Greg Kleiner - IR David Yovanno - CEO John Kaelle - EVP and CFO.

Greg Dunham - Goldman Sachs John Byun - UBS Karen Russillo - Wells Fargo.

Greetings and welcome to the Marin Software Fourth Quarter 2014 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Greg Kleiner, Investor Relations at Marin Software. Please begin..

Thank you. Good afternoon, everyone and welcome to Marin Software’s fourth quarter 2014 and year-end earnings conference call. Joining me today are David Yovanno, Marin’s Chief Executive Officer and John Kaelle, Marin’s EVP and Chief Financial Officer.

By now you should have received a copy of our earnings release, which crossed the Wire approximately one hour ago. If you need a copy of the release, please go to investor.marinsoftware.com to find electronic version.

Call participants are advised that the audio of this conference call is being recorded for playback purposes and that a recording of this call will be made available on the Investor Relations section of our website within a few hours.

Before we begin, I’d like to note that our discussion today will include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.

These forward-looking statements include statements about our business outlook and strategy, statements about historical results that may suggest trends for our business. We make these statements as of February 05, 2015 and disclaim any duty to update them.

For more information regarding these and other risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the sections entitled Risk Factors in our most recent report on Form 10-Q and our other filings with the SEC.

This presentation contains certain financial performance measures that are different from the financial measures calculated in accordance with GAAP and may be different from calculations or measures made by other companies.

A quantitative reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is available in our fourth quarter 2014 earnings press release. With that, let me turn the call over to Dave..

Thank you. Good afternoon and welcome to everyone on the call today. We've made several significant enhancements to the business over the course of 2014, from executive leadership, the sales management to our first acquisition, to the realignment of our go-to-market model to better support our platform vision across search, display, and social.

These changes are now largely complete. Now, with the acquisition of SocialMoov that we announced today, we are taking another significant step towards realizing our goals in the Ad Cloud market. I'll talk more about what SocialMoov means to the future of Marin in a moment, but let me start with an update on the business.

As John will describe in his remarks, our Q4 results came in above our guidance on both the top and bottom line. The strong seasonal spending on our platform helped to offset the continued headwinds from foreign exchange movements.

I'm also pleased to report that our customers around the world use our platform to manage 7.2 billion of any life ad spend as of year and in 2014 up 20% from the $6 billion figure we reported that the end of 2013. The size and scope of this spend reinforces our position as the leading independent Ad Cloud vendor worldwide.

In the fourth quarter we served 818 active advertisers up 22% year-over-year. However, this was down slightly on a sequential basis. We recently established service tiers focused on dedicating more support to larger and more profitable customers as part of a conscious strategy to improve the efficiency of our sales and customer success efforts.

As a result, we allowed some smaller customers to churn off the platform as we refocus our time and attention on larger customers.

This was just one of the actions we took over the course of Q4 as we continue to make improvements on our go-to-market model focused on both improving productivity and training our teams to better execute on a broader messaging.

Beyond an increased focus on larger customers we also moved responsibility for cross-selling to our sales teams and away from the customer success team as well as selling to new brands within our existing agency clients. We believe that the continued involvement of sales will allow us to address this portion of our business more effectively.

In addition, with the completion of our sales kickoff event in early January we have now completed the realignment and training of our global sales team. The event was a big success and the team now begins the year fully focused on our multiproduct platform and tighter execution on our pipeline.

We are assuming that it will still take a few quarters for the team to fully hit their stride and translate new bookings into revenue, but the adjustments to our sales force are now largely behind us.

To help accelerate our ambitions and further advance our position in the Ad Cloud market, today we announced the signing of the acquisition of SocialMoov, a prominent social media platform serving agencies and brands worldwide.

Based in Paris, SocialMoov is one of the leading independent companies focused on helping advertisers and agencies measure, manage and optimize their social spending.

We expect the acquisition to close later this month and once complete the transaction will allow us to advance our social functionality significantly and create one of the industry's most comprehensive social advertising solutions. SocialMoov currently supports Facebook and Twitter as well as all of their ad units.

In fact, SocialMoov also plans to debut support for LinkedIn in the coming months. As we completed our due diligence SocialMoov consistently received high marks for both innovation and their commitment to customer success. With the acquisition of SocialMoov, we have assembled the critical components of our platform vision.

Our Perfect Audience acquisition from last June gave us a demand side platform or DSP with bitable display and retargeting capabilities. Once completed, we believe the SocialMoov purchase will give us best in class social capabilities.

This is all in addition to our leadership position in search which provides unique purchase and other intent data flowing from that business. When combined and managed in a single interface through our audience marketing suite our Ad Cloud offering provides an unmatched value for advertisers and their agencies.

