• by Tobi Elkin  @tobielkin, October 25, 2016

Programmatic marketing platform Rocket Fuel Inc. reported third-quarter earnings late Tuesday, with net revenue of $62.6 million, slightly below the company’s guidance of $63 to $66 million.

The company cited unexpected weakness in its business in the EMEA region and unpredictability in the political sector as causes for the lower-than-predicted performance.

Separately, the company also announced that Stephen Snyder will join the company as CFO Nov. 10.

Rocket Fuel CEO Randy Wootton said that the weakness was offset by growth in the company’s platform solutions business, which saw a 141% increase in revenue year-over-year.

Rocket Fuel has, over the last year, been transitioning into the platform business, building its SaaS (software as a service) business. Wootton said the company’s adjusted EBITDA came in at the high-end of its guidance range, and it made progress toward being cash-flow-positive.

Here are other Q3 financial highlights:

--GAAP revenue came in at $109.7 million, 2% below last year's Q3 total of $111.8 million.
--Revenue derived from North America was $90.9 million, down 3% from last year's third quarter. Revenue from outside North America was $18.8 million, up 2% from last year.
--Cash and cash equivalents came in at $78.7 million as of September 30, 2016, up sequentially by $12.0 million from Q2  2016; the same was $78.6 million as of December 31, 2015.
--Revenue from top 50 customers was 59% of total revenue, compared to 49% year-over-year. Revenue from top 250 customers was 86% of total revenue, compared to 80% year-over-year.
--There were 858 employees as of Sept. 30, down from 962 in Q3 2015.

Wootton said that he expects the platform solutions business to grow to somewhere between 30% to 40% of revenue in 2017 -- up from 20% this year -- although it’s a lower-margin business  for the moment.

He said some customers are moving from a media services relationship to the platform business, and moving from variable to fixed margins, resulting in a slight decline in net revenue for Q3.

“This year has been about focusing on cost controls,” Wootton said. “We’ll be focusing on larger customers over the long run that will help drive more spending through longer-term relationships,” a new emphasis for the company.

He also said Rocket Fuel is committed to an SaaS model. “We’ve demonstrated the ability to contain costs and next year is about a return to growth.”

Wootton also said the company has focused on building advertising products and services for brands, and those products are primarily video. He said growth in the brand business is up 10% year-over-year.

Wootton also cited decent growth in the private marketplace segment and header bidding. “We’re focused on becoming more of an enterprise company,” Wootton said.

Rocket Fuel’s new CFO, Stephen Snyder, succeeds Rex S. Jackson, who resigned from the company Oct. 26 to pursue another opportunity. 

Snyder brings more than 20 years of financial leadership to Rocket Fuel, most recently as CFO of a technology platform company in the energy industry. He’s also held executive roles at Adobe Systems and Hewlett Packard.

Until Snyder begins Nov. 10, Henrik Gerdes, the company's vice president, corporate controller and treasurer, will serve as interim CFO.