S-1 1 a2222730zs-1.htm S-1

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As filed with the Securities and Exchange Commission on February 3, 2015.

Registration No. 333-              


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933



MAXPOINT INTERACTIVE, INC.
(Exact Name of Registrant as Specified in its Charter)



Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
  7370
(Primary Standard Industrial
Classification Code Number)
  20-5530657
(I.R.S. Employer
Identification Number)

MaxPoint Interactive, Inc.
3020 Carrington Mill Blvd., Suite 300
Morrisville, North Carolina 27560
(800) 916-9960

(Address, including zip code and telephone number, including area code, of registrant's principal executive offices)



Joseph Epperson
Chief Executive Officer
MaxPoint Interactive, Inc.
3020 Carrington Mill Blvd., Suite 300
Morrisville, North Carolina 27560
(800) 916-9960

(Name, address, including zip code and telephone number, including area code, of agent for service)



Copies to:

Robert V. Gunderson, Jr., Esq.
Glen R. Van Ligten, Esq.
Richard C. Blake, Esq.
Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP
1200 Seaport Blvd.
Redwood City, California 94063
(650) 321-2400

 

Brad R. Schomber
Chief Financial Officer
MaxPoint Interactive, Inc.
3020 Carrington Mill Blvd., Suite 300
Morrisville, North Carolina 27560
(800) 916-9960

 

Mark G. Borden, Esq.
Erika L. Robinson, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
7 World Trade Center, 250 Greenwich Street
New York, New York 10007
(212) 230-8800



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

           If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a smaller reporting company)
  Smaller reporting company o

CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
to be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee

 

Common Stock, $0.00005 par value

  $75,000,000   $8,715

 

(1)
Estimated pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2)
Includes the aggregate offering price of additional shares that the underwriters have the option to purchase to cover over-allotments, if any.



           The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated                           , 2015.

                       Shares

LOGO

Common Stock



        This is an initial public offering of shares of common stock of MaxPoint Interactive, Inc. All of the             shares of common stock are being sold by us.

        Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $              and $             . We are applying to list our common stock on the New York Stock Exchange under the symbol "MXPT."

        We are an "emerging growth company" as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements.

        See "Risk Factors" on page 13 to read about factors you should consider before buying shares of the common stock.



        Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.



 
  Per Share   Total  

Initial public offering price

  $                 $                

Underwriting discount(1)

  $                 $                

Proceeds, before expenses, to MaxPoint

  $                 $                

(1)
See "Underwriting" for a description of the compensation payable to the underwriters.

        To the extent that the underwriters sell more than             shares of common stock, the underwriters have the option to purchase up to an additional             shares from MaxPoint at the initial price to public less the underwriting discount.



        The underwriters expect to deliver the shares against payment in New York, New York on             , 2015.

Goldman, Sachs & Co.   Deutsche Bank Securities   Pacific Crest Securities

Needham & Company   William Blair



Prospectus dated             , 2015.


TABLE OF CONTENTS

 
  Page

Prospectus Summary

  1

Risk Factors

  13

Special Note Regarding Forward-Looking Statements

  40

Industry and Market Data

  41

Use of Proceeds

  42

Dividend Policy

  42

Capitalization

  43

Dilution

  46

Selected Consolidated Financial Data

  48

Management's Discussion and Analysis of Financial Condition and Results of Operations

  51

Business

  76

Management

  91

Executive Compensation

  98

Certain Relationships and Related Party Transactions

  107

Principal Stockholders

  109

Description of Capital Stock

  111

Shares Eligible for Future Sale

  116

Material U.S. Federal Income Tax Considerations for Non-U.S. Holders of Common Stock

  118

Underwriting

  121

Legal Matters

  125

Experts

  125

Where You Can Find More Information

  125

Index to Consolidated Financial Statements

  F-1



        Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

        Through and including                       , 2015 (25 days after the commencement of this offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

        For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside of the United States.


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PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. You should read the following summary together with the more detailed information appearing in this prospectus, including our consolidated financial statements and related notes, and in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," before deciding whether to purchase shares of our common stock. Unless the context otherwise requires, we use the terms "MaxPoint," the "company," "we," "us" and "our" in this prospectus to refer to MaxPoint Interactive, Inc. and its subsidiary.

Overview

        MaxPoint provides a leading business intelligence and marketing automation software service, which we refer to as our solution, that enables national brands to drive local, in-store sales. National brands use our MaxPoint Intelligence Platform to predict the most likely local buyers of a specific product at a particular retail location and then execute cross-channel digital marketing campaigns to reach these buyers. Business intelligence is at the core of our solution, which leverages high-velocity data processing and proprietary statistical models to continuously analyze more than 10 billion daily data attributes to delineate consumers' real-time purchase intent. By identifying and reaching only the most likely local buyers with digital customized product offers for local stores, national brands can more efficiently and effectively run local marketing campaigns, thereby increasing in-store sales and reducing wasted marketing spend associated with traditional approaches. We provide a technology-driven alternative to traditional local marketing methods for national brands across a number of industries where transactions take place predominantly offline, such as consumer products, retail, automotive, healthcare, telecommunications and entertainment.

