IPO Report: Tremor Video

Francis Gaskins  |

Based in New York, NY, Tremor Video (TRMR) scheduled a $90 million IPO with a market capitalization of $582 million, at a price range mid-point of $12 for Thursday June 27, 2013.

10 POs are scheduled for the week of June 24th. The full IPO calendar is at IPOpremium.  Trial and paid & trial subscribers get early, complete financial analysis.

S-1 filed June 14, 2013
Manager, Joint Managers:  Credit Suisse; Jefferies
Co-Managers:  Canaccord Genuity; Oppenheimer


TRMR is a market leader in in-stream video advertising.  The stock market loves market leaders with top line revenue growth who are in a growth segment.  Buy TRMR on the IPO.


TRMR delivers in-stream video advertising on behalf of a diversified base of brand advertisers in the United States.

Revenue increase 47% to $25 million for Q1 ’13 vs Q1 ’12, and gross margin increased to 44% from 32%.

TRMR appears to have a current technology lead in the in-stream video ad market, based on performance-based pricing.  However, those kinds of leads are seldom fixed in stone.



Valuation Ratios

IPO Mrkt

Price /

Price /

Plant-Based Food:McDonald's To Offer New Plant-Based Burger in US Restaurants by Beyond Meat


Price /

Price /

% offered

annualizing Q1 ’13

Cap (mm)





in IPO

Tremor Video (TRMR)










TRMR is a leading provider of technology-driven video advertising solutions enabling brand advertisers to engage consumers across multiple internet-connected devices including computers, smartphones, tablets and connected TVs.

Clients include some of the largest brand advertisers in the world including all of the top 10 automakers and 9 of the top 10 consumer packaged goods companies.

Relationships with leading brand advertisers and their agencies have helped create a robust online video ecosystem that includes more than 500 premium websites and mobile applications, over 200 of which partner on an exclusive basis.

Proprietary technology

TRMR’s proprietary technology, VideoHub, analyzes in-stream video content, detects viewer and system attributes, and leverages our large repository of stored data to optimize video ad campaigns for brand-centric metrics. VideoHub also provides advertisers and agencies with advanced analytics and measurement tools enabling them to understand why, when and where viewers engage with their video ads.


TRMR derives substantially all of its revenue by delivering in-stream video advertising on behalf of a diversified base of brand advertisers in the United States through the Tremor Video Network.

TRMR alsos recently began licensing VideoHub technology to advertisers and agencies through an intuitive, customizable user interface, called VideoHub for Advertisers, or VHA.


TRMR was organized in 2005 and initially delivered both video display and banner ads, referred to as in-banner video ads, and in-stream video ads.

In late 2010, TRMR completed the acquisition of ScanScout, Inc., or ScanScout, through which TRMR  acquired its differentiating video analysis and optimization technology.

In 2011, TRMR enhanced and integrated this technology into solutions.  Consistent with the focus on being a strategic partner for brand advertisers, TRMR decided to focus the business solely on in-stream video advertising and to move away from in-banner video advertising.

In-stream video ads are better suited for brand advertisers because they can be served to viewers immediately prior to or during the publisher’s content commanding attention when viewers are most engaged as opposed to in-banner video ads, which are served on the periphery of publisher content where viewers may not direct their attention.

TRMR believes its market opportunity and growth prospects will be enhanced by the focus on in-stream video ads because such ads are better suited to address advertisers’ brand-centric goals.

In-stream focus

As a result of the focus on delivering in-stream advertising coupled with TRMR’s differentiated optimization technology, TRMR experienced significant growth from in-stream video advertising revenue.

From 2011 to 2012, in-stream video advertising revenue grew from $75.5 million to $99.7 million, or 32.1%.

For the three months ended March 31, 2012 and 2013, in-stream video advertising revenue grew from $15.7 million to $24.0 million, or 52.9%.

Consistent with the strategy, revenue from in-banner advertising revenue declined from $14.8 million to $3.8 million from 2011 to 2012. Revenue from in-banner video ads was $1.2 million and $0.1 million for the three months ended March 31, 2012 and 2013, respectively.

Performance-based pricing

TRMR offers a number of performance-based pricing models for in-stream video advertisements. These models include

As a percentage of total revenue, revenue attributable to performance-based pricing, such as CPE and CPVC, for 2011 and 2012 was 7.9% and 22.7%, respectively, and for the three months ended March 31, 2012 and 2013, was 14.2% and 36.1% respectively. 

Licensing VideoHub technology

In 2012, TRMR also began licensing VideoHub technology packaged with an intuitive and customizable user interface, to advertisers and their agencies through TRMR’s VHA solution.

The VHA solution affords advertisers transparency and analytical tools to measure the effectiveness of video ad campaigns across all of their video ad buys, whether or not those campaigns are run through the Tremor Video Network.

TRMR is also investing in the development of an enterprise solution for publishers to enable their direct sales force to better monetize their video ad inventory.

In 2012 and the three months ended March 31, 2013, TRMR generated $1.7 million and $0.6 million, respectively, of licensing revenue from advertiser and publisher solutions. TRMR expects licensing revenue to increase in future periods, and believes margins on licensing revenue will be higher than those for the Tremor Video Network.


TRMR’s revenue tends to be seasonal in nature, with the third and fourth quarters of each calendar year historically representing the largest percentage of total revenue for the year and the first quarter of each calendar year historically representing the lowest percentage of total revenue for the year.

Intellectual property 

TRMR currently owns one granted European patent, registered in France, Germany and Great Britain and expires in 2029. Additionally, TRMR currently owns eight pending U.S. patent applications currently in process with the U.S. Patent and Trademark Office.


The Tremor Video Network competes with large online video publishers such as Hulu, LLC and YouTube, LLC owned by Google Inc., as well as advertising networks and exchanges, such as BrightRoll, Inc. and YuMe, Inc.

TRMR also competes for advertiser spending with publishers, such as CBS, CNN and ESPN, who rely on their own sales organizations to attract brand advertisers across their properties.

TRMR’s VHA solution competes with ad tech infrastructure companies, such as Adap.tv, Inc. and Videology, Inc.

In the traditional media space, TRMR’s primary competitors for middle of the funnel advertising spend are mainly cable TV broadcasters, radio broadcasters and print media publishers.

Across the digital media landscape, TRMR competes for advertising spend with large entities such as Facebook, Inc., Microsoft Corporation and Yahoo! Inc. as well as Adobe Systems Incorporated and Google Inc. that offer video advertising services as part of a larger solution for digital media buying.

5% stockholders pre-ipo

Canaan VII L.P., 19.1%
W Capital Partners II, L.P., 11.5%
Masthead Venture Partners Capital, L.P., 10.4%
Entities affiliated with Meritech Capital,  9.5%
Entities affiliated with Draper Fisher Jurvetson, 9.0%
Entities affiliated with General Catalyst Partners, 8.1

60% owned by VCs pre-IPO.

Use of proceeds

TRMR expects to net $81 million from its IPO.

Proceeds are allocated to general corporate purposes.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Market Movers

Sponsored Financial Content