We are now the only independent vendor to provide this breadth and depth of functionality and to do so in an open transparent manner. We anticipate that the power of our broad platform will help fuel both our ability to attract new brands and provide a significant add-on opportunity into our installed base.

We also have line of sight to getting the non-search component of our revenue about 10% on a quarterly basis this year.

Overall, we believe Marin is uniquely positioned to benefit from the larger industry trends in play right now, the advertisers shipping their spend from managed services to open platforms, point solutions being replaced by integrated cloud offerings and supply becoming programmatic and access to unique data being the most critical differentiator.

We saw continued signs of our expanded product vision taking hold in the fourth quarter as more and more customers are realizing the benefits of combining search, displays, and social functionality in a single platform. One example was a recent win with RedPin a high growth technology powered real estate brokerage.

RedPin took a tiered approach to on boarding the Marin advertising club. So I think with search and social and then most recently adding Marin display.

Having struggled in the past when it came to connecting the dots between our online advertising initiatives and the sales process Marin provides RedPin a turnkey solution to optimizing their search, social display campaigns against CRM data such as leads, sales and lifetime value metrics.

With this new capability, RedPin is now empowered to make more informed decisions about their advertising buys and automated optimization across a coordinated set of campaigns. Given their unique real estate business model, RedPin also has highly customized bidding and optimization requirements specifically depended on geography.

With Marin, RedPin gains increased visibility and control over the digital advertising campaigns, ultimately improvement their ability to capitalize and respond to changes within the real estate industry. Another compelling example was SeatGeek a search engine for finding tickets for live events.

SeatGeek originally came to us for a display retargeting solutions after finding publisher tools too limiting for what they were trying to accomplish. After examining the value of our broader solution set SeatGeek selected Marin's platform to manage and optimize their paid search campaigns as well.

They were also able to utilize shared user and campaigned data across both our display retargeting and search efforts. Leveraging Marin, SeatGeek boosted active versions almost immediately by 20% and doubled their click to rate with dynamic Facebook retargeting.

With Marin's single tracking pixel SeatGeek was able to streamliner their tagging structure enabling their team to become more efficient and retarget at a more granular level.

Likewise the significant time-saving SeatGeek experience using Marin's automatic bidding algorithm allowed them to focus more on huge projects such as testing ads and so identified top performing creative. In the first month after deploying Marin, SeatGeek experienced 140% increase in traffic, month-over-month.

Another brand that signed with Marin in Q4 is Hootsuite a leading social media management system. In evaluating platforms Hootsuite saw a solution that allowed a degree of customization and control as the company looked to expand its marketing internationally.

Using our dimensional functionality, Hootsuite is able to create customer reports based on their unique business goals. Using Marin's proven analytics to action reporting Hootsuite is now able to make changes directly from their reports.

The flexibility of our platform compared with the visibility Marin provides and the campaign performance played a vital role Hootsuite selecting Marin in an effort to reduce time spent on campaign management. Hootsuite credits Marin with enabling them to invest more time on new opportunities and to grow their business.

In Q4 we also continued to expand the functionality of our products by launching several enhancements across publishers and channels.

Across Google, Yahoo, Bing and Facebook, we launched a number of new advancements designed to further optimize reporting, work flow and campaign automation along with specific functionality to better understand performance across devices and support locations based targeting.

To better support our multichannel vision we released the ability to budget and forecast on a monthly basis at the client account level across search, social and display.

We also greatly enhanced our ability to identify and target users across devices and platforms allowing marketer to create audience once then push ads through the appropriate medium. This capability has become especially important as we saw advertisers spend nearly 50% of their search budget on mobile devices during this past quarter.

In summary, I'm very proud of the hard work the Marin team has put in over the course of the year. The opportunity to help visual advertisers around the world manage their search, display, and social spend on one platform is significant.

We are proud to be leading the charge in the evolution of the Ad Cloud market with our open independent SaaS platform. We entered the New Year fully focused and aligned around this vision and look forward to the road ahead. So with that, let me turn the call over to John to discuss the financials in more detail..

for the full year 2015 we expect revenues to range from $114 million to $116 million and non-GAAP loss from operations to range from a loss of $21 million to a loss of $19 million. This should lead to a non-GAAP net loss per share in the range of $0.60 to $0.55 based upon our weighted average share count of $37.3 million.

Finally, consistent with our previously stated goal, I would like to reiterate that we anticipate reaching adjusted EBITDA breakeven in the fourth quarter of 2015.

For the quarter ending March 31, we expect revenues to range from $25.5 million to $26.0 million and non-GAAP loss from operations to range from a loss of $7 million to a loss of $6.5 million. This should lead to a non-GAAP net loss per share in the range of $0.21 to $0.19 based upon our weighted average share count of $36.1 million.

As Dave indicated, we are pleased to report Q4 results above our guidance on both the top and bottom line. In addition, we are excited to have completed the enhancements to our go-to-market model and our second acquisition.