        The primary marketing methods traditionally utilized to engage local consumers are print media, direct mail and radio. We believe these methods have become outdated as media consumption moves online and national brands increasingly seek digital solutions to make effective local marketing decisions to drive in-store sales. Approximately 88% of total U.S. retail purchases in 2014 occurred at physical locations, according to Euromonitor. The challenges associated with the promotion of local, in-store purchasing include predicting a consumer's purchase intent and matching that consumer with the appropriate local store that currently has the desired product in stock. We believe these challenges are more pronounced for national brands because they generally operate on a centralized or regional basis, which limits their visibility into the purchase intent of local consumers.

        The MaxPoint Intelligence Platform is a software service that enables national brands to predict local demand based on consumers' purchase power and intent and manage customized digital advertisements containing in-store offers and promotions to reach consumers at a local level across display, mobile, social and video channels. The MaxPoint Intelligence Platform matches the most likely communities of local buyers with a specific product at a particular retail location within a given timeframe. Through marketing automation and direct integration with real-time bidding, or RTB, exchanges, our platform delivers customized digital advertisements containing product and store-specific promotions to local consumers. National brands can then measure the offline sales impact of those digital marketing campaigns to optimize future campaigns and budgets and manage in-store supply levels. We introduced the MaxPoint Intelligence Platform in 2011 as a service primarily run by us on behalf of our customers. Since 2013, our customers have also had the ability to directly interface with the MaxPoint Intelligence Platform software service.

        The foundation for our local targeting is our proprietary Digital Zip architecture, a digital grid of households organized into over 44,000 specific neighborhoods, or Digital Zips, which can be as small as a couple of city blocks. Through a combination of our proprietary and third-party data, we

 

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create a profile for each Digital Zip based on shared demographic and financial traits, such as family size, income level, education, age and historical purchasing behavior.

        We use our consumer purchase intent model to determine which products consumers in a particular Digital Zip are most likely to purchase. Our consumer purchase intent model uses proprietary algorithms that take into account demographic and financial characteristics of potential consumers, historical purchase patterns of potential consumers and recent consumption of online media content by consumers, each aggregated at the Digital Zip level, which relate to targeted product characteristics or brand attributes. We analyze the aggregated consumption of online media content in each Digital Zip through the use of our proprietary search-based technology. This technology crawls, indexes and analyzes webpages around-the clock to interpret the meaning of text on webpages and catalogue each webpage by key topics. We then match the Digital Zips with the highest number of views of webpages that pertain to a key topic associated with a targeted product or product category. Based on these results, we can then match a targeted product offer to specific Digital Zips that exhibit an online behavior that correlates most strongly with the likely purchase of such products at the local level. We define "local," in terms of both retail locations and buyers or consumers, as the close proximity of a targeted consumer to a targeted retail location, typically within a specific Digital Zip.

        Our diverse customer base consists primarily of enterprises with national brands in the consumer products, retail, automotive, healthcare, telecommunications and entertainment industries. We sell our solution either directly to our customers or through advertising agencies that act on behalf of our customers. We have worked with each of the top 20 leading national advertisers and each of the top 10 advertising agencies in the United States as ranked in 2014 by Advertising Age. As of September 30, 2014, we had 431 enterprise customers. We define an enterprise customer to be any customer from which we have generated more than $10,000 of revenue during any trailing twelve-month period. Our customers typically pay us on a cost per thousand impression, or CPM, model based on the number of impressions we deliver through our platform for each marketing campaign.

        We generated revenue of $14.7 million, $35.1 million and $66.1 million for the years ended December 31, 2011, 2012 and 2013, respectively, representing year-over-year increases of 139% and 88%, respectively. We generated revenue of $41.8 million and $67.9 million for the nine months ended September 30, 2013 and 2014, respectively, representing a period-over-period increase of 62%. Revenue less traffic acquisition costs, which we refer to as Revenue ex-TAC, was $6.9 million, $18.6 million and $38.4 million for the years ended December 31, 2011, 2012 and 2013, respectively, representing year-over-year increases of 169% and 106%, respectively. Our Revenue ex-TAC was $24.7 million and $40.3 million for the nine months ended September 30, 2013 and 2014, respectively, representing a period-over-period increase of 63%. We recorded a net loss of $5.5 million, $6.8 million and $0.2 million for the years ended December 31, 2011, 2012 and 2013, respectively. We recorded a net loss of $1.4 million and $11.5 million for the nine months ended September 30, 2013 and 2014, respectively. Our Adjusted EBITDA was $(4.6) million, $(5.1) million and $2.6 million for the years ended December 31, 2011, 2012 and 2013, respectively. Our Adjusted EBITDA was $0.6 million and $(6.9) million for the nine months ended September 30, 2013 and 2014, respectively. Revenue ex-TAC and Adjusted EBITDA are financial measures not calculated in accordance with U.S. generally accepted accounting principles, or GAAP. Please refer to "—Summary Consolidated Financial Data" for information on Revenue ex-TAC and Adjusted EBITDA and for a reconciliation of Revenue ex-TAC to revenue and Adjusted EBITDA to net income (loss), respectively, the most directly comparable GAAP financial measures.

