Rubicon Project today reported revenues of $36.1 million for the first quarter of 2020 and projected a bleak outlook for the next quarter in its first earnings report since completing its acquisition of Telaria on April 1.
Rubicon missed on its first-quarter projections by around $1 million. Telaria’s revenue was $15.1 million, down roughly 20% from the previous quarter. Rubicon expects Q2 revenue to be between $36 million and $39 million, effectively wiping out Telaria’s Q1 revenue.
The acquisition was expected to create cost synergies, or savings, between $15 million and $20 million when the companies announced the deal in December. However, Rubicon said cost reductions will likely exceed $20 million due to the financial impact of the coronavirus pandemic.
The company also reported that ad spend fluctuated considerably once the pandemic hit with spend down 30% on average in April.
“In April, we saw some degradation over the first half of the month and then a stabilization in the latter half,” said Rubicon Project CFO David Day. “So, that guidance is based on that.”
Rubicon also confirmed that it laid off approximately 8% of the combined staff, as Adweek previously reported. The company said more cost-cutting measures are coming, including a 30% pay cut for CEO Michael Barrett.
“Given the timing in implementing these synergies and the impact of one-time severance and other costs, the majority of the reductions will not be realized until late 2020 but should be fully realized in early 2021,” the company said in its earnings filing. “In addition, given the significant impact resulting from the novel coronavirus pandemic, we are taking additional short-term actions, including compensation reductions, a hiring freeze, deferment of certain capital expenditures; and as expected, will have lower costs from marketing events and travel. We expect that the timing of the temporary reductions will benefit us immediately and remain in place until such time we see a sustainable recovery in revenue.”
Rubicon and Telaria’s deal made the company the largest independent supply-side platform. Rubicon shareholders hold 52.9% of the combined company.
Telaria’s connected TV revenue totaled $9.1 million, up 74% year over year. Rubicon sought Telaria for its tech in CTV, which will be a focal point in the combined company’s strategy.
Barrett said the company is focused on continuing its investment in CTV, accelerating supply-path optimization and growing demand manager, a tool to help publishers implement header bidding through prebid.
Barrett said the company has 156 customers using demand manager, up from 86 last quarter.
The current financial crisis has kickstarted SPO as both buyers and sellers worry that their partners might default. Barrett said Rubicon’s partners on both the buy- and sell-side are looking for quality.
“It’s a flight to quality at a time like this, and obviously, the biggest guy we have to compete against is a Google,” Barrett said. “I think that if you look at independent players, no one looks quite like us from a balance sheet standpoint, stability, access to capital and somebody who’s been there for publishers for as long as we have. So, I feel really good about where we sit in this whole piece of the SPO puzzle, but a puzzle nonetheless.”
Separately, Rubicon and Telaria were two of the more widely used SSPs. According to a recent poll from Advertising Perceptions, 26% of publishers use Rubicon, tying it with Verizon Media’s offering as the fourth-most-used SSP. Telaria ranks tied for 11th at 13%.