21 Apr 2015 16:22
21 April 2015
Phorm Corporation Limited
("Phorm" or the "Company")
Operational Update
Phorm (AIM: PHRM), a leading internet personalisation technology company, is pleased to announce an unaudited operational update.
Highlights:
· Commercial operations commenced in the US
· Strong growth in sales and sales pipeline in Russia
· Potential partnership discussions progressing in China
· Significant performance improvements following the release of new algorithms
· Second phase of major cost reduction programme initiated
On 16 January 2015, Phorm announced that it was continuing to make very good progress in respect of the group's key performance indicators. The Company is pleased to announce continued progress with the recent commencement of commercial operations in the United States of America ("US").
The US is the world's largest online advertising market; according to PricewaterhouseCoopers, in 2015, it will be worth approximately US$52bn. Accordingly, the Company believes the commercial prospects for its market leading technology in the US are most promising and has been encouraged by the rapid growth in unique users achieved within the first month of commercial operations. In addition, in terms of inventory, the Company now has access to over 9bn advertising requests per day in the US.
Phorm has also experienced strong revenue growth in Russia, despite the challenging macro economic conditions prevalent in this market. The unaudited gross revenue derived from Russia in March 2015 was in excess of RUB8m and the Company expects this growth to accelerate significantly based on its current sales pipeline.
Russian Operations Gross Revenue
Date | Gross Revenue (RUB) |
Aug 2014 | 202,418 |
Sep 2014 | 1,301,292 |
Oct 2014 | 2,105,801 |
Nov 2014 | 2,045,712 |
Dec 2014 | 5,633,268 |
Jan 2015 | 3,231,175 |
Feb 2015 | 4,493,894 |
Mar 2015 | 8,016,510 |
In China, the Company has encountered a number of operational challenges and has therefore concluded that the most effective and expedient means to achieve its objectives in this particular market is through the establishment of a potential partnership with a large local player. Several conversations are currently ongoing and the Company will update the market in due course as such discussions progress.
On 16 January 2015, the Company also announced that it had launched its machine learning algorithm. Through its relationships with Internet Service Providers ("ISPs"), Phorm has access to substantial amounts of data, which it is able to analyse anonymously and in real time. The machine learning algorithms have already provided a significant increase in both the efficiency and performance of Phorm's technology. The efficiency improvements arise from the way in which the algorithm informs the prices of the bids on real time bidding platforms, where there have been increases of approximately 300 per cent. The performance improvements stem from the manner in which the algorithm can anonymously spot user buying patterns. The performance improvements achieved have been as high as 350 per cent.
By improving both performance and efficiency, whilst reducing the amount of manual input required, the machine learning algorithm has also opened up the possibility of concluding potential licensing agreements with third parties in order to further accelerate the commercialisation of the platform. A number of these discussions are ongoing and the Company currently anticipates being able to announce its first licencing deal in the coming months.
The first phase of the Company's previously announced cost reduction exercise has also been successfully completed and the Company is now implementing a second phase which, in part due to the operational efficiencies created by the abovementioned machine learning algorithm, should achieve further annualised cost savings of approximately US$400-600k.
The combination of our commercial launch in the US, together with strong revenue growth in Russia, ongoing partnership discussions in China, enhanced performance and a reducing cost base means that the Company continues to be optimistic about its commercial outlook for the remainder of 2015 and beyond.
-Ends-
For further information please contact:
Phorm Corporation Limited
Andy Croxson (analysts and investors) +44 20 3397 6001
UK Investors
Mirabaud Securities LLP (Broker) +44 20 7321 2508
Jason Woollard
Peter Krens
Strand Hanson Limited (Nominated Adviser) +44 20 7409 3494
James Harris
Matthew Chandler
James Dance
US Investors
Lippert/Heilshorn and Associates (Investor Relations) +1 212 838 3777
John Heilshorn
About Phorm
Phorm is a global personalisation technology company that makes content and advertising more relevant to the consumer. Phorm's innovative platform preserves user privacy and delivers a more interesting online experience.
Phorm's industry leading technology enables its Internet Service Provider ("ISP") partners to offer a new type of online advertising platform and a free consumer internet content feature, ensuring more relevant advertisements and personalised content for opted-in users.
Phorm's advertising platform revolutionises current standards of online privacy, fully protecting the identity of consumers. Phorm's solution is completely opt-in. Only those users consenting to the service are profiled and only ever on an anonymous basis.
Phorm's partners include leading ISPs, Publishers, Advertising Networks and Advertisers.
Phorm, under a predecessor holding company, was admitted to trading on the AIM market of the London Stock Exchange in 2004.
For more information, please visit: www.phorm.com