Industry Background

        Despite the growth of e-commerce over the past decade, the vast majority of consumer purchases currently is and, in the foreseeable future, is expected to be made locally in physical

 

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retail stores. Approximately 88% of total U.S. retail purchases in 2014 occurred at physical store locations, representing over $2 trillion of spending, and approximately 12% of total U.S. retail purchases occurred at non-physical store locations (including e-commerce), representing over $300 billion of spending, according to Euromonitor. We believe the vast majority of these retail purchases at physical store locations are made at retail stores in close proximity to the consumer's home. By 2019, retail purchases at physical retail store locations will continue to represent approximately 85%, or nearly $3 trillion, and retail purchases at non-physical store locations (including e-commerce) will represent approximately 15%, or approximately $500 billion, of total U.S. retail spending according to Euromonitor.

        National brands employ a variety of offline and online local marketing channels in an effort to target and reach consumers to promote sales of their products at physical retail locations. According to BIA/Kelsey, the U.S. marketing industry spent approximately $137 billion in 2014 and is projected to spend approximately $159 billion in 2019 on local media marketing, which includes both traditional and digital forms of marketing.

    Traditional Local Marketing.    Local marketing is still predominantly conducted through traditional marketing channels, which include television, newspaper, magazine and radio advertising, as well as mailers, free-standing inserts and coupons. According to BIA/Kelsey, spending for traditional local marketing was approximately $106 billion in 2014 and is projected to be approximately $104 billion in 2019, which would represent a decline from approximately 77% to approximately 65% of total local marketing spend during that period.

    Online/Digital Local Marketing.    As consumers continue to shift their media consumption online, national brands continue to increase their digital marketing efforts. According to BIA/Kelsey, digital local marketing spending was approximately $31 billion in 2014 and is projected to be approximately $55 billion in 2019, which would represent an increase from approximately 23% to approximately 35% of total local marketing spend during that period.

        National brands seeking to drive in-store sales face the following challenges with current local marketing channels:

    Limited ability to predict and target the most likely buyers.    Traditional marketing methods typically lack sophisticated technology while online methods generally rely on cookies that are not optimized for local consumer targeting and are frequently deleted.

    Limited ability to efficiently reach the most likely buyers at scale and at the right time.    Many traditional methods for local marketing have shrinking audiences and lack the ability to connect consumers to a particular product. Also, as lead times of up to eight weeks are generally required to plan and execute marketing campaigns, national brands often miss opportunities to reach consumers at the point in time when they desire to purchase a product.

    Inability to capture and analyze massive amounts of unstructured and disparate data in real time.    Most local marketing methods are unable to programmatically capture, process and analyze in real time the massive amounts of disparate data that reflect the current purchase intent of consumers and store-level supply of products.

    Inability to measure and optimize local marketing based on in-store sales.    Both offline and online media typically lack measurement and attribution tools that, at the individual store level, demonstrate return on investment for national brands and help them determine where to allocate marketing budgets.

    Inability to automate offline methods of marketing.    Traditional local marketing campaigns typically have long lead times, require a significant amount of effort to manage across multiple markets and involve numerous small media purchases across multiple channels and geographies.

 

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The Benefits of Our Solution

        Our solution presents significant benefits to our customers, including the ability to:

    predict and target the most likely local buyers for specific products based on consumers' purchase intent in real time;

    reach the most likely consumers of a product efficiently, at scale, and at the right time by programmatically delivering targeted and timely advertisements to the most likely buyers;

    capture and analyze massive amounts of unstructured and disparate data in real time using our integrated proprietary software and customized hardware platform to make 450,000 decisions per second and run more than a thousand simultaneous campaigns;

    measure the impact of local, online marketing campaigns on the in-store sales of specific locations; and

    automate and streamline the execution of local marketing with minimal lead time and human intervention.

Our Competitive Strengths

        We believe we have the following competitive strengths:

    Pioneering solution with compelling value proposition.    Our proprietary, predictive business intelligence engine identifies, in real time, consumers likely to be receptive to our customers' advertisements, thereby focusing marketing spend on the most efficient and effective channel.

    Virtuous cycle of data aggregation.    As our business intelligence engine analyzes and makes millions of predictions about consumer intent, our solution learns from each action, enabling us to programmatically improve our algorithms and the results we deliver to our customers.