We entered the New Year focused and ready to capitalize on the emerging Ad Cloud market with what we believe is unique value proposition for advertisers around the world. With that, I want to thank you for your time and I'll turn it back over to the operator to open it up for questions..

Hi, thanks for taking my question.

I guess first off on the sales prioritization, and the focus on broadening of the capabilities beyond search, you mentioned six months what gives you the confidence that six months is the time when these people are going to be fully ramped and what are the early signs that you've seen thus far because this is something that you've talked about now for a couple of quarters I know it's really just been implemented, but maybe some of the lessons learned, and some other data points there first?.

Sure, so this is Dave. So we just completed our sales kickoff event in early January, that was essentially a climax for a lot of the training and realignment that was happening in the second half of last year. At that event we held a lot of big offs demo sessions and what not. We’re already starting to see the pipelines build up.

So when we talk about a couple of quarters for it to play out the pipeline that's what we're anticipating to be length of the sales cycles for opportunities to be created and closed, and start to translate to revenue And we've already started to see essentially traction towards that end..

Okay and then one other from me, you know, the advertiser metric was obviously down in the quarter. We typically would expect this to be up given the seasonality of the spend.

Anything that point to, that would cause that number to be as weak as it was?.

Yeah, hey Greg, it's John. Just in the prepared comments we've talked about the fact that some of the smaller advertisers there was a conscious decision to let those churn off the platform.

As we've been pushing for productivity increases, efficiencies within the customer success organization we have rationalized service levels for clients and some of the smaller advertisers, some of this was just a conscious effort to let them churn away versus in prior periods we might have done more to make a save there.

Thanks, guys..

You see that reflected in the increasing gross margin as well. So, that’s an indicator of the progress there..

The next question comes from Brent Thill of UBS. Please go ahead..

Hi. This is John Byun for Brent Thill. If you could talk a little bit more on the SocialMoov acquisition, what feature does it have that the Marin didn’t already have on a social side? And maybe a little bit around the organizations, anything on the headcount or what sort of run rate they're doing and maybe geographic presence? Thank you..

Yes. So, thanks for the question. We're excited about the acquisitions SocialMoov. It does complement our existing social product really well. It gives us a few things that we didn’t have already. One is additional support for Twitter. They have plans to announce support for LinkedIn in a number of months as well.

They support all ad units for both Facebook and Twitter now, including Facebook video, really when you kind of raise it up a couple levels, one other feature that I think is very innovative and interesting as well, is they've developed unique capability to kind of synchronize TV commercials in Europe with the social spends.

They can time the two together and there is lot of interest, especially from brand advertisers and that sort of capability. So, they really demonstrate a strong jobs [ph] on the innovation front. Beyond that, there was, what we did in this partnership is really add dedicated focused team. It’s a best-in-class product.

They've got strong position in the market. But it’s a dedicated team, they kind of maintain that best-in-class position within the iCloud of Marin and that’s what we're excited about. They have a very strong presence in Europe. They were at a crossing point looking to penetrate the U.S. market.

They either needed to raise money to do that or partner with a larger company like Marin. And we think it’s an amazing fit considering our distribution within the US market, especially, we think it’s going to be good thing for us..

Thank you..

[Operator Instructions] Our next question comes from Karen Russillo of Wells Fargo Securities. Please go ahead..

Hi, thank you.

John, I was just – first, I was wondering if you could tell us what Perfect Audience contributed in Q4 to the total revenue?.

Yes. Hey, Karen, it’s John. We're not breaking up the contribution of Perfect Audience. We were pleased with the contributions, have been pleased today with how that products ramping.

Dave talked about in his script the fact that between Perfect Audience and then the acquisition of SocialMoov that we've got line of sites to that part of the business cresting over 10% in the upcoming quarters..

Okay. Then I guess, maybe another way. If we look at the guidance for next year and the FX being a negative 4 points hit, and then you have the contribution from SocialMoov and then Perfect Audience probably add, you said a couple of million in revenue, would that feathers would add maybe a couple points of growth.

So if we're looking at taking the two pieces together, should the – it really be more like a 2% hit, is what we should see for thinking about organic revenue growth?.

Karen, I am not sure if I follow your math there. We talked about the guidance range being 14 to 16, right on that, and the growth rates being 15% to 17% on full year and then we talked about the FX hit on the full year was 4%. So, roughly at a $4 million deduct on a year-over-year comparison.

And then we did give a – we said that SocialMoov would contribute a few million dollars on to the year which is contemplated in the guidance..

So, it’s almost an offset?.

Almost an offset, sure..

Okay. Thank you very much..

There are no further questions at this time. So this will conclude today's conference. Thank you for your participation. You may now disconnect your lines at this time..