Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. MediaMind Technologies Inc. (1275791) 10-Q published on May 16, 2011 at 4:30 pm
Reporting Period: Mar 30, 2011
The aggregate intrinsic value in the table above represents the total intrinsic value of in-the-money options that would have been received by the option holders had all option holders exercised their options on March 31, 2011. This amount changed, based on the fair value of the Company’s Common stock. As of March 31, 2011, there were approximately $ 10,093 of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company’s equity incentive plan. That cost is expected to be recognized over a weighted-average period of 3.15 years. The total grant-date fair value of vested options for the three months ended March 31, 2011, was approximately $ 18,840 (unaudited).
The total intrinsic value of options exercised during the three months ended March 31, 2011 was $ 3,011 (unaudited).
Revenues in the three months ended March 31, 2011 increased by $2.9 million, or 18%, to $18.9 million, compared to $16.0 million in the three months ended March 31, 2010.The increase was attributable to increased revenue from our data driven products as well as the addition of new customers and increased ad volumes on both premium video and standard display impressions. In the three months ended March 31, 2011, we increased the number of advertisers we serviced by 36% compared to 2010. Our volume of standard display and basic rich media impressions grew by 68% compared to the same quarter last year. Our premium video-based rich media impressions grew by 41%. Tracking pixel impressions, which incorporate data from environments like social media and publisher-served ads, grew 106% in the first quarter of 2011 compared to 2010. Data driven products grew 124% in the three months ended March 31, 2011, compared to the previous year, further demonstrating our momentum in this category.
Cost of revenues increased by $0.7 million, or 78%, to $1.6 million in the three months ended March 31, 2011 from $0.9 million in the three months ended March 31, 2010. While fees due to service providers decreased on a per impression basis, overall cost of revenues increased due to the significant increase in the volume of impressions we delivered. The increase in Cost of revenue is also a result of the cost of media related to our new Smart Trading product line and to an increase in the expenses associated with the operation of our data centers, including depreciation, following a material investment in our data centers in the three months ended March 31, 2011. Gross margin decreased as expected to 92% in the three months ended March 31, 2011 compared to 94% in the three months ended March 31, 2010. The decrease in gross margin relates primarily to the depreciation expenses related to our growth acceleration in investments as well as the growth of our new Smart Trading product line, which carries a different gross margin profile.
Investing activities. Net cash used in investing activities in the three months ended March 31, 2011 was $11.4 million which consisted of the purchase of short term deposits amounting to $43 million, partially offset by the expiration of short term deposits amounting to $35 million, capital expenditures of $2.2 million and an acquisition of business activity in Italy for a total consideration of $650 thousands. Our capital expenditures in the three months ended March 31, 2011, consisting primarily of investment in infrastructure to support our services, research and development software tools, information technology infrastructure, leasehold improvements and furniture, totaled $2.2 million, as compared to $1.2 million for the first three months of 2010. Net cash used in investing activities in the three months ended March 31, 2010 were $1.3 million which consisted primarily of capital expenditures.
We conduct business in a large number of countries in the Americas, Europe, Asia, Australia, Latin America and the Middle East. Most of our revenues are generated in U.S. dollars, the euro, the Australian dollar and the British pound sterling. Based on our results for the year ended December 31, 2010, a 1% increase (decrease) in the value of the euro, the Australian dollar and the British pound sterling against the U.S. dollar would have increased (decreased) our revenues by $226 thousand, $57 thousand and $75 thousand, respectively. Based on our results for the three months ended March 31, 2011, a 1% increase (decrease) in the value of the euro, the Australian dollar and the British pound sterling against the U.S. dollar would have increased (decreased) our revenues by $44 thousand, $12 thousand and $20 thousand, respectively. Most of our expenses are denominated in U.S. dollars, the new Israeli shekel, the British pound sterling and the euro. Based on our results for the year ended December 31, 2010, a 1% increase (decrease) in the value of the new Israeli shekel, the Australian dollar, the British pound sterling and the euro against the dollar would have increased (decreased) our expenses by $50 thousand, $24 thousand, $58 thousand and $90 thousand, respectively. Based on our results for the three months ended March 31, 2011, a 1% increase (decrease) in the value of the new Israeli shekel, the Australian dollar, the British pound sterling and the euro against the dollar would have increased (decreased) our expenses by $13 thousand, $10 thousand, $13 thousand and $21 thousand, respectively. In the future, the percentage of our revenues earned in other currencies may increase as we further expand our sales internationally. Accordingly, we are subject to the risk of exchange rate fluctuations between such other currencies and the dollar. Our expenses in currencies other than the new Israeli shekel tend to be hedged by revenues being denominated in the same currency, which helps reduce the impact of currency fluctuations on our profit margins. We hedge our expenses denominated in new Israeli shekels. The sensitivity analysis provided above does not give effect to this cash flow hedging program.