    Proprietary, data-driven understanding of consumer intent and behavior.    We have developed a proprietary business intelligence engine that predicts consumer purchase intent for products generally purchased offline.

    Deep relationships with national brands across key industries.    Leading national brands trust us to help them automate and execute local marketing campaigns.

Our Growth Strategies

        The core elements of our growth strategy include:

    Increase share of spend from existing customers.    Our goal is to capture an increasing share of our existing customers' marketing budgets by working with more of their national brands, growing the number of physical store locations of retailers through which they sell their products, and broadening the number of regions and geographies covered by our solution.

    Acquire new customers.    We believe that many national brands can benefit from our proprietary, technology-driven local marketing solution, and we plan to invest in growing our sales organization and marketing efforts in order to reach these potential customers.

    Further penetrate new industries.    Historically, we have focused primarily on serving national brands in three industries—consumer products, retail and automotive—and have recently expanded into three new industries—healthcare, telecommunications and entertainment. Our plan is to continue to penetrate these new industries and pursue opportunities in additional industries.

 

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    Continue to innovate and invest in our technology.    We plan to continue to make substantial investments in our technology and product development to enhance the effectiveness of our solution in an effort to deliver increasing value to our customers.

    Expand internationally.    We believe that our technology and solution can be adapted to other countries where national brands face similar local marketing challenges. We recently established a presence in the United Kingdom and expect to explore additional international expansion opportunities.

Key Financial and Operating Performance Metrics

        The following metrics aid us in developing and refining our growth strategies and making strategic decisions:

 
  Year Ended December 31,   Nine Months Ended
September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands, except number of enterprise customers)
 

Revenue

  $ 14,679   $ 35,072   $ 66,068   $ 41,817   $ 67,864  

Revenue ex-TAC

  $ 6,917   $ 18,587   $ 38,356   $ 24,657   $ 40,312  

Adjusted EBITDA

  $ (4,648 ) $ (5,116 ) $ 2,631   $ 621   $ (6,859 )

Number of enterprise customers

    106     225     304     292     431  
    Revenue ex-TAC is a non-GAAP financial measure defined by us as revenue less traffic acquisition costs, which consist of purchases of advertising impressions from RTB exchanges. This metric is meaningful because it is frequently used for internal management purposes and combines the important factors of our ability to sustain pricing with our customers, purchase inventory at reasonable and expected prices, and to scale our business. See "—Summary Consolidated Financial Data."

    Adjusted EBITDA represents our net loss before income taxes, interest expense, and depreciation and amortization, adjusted to eliminate stock-based compensation expense and the change in the fair value of convertible preferred stock warrant liability. We evaluate Adjusted EBITDA because we believe it provides a useful measure for period-to-period comparisons of our core business. See "—Summary Consolidated Financial Data."

    We believe our ability to attract new customers onto our MaxPoint Intelligence Platform is an important component of our growth strategy. We also believe that those customers from which we have generated more than $10,000 of revenue during any trailing twelve-month period best identifies customers that are actively using our solution and contribute more meaningfully to revenue. We refer to these customers as our enterprise customers. As of December 31, 2011, 2012 and 2013 and September 30, 2014, customers from which we have generated less than $10,000 of revenue during the previous trailing twelve-month period have accounted for less than 2% of our revenue.

Risks Related to Our Business

        Our business is subject to numerous risks of which you should be aware before making an investment decision, described more fully in the "Risk Factors" section immediately following this prospectus summary. These risks represent challenges to the successful implementation of our strategy and to the growth and future profitability of our business. These risks include the following:

    Our limited operating history makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment.

    We have a history of losses, we expect our operating expenses to continue to increase substantially and we may not achieve or sustain profitability in the future.

 

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    If the MaxPoint Intelligence Platform does not accurately predict the most likely local buyers for specific products, we could lose revenue, which would have a material adverse impact on our operating results and financial condition.

    Our operating results fluctuate, which make our future results difficult to predict and could cause our operating results to fall below analysts' and investors' expectations.

    If we are unable to attract new customers or our existing customers do not allocate a greater portion of their marketing spend to us, our revenue growth will be adversely affected.

    If we fail to develop new solutions and services or enhance our existing solution and services, we may not attract and retain customers, and our revenue and results of operations may decline.

    If we do not manage our growth effectively, the quality of our solution may suffer, and our operating results may be negatively affected.

    We may not be able to compete successfully against current and future competitors, which may result in declining revenue or inability to grow our business.

    We have historically relied, and expect to continue to rely, on a small number of customers for a significant portion of our revenue, and the loss of any of these customers may significantly harm our business, results of operations and financial condition.

