilfuss
`Updated Aug. 5, 2015 11:48 am ET
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`Online coupon site RetailMeNot Inc. swung to an unexpected loss in its second quarter,
`hurt by weakness in search traffic.
`
`Shares plunged 34% and touched an all-time low in morning trading.
`
`The Austin-based company, which went public two years ago, aggregates retailers’ digital
`coupons, posts them on its website and smartphone application and then collects
`commissions from retailers based on purchases.
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`“Weakness in organic search, which began in late May, negatively impacted both our
`desktop and mobile web traffic resulting in disappointing overall results,” Chief
`Executive Cotter Cunningham said in Wednesday’s news release.
`
`On a call with analysts, Mr. Cunningham said the drop in traffic was “due to algorithmic
`changes affecting our search ranking, similar to what we experienced about a year ago.”
`The CEO said there has been a “sort of disruption” in a portion of the keywords the
`company tracks.
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`As a result, the company also slashed its full-year outlook and issued downbeat guidance
`for the current quarter.
`
`While mobile online transaction net revenue grew 91% over the period, growth
`decelerated from the prior quarter and online transactions accounted for just 9% of
`revenue.
`
`https://www.wsj.com/articles/retailmenot-swings-to-a-loss-cuts-guidance-1438770758?mg... 10/3/2019
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`Honey Science Corp.
`Exhibit 2005
`RetailMeNot v. Honey
`IPR2019-01565
`Ex. 2005-0001
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`RetailMeNot Swings to a Loss, Cuts Guidance - WSJ
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`Page 2 of 2
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`Meanwhile, desktop online transaction revenue—which includes tablets and represents
`the bulk of the company’s top line—continued to deteriorate. Revenue from desktop
`online transactions dropped 25% in latest quarter, on the heels of a 14% decline a quarter
`earlier.
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`Visitors to the site rose, but at a slower rate than in the first quarter. Total visits
`increased 6% to 164 million, while monthly mobile unique visitors totaled 18.4 million,
`up 44% from a year earlier.
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`On the earnings call, Mr. Cotter said desktop web traffic declined a much worse-than-
`expected 16%.
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`Overall, the company reported a loss of $1.6 million, down from a profit of $4.3 million a
`year earlier. On a per-share basis, RetailMeNot reported a loss of 3 cents versus a profit
`of 8 cents in last year’s quarter.
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`Excluding certain items, earnings per share fell to 9 cents from 21 cents. Revenue
`declined 11% to $53.2 million
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`Analysts polled by Thomson Reuters expected 14 cents in earnings per share. The
`company had projected $57 million to $60 million in revenue.
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`For the full year, the company now expects to book $231 million to $239 million in
`revenue, down from its earlier guidance of $275 million to $285 million. Adjusted
`Ebitda—earnings before interest, taxes, depreciation and amortization, a profitability
`measure that approximates for cash flow—will be between $56 million and $64 million,
`down sharply from an earlier projection of $92 million to $100 million.
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`RetailMeNot said it expects $47.5 million to $50 million in third-quarter revenue and $5
`to $7 million in adjusted Ebitda, far short of the $69.9 million in revenue and $19.1
`million in Ebitda analysts anticipated.
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`“We clearly aren’t moving fast enough and we remain susceptible to the ongoing
`volatility of organic search results,” Mr. Cotter said.
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`Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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`Copyright © 2019 Dow Jones & Company, Inc. All Rights Reserved
`This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit
`https://www.djreprints.com.
`
`https://www.wsj.com/articles/retailmenot-swings-to-a-loss-cuts-guidance-1438770758?mg... 10/3/2019
`
`Ex. 2005-0002
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`