Meanwhile, Dan Salmon of BMO Capital Markets approached the same question another way by asking about Rocket Fuel's plans to ramp up the Software-as-a-Service (SaaS) revenue stream. Management hinted such an option might be on the table for 2015. "There are things we need to do in terms of UI," said CFO Peter Bardwick. But the company likes the idea of "leveraging the core platform, which is what we've done in mobile (and) TV/brand."
One of Rocket Fuel's big differentiators is its comprehensive buying from a multitude of supply sources, according to John. It transacts through Adap.tv, Facebook, Google, MoPub, Millennial Media, OpenX, PubMatic, Yahoo, SpotXchange, Tremor Video and others. "We can negotiate favorable terms with these exchanges due to our scale," John said.
Rocket Fuel's Q1 gross revenue was $74.4 million, a 95% increase from the year ago period, the company said Thursday. That represents a slowing of top-line revenue growth, as Q4's revenue increase was 113%. Meanwhile "revenue less media costs," the more telling metric for any ad network company, increased 107% to $44.7 million. Media margins were 60%.
The powerful revenue growth appeared not to impress Wall Street, as shares of FUEL fell 25% in after-hours trading to an all-time low of $20.59, well below its $29 IPO strike price. Investors have lately soured on digital advertising stocks; Rubicon Project and Criteo have shared a fate similar to Rocket Fuel (and, indeed, many tech stocks) in recent weeks. More on that.