    We rely on advertising agencies that act on behalf of our customers for a substantial majority of our revenue. Multiple advertising agencies operating within three global advertising networks represented numerous customers accounting for approximately 18%, 13% and 10% of our revenue, respectively, for the year ended December 31, 2013. For the nine months ended September 30, 2014, multiple advertising agencies operating within one global advertising network represented numerous customers accounting for approximately 15% of our revenue. The loss of any such relationships or increased competition from such advertising agencies or agency trading desks could materially harm our business.

    Legislation and regulation of online businesses, including privacy and data protection regimes, could create unexpected costs, subject us to enforcement actions for compliance failures or cause us to change our technology platform or business model, which may have a material adverse effect on our business.

    Our ability to generate revenue depends on our collection of significant amounts of data from various sources.

Corporate Information

        We were incorporated in the state of Delaware in September 2006. Our principal executive offices are located at 3020 Carrington Mill Blvd., Suite 300, Morrisville, North Carolina 27560. Our telephone number is (800) 916-9960. Our website address is www.maxpoint.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our common stock.

        MaxPoint, the MaxPoint logo, MaxPoint Interactive, Digital Zip and other trademarks or service marks of MaxPoint appearing in this prospectus are the property of MaxPoint. This prospectus contains additional trade names, trademarks and service marks of ours and of other companies. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

 

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THE OFFERING

Common stock offered

               shares

Common stock to be outstanding after this offering

 

             shares

Over-allotment option

 

             shares

Use of proceeds

 

We expect to receive net proceeds from this offering of approximately $          million, after deducting the underwriting discount and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for general corporate purposes, including working capital, sales and marketing activities, engineering initiatives including enhancement of our solution, investment in technology and development and capital expenditures. We also may use a portion of the net proceeds from this offering to acquire or invest in technologies, solutions or businesses that complement our business, although we have no present commitments, and have not allocated specific amounts of net proceeds, to complete any such transactions or plans. See "Use of Proceeds."

Risk factors

 

You should read the "Risk Factors" section of this prospectus beginning on page 13 for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.

Proposed             symbol

 

"MXPT"

        The number of shares of our common stock to be outstanding after this offering is based on 37,689,073 shares of our common stock outstanding as of September 30, 2014, and excludes:

    6,695,951 shares of common stock issuable upon the exercise of options outstanding as of September 30, 2014 under our 2010 Equity Incentive Plan, with a weighted average exercise price of $3.23 per share;

    990,850 shares of common stock issuable upon the exercise of options granted after September 30, 2014 under our 2010 Equity Incentive Plan, with a weighted average exercise price of $7.27 per share;

    200,000 shares of common stock issuable upon the exercise of lender warrants outstanding as of September 30, 2014 with an exercise price of $5.68 per share;

    100,000 shares of common stock issuable upon the exercise of lender warrants outstanding issued after September 30, 2014 with an exercise price of $5.68 per share; and

                           shares of our common stock reserved for future issuance under our equity compensation plans, consisting of 974,894 shares of our common stock that were reserved for issuance under our 2010 Equity Incentive Plan as of September 30, 2014, and             shares of our common stock reserved for issuance under our 2015 Equity Incentive Plan. On

 

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      the date immediately prior to the date of this prospectus, any remaining shares available for issuance under our 2010 Equity Incentive Plan were added to the shares reserved under our 2015 Equity Incentive Plan and we ceased granting awards under the 2010 Equity Incentive Plan. Our 2015 Equity Incentive Plan also provides for automatic annual increases in the number of shares reserved thereunder, as more fully described in "Executive Compensation—Equity Plans."

        Except as otherwise indicated, all information in this prospectus assumes:

    the effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws in connection with the completion of this offering;

    the automatic conversion of our outstanding convertible preferred stock into an aggregate of 29,697,650 shares of our common stock, the conversion of which will occur immediately prior to the completion of this offering;

    no exercise of outstanding options described above; and

    no exercise by the underwriters of their right to purchase up to an additional             shares of common stock to cover over-allotments.

 

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Summary Consolidated Financial Data

        The following tables summarize our consolidated financial data. You should read this summary consolidated financial data together with the sections entitled "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes that are included elsewhere in this prospectus.

        The consolidated statements of operations data for the years ended December 31, 2011, 2012 and 2013, and the consolidated balance sheet data as of December 31, 2011, 2012 and 2013 are derived from our audited consolidated financial statements that are included elsewhere in this prospectus. The condensed consolidated statements of operations data for the nine months ended September 30, 2013 and 2014 and the condensed consolidated balance sheet data as of September 30, 2014 are derived from our unaudited consolidated financial statements that are included elsewhere in this prospectus. The unaudited consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements and include, in management's opinion, all adjustments, consisting only of normal recurring adjustments that we consider necessary for a fair presentation of the financial information set forth in those statements. Our historical results are not necessarily indicative of the results that may be expected in the future, and our interim results are not necessarily indicative of the results to be expected for the full year or any other period.

