Rentrak Q4 Loss Widens, Top Line Improves - Analyst Blog

Rentrak Corporation RENT posted operating loss of 21 cents per share in the fourth quarter of fiscal 2014, ending Mar 31, much wider than the Zacks Consensus Estimate of a loss of 5 cents. However, the reported loss was a couple of cents narrower than 23 cents loss per share incurred in the year-ago quarter attributable to an improvement in top line.
 
Including non-recurring items, Rentrak reported loss per share of 17 cents in the quarter, in line with year-ago results.

Behind the Headlines

Revenues for the quarter improved nearly 40% year over year to $21.6 million, on the back of a 94% surge in the TV Everywhere business.  The company surpassed revenue growth expectations in most of its lines of business. However, the top line marginally missed the Zacks Consensus Estimate of $22 million.

Though cost of revenue increased 20%, a higher magnitude of revenue increase drove gross margin by 300 basis points.

Operating expenses in the reported quarter flared up 42% year over year to $17.1 million due to higher contingent consideration for the iTVX acquisition last year, increase in headcount and higher operating costs to support revenue growth.

Adjusted EBITDA of $1.9 million jumped from $0.13 million in the year-ago quarter.

Full-year Highlights

For fiscal 2014, Rentrak incurred a loss of 59 cents per share, much narrower than the loss of $2.10 per share incurred in fiscal 2013.

Revenues improved 33% year over year to $75.6 million in fiscal 2014.

Financial Update

Rentrak exited fiscal 2014 with cash and cash equivalents of $5.1 million, up 33% over fiscal 2013 end.

Total asset increased 13% year over year to $81.3 million at Mar 31.

Stockholders' equity was $52.2 million on Mar 31, up 8.7% year over year.

Cash inflow from operations in fiscal 2014 was $6.3 million, comparing favorably with cash outflow of $1.6 million in the prior fiscal.

Looking Forward

Rentrak envisions 80% annual growth in its TV Everywhere business revenues, 12% annual growth in Movies Everywhere business revenues and 20% annual growth in its OnDemand Everywhere revenues over the long term that combined will continue to fuel overall revenue growth. However, the company estimates a 5% annual decline in its Other services revenues.

Zacks Rank and Other Players

Rentrak presently carries a Zacks Rank #5 (Strong Sell). Among the better-ranked business service providers, Avis Budget Group, Inc. CAR, Viad Corp. VVI and RPX Corporation RPXC beat their respective Zacks Consensus Estimate in their last reported quarter. All these stocks carry a Zacks Rank #2 (Buy).