AOL Conference Call Highlights

AOL

reported its third quarter earnings on Friday. Shares of the company are fairly neutral. Below are some key highlights from its conference call: Financial Metrics: • Today, AOL is leaner, stronger, and more focused and that allows us to operate more effectively and to execute more meaningful partnerships. • We see clear opportunity gap in the market, a market that will be transformed in the next two years to three years, and we are building AOL to go directly after the billions of connected consumers and the $500 billion-plus spend annually on media. • In 2010, our strategy of connecting great content and video platforms with big advertising platforms, the Barbell strategy wasn't highly recognized. • But today, the market has come to our strategy and we have the ability to partner with the best companies in the world. • AOL is serving almost 220 million consumers with almost 50% of our traffic being mobile. • At AOL core, which includes products like the homepage, membership and mail, homepage's average monthly mobile UVs grew 35% year-over-year and 12% quarter-over-quarter. • AOL.com grew revenue by double digits. • AOL had double-digit pricing and revenue growth in Q3. • Membership churn of just 1.4% was our second lowest rate in years. • On the onsumer brand side, we also had a lot of strength. • HuffPost surpassed 100 million multi-platform UVs and has become a global media brand. • Native ads on HuffPost are growing at over 100% and now are a significant driver of domestic revenue for the property. • In August, HuffPost Live, our owned and operated channel with an average of • 12-hours of live original programming per day celebrated its second anniversary and surpassed 1.7 billion video views. • There has been over 24,000 guests to-date from over 100 countries on HuffPost Live. • TechCrunch grew 18% quarter-over-quarter and just concluded a standing room only TechCrunch Disrupt in London, which was very exciting for me to see personally and a great signal of how large TechCrunch and our tech brands can be. • Engadget, our other major tech brand, grew its cross-platform users by over 30% and it's hosting its own conference in New York City this week, called Engadget Expand and we've had 15,000 tech fans registered to come. • MAKERS UVs have grown 76% since launch and we have successfully launched six new documentaries on PBS in Q3. • MapQuest remains the number two mapping provider with 35% market share in the U.S., and $26 million UVs. • In platforms, ad pricing was up across AOL and AOL Platforms by double-digits in Q3. • Programmatic revenue continued to grow at more than 100% year-over-year. • AOL Platforms premium format revenue grew more than 100% year-over-year. • We saw a significant shift from our network-based business to programmatic platforms business in Q3, 37% of our non-search revenue is now programmatic versus 12% last Q3, and 42% of Ad.com revenue is now programmatic up from 18% last year. • We launched cross-device recognition ad solutions with the highest accuracy rate in the industry at 93% match rate according to comScore. • Our new linear TV business is small, but growing rapidly and it represents a huge opportunity for AOL and our partners. • In Q3, we added 10 new clients to our linear TV product. • We continued to expand our global agency relationships. • We are the fourth largest mobile publisher domestically with over 100 million mobile users and we are the fastest growing. • Network and programmatic mobile revenue grew at over 125% year-over-year and 50%-plus of our clients are now running across multiple screens, including mobile targeting. • Significantly during Q3, we also brought all of AOL Platforms' offerings to cross-screen ability. • And we launched the Road Devil Interstitial to bring further innovation into mobile monetization experiences and clearly video is a big opportunity for us to improve mobile monetization even further in the future. • Third quarter results represented another solid quarter for AOL. • Our seventh consecutive quarter of year-over-year revenue and adjusted OIBDA growth and our second consecutive quarter of double-digit top line growth. • Additionally, solid adjusted OIBDA trends were underscored by strong free cash flow generation. • On a consolidated basis, growth continues to be driven by video, higher pricing across our owned and operated brands, and strong trends in our Platforms business. • Here in Q3, 37% of non-search advertising revenue is programmatic versus 12% last year. • Meanwhile, over 50% of campaigns on our systems were cross screen, which is triple-digit growth - and driving triple-digit growth in mobile revenue. • AOL's growth is coming from areas where we have invested in significantly during recent years, and Q3 serves as a solid data point, that those investments are driving current and future growth for AOL and returns for our shareholders. • Brand Group's search revenues grew 8%, driven by search marketing related efforts. • Adjusted OIBDA for the Brand Group increased 56% year-over-year, driven by our continued efforts to run a more focused brand portfolio. • In recent years, we've significantly improved results in the Brand segment by focusing on fewer brands with larger growth profiles, while shuttering brands, which do not offer the same potential. • This has at times impacted reported revenues, but at the same time, it has improved our focus and profitability and yielded healthier underlining revenue trends. • Revenue net of tax margins declined to 33% this quarter