 
  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands, except share and per share data)
 

Consolidated Statements of Operations Data:

                               

Revenue

  $ 14,679   $ 35,072   $ 66,068   $ 41,817   $ 67,864  

Traffic acquisition costs

    7,762     16,485     27,712     17,160     27,552  

Other cost of revenue

    1,295     2,982     3,904     2,721     5,360  
                       

Gross profit

    5,622     15,605     34,452     21,936     34,952  

Operating expenses:

   
 
   
 
   
 
   
 
   
 
 

Sales and marketing

    6,325     12,938     20,475     13,771     26,905  

Research and development

    2,555     5,376     8,666     6,014     10,102  

General and administrative

    2,117     4,043     5,217     3,342     8,440  
                       

Total operating expenses

    10,997     22,357     34,358     23,127     45,447  

(Loss) income from operations

    (5,375 )   (6,752 )   94     (1,191 )   (10,495 )

Other expense (income):

                               

Interest expense

    88     27     283     187     1,005  

Other expense (income)

    31     (19 )   (2 )   (2 )   (2 )
                       

Total other expense (income)

    119     8     281     185     1,003  

Loss before income taxes

    (5,494 )   (6,760 )   (187 )   (1,376 )   (11,498 )

Provision for income taxes

    —       —       —       —       —    
                       

Net loss

  $ (5,494 ) $ (6,760 ) $ (187 ) $ (1,376 ) $ (11,498 )
                       
                       

Net loss per share of common stock—basic and diluted

  $ (1.11 ) $ (1.07 ) $ (0.03 ) $ (0.19 ) $ (1.49 )
                       
                       

Pro forma net loss per share of common stock—basic and diluted(1):

              $ (0.01 )       $ (0.31 )
                             
                             

Weighted average shares of common stock used in computing net loss per share—basic and diluted

   
4,965,155
   
6,340,942
   
7,417,068
   
7,398,718
   
7,737,968
 
                       
                       

Weighted average shares of common stock used in computing pro forma net loss per share—basic and diluted(1):

                37,114,718           37,435,618  
                             
                             

 

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  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands)
 

Stock-based compensation expense included above:

                               

Other cost of revenue

  $ 1   $ 2   $ 6   $ 4   $ 11  

Sales and marketing

    32     137     212     152     331  

Research and development

    21     155     276     188     461  

General and administrative

    230     259     85     64     651  

Other financial data:

   
 
   
 
   
 
   
 
   
 
 

Revenue ex-TAC(2)

  $ 6,917   $ 18,587   $ 38,356   $ 24,657   $ 40,312  

Adjusted EBITDA(3)

  $ (4,648 ) $ (5,116 ) $ 2,631   $ 621   $ (6,859 )

(1)
Pro forma basic and diluted net loss per share of common stock have been calculated assuming the conversion of all outstanding shares of convertible preferred stock into 29,697,650 shares of common stock as of the beginning of the applicable period or at the time of issuance, if later.
(2)
Revenue ex-TAC is not a financial measure prepared in accordance with GAAP. We define Revenue ex-TAC as revenue less traffic acquisition costs. Traffic acquisition costs consist of purchases of advertising impressions from RTB exchanges on a CPM basis. See "—Non-GAAP Financial Measures" for more information and for a reconciliation of Revenue ex-TAC to revenue, the most directly comparable financial measure calculated in accordance with GAAP.
(3)
Adjusted EBITDA is not a financial measure prepared in accordance with GAAP. We define Adjusted EBITDA as net loss before income taxes, interest expense, and depreciation and amortization, adjusted to eliminate stock-based compensation expense and change in fair value of convertible preferred stock warrant liability. See "—Non-GAAP Financial Measures" for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated in accordance with GAAP.

 
  As of September 30, 2014  
 
  Actual   Pro forma(1)   Pro forma
as adjusted(2)
 
 
  (in thousands)
 

Consolidated Balance Sheet Data:

                   

Cash and cash equivalents

  $ 12,480   $ 12,480   $    

Accounts receivable, net

    29,443     29,443        

Working capital

    22,586     22,586        

Total assets

    54,702     54,702        

Long-term debt, net

    30,862     30,862        

Total liabilities

    52,645     52,645        

Total convertible preferred stock

    25,476     —          

Total stockholders' (deficit) equity

    (23,419 )   2,057        

(1)
The pro forma column reflects the conversion of all outstanding shares of convertible preferred stock into 29,697,650 shares of common stock immediately prior to the closing of this offering.
(2)
The pro forma as adjusted column reflects the pro forma adjustment described in footnote (1) above and the sale by us of shares of common stock in this offering at an assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriting discount and commissions and estimated offering expenses payable by us. A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) each of pro forma as adjusted cash and cash equivalents, working capital and total assets by $             and decrease (increase) pro forma as adjusted total stockholders' (deficit) equity by approximately $             , assuming the number of shares we are offering, as set forth on the cover page of this prospectus, remains the same, after deducting the underwriting discount and commissions and estimated offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price, number of shares offered and other terms of this offering determined at pricing.

