Millennial Media lost $3.8 million despite a surge to $96.7 million in revenue in the fourth quarter of 2013, with both results beating analysts' expectations, but shares fell in after-hours trading on shaky expectations going forward.
The Baltimore mobile advertising company's revenue jumped by two-thirds compared with the fourth quarter of 2012, when it reported $58 million in sales and posted a profit of $2.6 million. It completed a mostly stock deal worth about $174 million to acquire Boston-based Jumptap in November that helped drive growth.
Newly named CEO Michael Barrett said he expects revenue to fluctuate over the coming year but to grow at about a 20 percent clip. The company predicted sales of $72 million to $76 million in the first quarter of 2014, below the $83 million predicted by analysts polled by Thomson Reuters.
Shares fell by as much as 14 percent in after-hours trading, losing as much as $1 off of their closing price of $7.20.
In his first quarterly earnings announcement since joining the company last month, Barrett said he takes over the company at a pivotal time. Paul Palmieri, Millennial's founder, left in a sudden move for venture capital firm New Enterprise Associates.
"We are at an important and unique time in the evolution of the mobile advertising industry, and the same goes for our company," Barrett said. "As the industry sees more and more brand [advertising] dollars moving to mobile, Millennial is continuing to grow."
Millennial's revenue jumped to $259.2 million and its losses widened to $15 million for the year, up from $177.7 million in 2012, a year in which the company lost $6.8 million.
Separately, the company announced the addition of two members to its board of directors: Ross Levinsohn, CEO of Guggenheim Digital Media and a former interim CEO of Yahoo, and Tom Evans, former CEO of Bankrate and publisher of U.S. News and World Report, the Atlantic Monthly and Fast Company.