KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

Posted by Joe Zaller
Mar 17 2011

IPTV Asset management provider Kit digital reported that its revenue for the fourth quarter of 2010 was $38.4m, more than double the same period a year ago, and an increase of 39% versus the previous quarter.   

The company posted a net loss of $8.5m on a GAAP basis during the quarter, compared to a net loss of $8m in the previous quarter, and a net loss of $15.6m during the same period a year ago

On a geographic basis, the EMEA region contributed approximately 45% of revenue during the quarter, with Asia-Pacific and the Americas contributing 35% and 20% respectively.

For the full year 2010, the company posted a GAAP net loss of $35.3m on revenue was $106.6m.  Revenue increased 125% versus 2009.  EBITDA (a non-GAAP measure) for the year was $18.3m. On a geographic basis, the EMEA region contributed approximately 54% of revenue in 2010, with Asia-Pacific and the Americas contributing 25% and 21% respectively.

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Revenue Guidance
In guidance issued in November 2010, the company said it expects to achieve revenue in excess of $137.5 million for fiscal 2011, with an EBITDA margin of approximately 24%. This guidance was issued prior to any its recent M&A activity.

Company chairman and CEO Kaleil Isaza Tuzman said that the revenue guidance from November 2010 will be revised up based on the M&A activity, including the recent acquisitions of KickApps, Kewego and Kyte, which were announced at the end of January 2011.  “If you overlay our organic, pre-acquisition revenue target of $137.5 million with the estimated annualized run-rate of recently acquired companies — totaling around $44 million — and adjust for the approximate date of closing and any seasonality for each — it provides for an expectation of revenues in 2011 in excess of $170 million, or up more than 60% percent over 2010.”

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M&A Plans Still on Track
Much of Kit digital’s growth has been based on the numerous acquisitions the company  has made, including the recent deals for KickApps, Kewego, Kyte, and the recently announced Polymedia.  The company says it “purposefully sequenced” these deals to happen prior to a “material acquisition” that the company has been hinting at for several quarters.

Last year, Kit digital raised $110m through a stock offering, and said much of the proceeds would be used to fund M&A activities.  During the company’s earnings call with analysts, Tuzman said that the majority of these funds “continue to be dedicated to support a prospective larger acquisition in the very near future.”

Tuzman says that KIT digital plans to announce this larger transaction by the end of Q1 or in early April.

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Related Content:

Kit digital Q4 and FY 2010 earnings press release

Kit digital Q3 earnings information

Kit digital buys KickApps, Kewego, and Kyte

Kit digital sells $100m of stock, says proceeds will be used to fund broadcast industry M&A activities.

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