 

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Non-GAAP Financial Measures

Revenue ex-TAC

        We believe that Revenue ex-TAC is a meaningful measure of operating performance because it is frequently used for internal management purposes, indicates the effectiveness of delivering results to advertisers and facilitates a more complete period-to-period understanding of factors and trends affecting our underlying revenue performance. A limitation of Revenue ex-TAC is that it is a measure that other companies, including companies in our industry that have similar business arrangements, either may not use or may calculate differently, which reduces its usefulness as a comparative measure. Because of these and other limitations, we consider, and you should consider, Revenue ex-TAC alongside other GAAP financial measures, such as revenue, gross profit and total operating expenses. The following table presents a reconciliation of Revenue ex-TAC to revenue for each of the periods indicated:

 
  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands)
 

Revenue

  $ 14,679   $ 35,072   $ 66,068   $ 41,817   $ 67,864  

Less: traffic acquisition costs

    (7,762 )   (16,485 )   (27,712 )   (17,160 )   (27,552 )
                       

Revenue ex-TAC

  $ 6,917   $ 18,587   $ 38,356   $ 24,657   $ 40,312  
                       
                       

 

Adjusted EBITDA

        We have included Adjusted EBITDA in this prospectus because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operating plans. In particular, we believe the exclusion of certain items in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors in understanding and evaluating our operating results.

        Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

    Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

    Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;

    Adjusted EBITDA does not reflect interest or tax payments that may represent a reduction in cash available to us; and

    other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

 

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        Because of these and other limitations, we consider, and you should consider, Adjusted EBITDA together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and our other GAAP results. The following table presents a reconciliation of net loss to Adjusted EBITDA for each of the periods indicated:

 
  Year Ended December 31,   Nine Months
Ended
September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands)
 

Net loss

  $ (5,494 ) $ (6,760 ) $ (187 ) $ (1,376 ) $ (11,498 )

Adjustments:

                               

Interest expense

    88     27     283     187     1,005  

Provision for income taxes

    —       —       —       —       —    

Depreciation and amortization

    443     1,063     1,956     1,402     2,180  

Stock-based compensation

    284     553     579     408     1,454  

Change in fair value of warrant to purchase Series A convertible preferred stock

    31     1     —       —       —    
                       

Adjusted EBITDA

  $ (4,648 ) $ (5,116 ) $ 2,631   $ 621   $ (6,859 )
                       
                       

 

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes, before deciding whether to purchase shares of our common stock. If any of the following risks actually occurs, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the price of our common stock could decline and you could lose part or all of your investment.

Risks Related to Our Business and Industry

Our limited operating history makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment.

        We commenced operations in 2006 and, as a result, have only a limited operating history upon which our business and future prospects may be evaluated. Although we have experienced substantial revenue growth in recent years, we may not be able to sustain this rate of growth or even maintain our current revenue levels. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly developing and changing industries. Our and our business prospects will depend in large part on our ability to:

    build a reputation for a superior solution and create trust and long-term relationships with customers and advertising agencies;

    distinguish ourselves from competitors in our industry;

    develop and offer a competitive technology platform and offerings that meet our customers' evolving needs;

    maintain and expand our relationships with the real-time bidding, or RTB, exchanges through which we execute our customers' digital marketing campaigns;

    respond to evolving industry standards and government regulations that impact our business, particularly in the areas of data collection and consumer privacy;

    prevent or otherwise mitigate failures or breaches of security or privacy;

    expand our business internationally; and

    attract, hire, integrate and retain qualified and motivated employees.

        We may need to adapt our current operations to scale our business and achieve long-term profitability. If we are unable to meet one or more of these objectives or fail to implement these changes effectively and on a timely basis, or if we are unable to implement them at all, our revenue may decline, we may not be able to achieve further growth or long-term profitability and our business may suffer.

We have a history of losses, we expect our operating expenses to continue to increase substantially and we may not achieve or sustain profitability in the future.

        We incurred net losses of $5.5 million, $6.8 million and $0.2 million in 2011, 2012 and 2013, respectively, and a net loss of $11.5 million for the nine months ended September 30, 2014. As of September 30, 2014, we had an accumulated deficit of $27.4 million. Although our revenue has increased significantly in recent periods, we may not be able to achieve or sustain profitability or this revenue growth rate. In addition, our operating expenses have increased with our revenue

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growth and we expect our traffic acquisition costs and operating expenses to continue to increase substantially as we expand our business, including adding sales, marketing and related support employees in existing and new territories, engineering employees to support continued investments in our technology platform and general and administrative employees to support our growth and expansion as well as our transition to being a public company. If we do not achieve and sustain profitability, our revenue growth rate declines or our expenses exceed expectations, our financial performance will be adversely affected.  

