YuMe Stock Dives As Company Loses Direct Clients Following Programmatic Launch

Video ad tech firm YuMe on Monday released its second-quarter 2015 earnings report, falling short of expectations and seeing its stock fall over 25% as a result.

The company reported revenue of $40.4 million during the quarter, the same amount reported during the second quarter of 2014.

The company also reported a net loss of $5.8 million.

“We had a disappointing quarter,” acknowledged Jayant Kadambi, chairman and CEO of YuMe.

YuMe has attempted to pivot from a video ad network to more of a programmatic tech firm. Some of its biggest advancements in the programmatic space came during the second quarter of 2015, including the launch of a programmatic video marketplace.

advertisement

advertisement

The marketplace rounded out YuMe’s ad tech stack, as the company also offers a DSP (for buyers), an SSP (for sellers) and a data management platform (DMP) for everyone.

But the transition has not been as smooth as YuMe had hoped. “We are off to a good start with the programmatic launch,” Kadambi asserted in the earnings call, before adding: “However, this initiative resulted in missteps with the handful of larger accounts in our direct channel.”

The company’s emerging focus on programmatic has rubbed its existing direct clients the wrong way -- so much so that YuMe even lost customers as a result.

Kadambi acknowledged that it will take some time to recover from the loss of clients, adding that he “didn’t manage [the situation] closely enough because of the focus on programmatic growth opportunities.”

Despite this, the company has no plans to remove itself from the programmatic path.

“We are optimistic that our direct sales and programmatic channel approach will succeed over time,” Kadambi said, noting that the company is “addressing” the issues its direct clients have.

YuMe is projecting revenue during the third quarter of 2015 to be in the range of $36 million and $40 million.

Next story loading loading..