If the MaxPoint Intelligence Platform does not accurately predict the most likely local buyers for specific products, we could lose revenue, which would have a material adverse impact on our operating results and financial condition.

        Our solution depends on the ability of the MaxPoint Intelligence Platform to accurately predict the most likely communities of local buyers for specific products and to serve advertisements for those products to those communities. We do not have long-term commitments from our customers and it is relatively easy for our customers or the advertising agencies acting on their behalf to seek alternative providers of digital marketing solutions, as there are no significant switching costs. Thus, we must continuously deliver satisfactory results for our customers to maintain and increase revenue, which depends in part on the continued performance of the MaxPoint Intelligence Platform. Our failure to continuously innovate and improve on the algorithms underlying the MaxPoint Intelligence Platform could result in poor performance, which could in turn result in our customers ceasing to use our solution, which would have a material adverse impact on our operating results and financial condition.

Our operating results fluctuate, which make our future results difficult to predict and could cause our operating results to fall below analysts' and investors' expectations.

        Our quarterly and annual operating results have fluctuated in the past, and we expect this to continue for the foreseeable future. These fluctuations could cause our performance to fall below the expectations of securities analysts and investors, and adversely affect the price of our common stock. Because our business is evolving rapidly, our historical operating results may not be useful in predicting our future operating results. Factors that may increase the volatility of our operating results include the factors set forth in this "Risk Factors" section, as well as the following:

    changes in the economic prospects of our customers or the economy generally, which could alter current or prospective customers' spending priorities, or increase the time or costs required to complete sales;

    changes in demand for and pricing of our MaxPoint Intelligence Platform;

    the impact of macroeconomic factors and seasonality on our customers' businesses and budgets for digital marketing campaigns, particularly our consumer product and retail customers;

    unpredictable sales cycles;

    changes in our pricing policies, or the pricing policies of our competitors, RTB exchanges or other third-party service providers;

    the addition or loss of customers;

    the growth or reduction of business with current customers or advertising agencies that act on their behalf;

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    changes in our customers' advertising budget allocations, agency affiliations or marketing strategies;

    changes and uncertainty in the regulatory environment for us or our customers;

    changes in the availability of media inventory through RTB exchanges;

    the introduction of new technologies, products or service offerings by our competitors;

    changes in our operating expenses and capital expenditures; and

    costs related to acquisitions of people, businesses or technologies.

        Based upon all of the factors described above, many of which are beyond our control, and others that we may not anticipate, we have a limited ability to forecast our future revenue, costs and expenses, and as a result, our operating results may fall below our estimates or the expectations of securities analysts and investors.

If we are unable to attract new customers or our existing customers do not allocate a greater portion of their marketing spend to us, our revenue growth will be adversely affected.

        To sustain or increase our revenue, we must add new customers and encourage existing customers to allocate a greater portion of their marketing spend to us. As the digital advertising industry matures and competitors introduce lower cost or differentiated products or services, our ability to sell our solution could be impaired. Even after a successful digital marketing campaign or series of campaigns with an existing customer, we frequently must compete to win further business from that customer. We may reach a point of saturation where we cannot continue to grow our revenue from existing customers because of, among other things, internal limits that they may place on their advertising budgets for digital media, particular digital marketing campaigns, local advertising or a particular provider. If we are unable to attract new customers or obtain new business from existing customers, our revenue, growth and business will be adversely affected.

If we fail to develop new solutions and services or enhance our existing solution and services, we may not attract and retain customers, and our revenue and results of operations may decline.

        We compete for customers that want to execute digital marketing campaigns. Our industry is subject to rapid changes in standards, technologies, products and service offerings, as well as advertiser expectations. We continuously need to develop new solutions and services and enhance our existing solution and services to meet advertiser demands and respond to industry changes. New customer demands, superior competitive offerings or new industry standards could render our existing solution unattractive, unmarketable or obsolete and require us to make substantial changes to our technology platform or business model. Our failure to adapt to a rapidly changing market or to anticipate customer demand could harm our business and our financial performance.

If we do not manage our growth effectively, the quality of our solution may suffer, and our operating results may be negatively affected.

        We continue to experience rapid growth in our headcount and operations, which will continue to place significant demands on our management, operational and financial infrastructure. To manage our growth effectively, we must continue to improve and expand our infrastructure, including our IT systems, financial and administrative systems and controls. We must also continue to manage our employees, operations, finances, research and development and capital investments efficiently. Our productivity and the quality of our solution may be adversely affected if we do not integrate and train our new employees, particularly our sales and account management personnel,

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quickly and effectively. If we continue our rapid growth, we may incur significant additional expenses, and our growth may continue to strain our management, resources, infrastructure and ability to maintain the quality of our solution. If the current and future members of our management team do not effectively scale with our growth, the quality of our solution may suffer and our corporate culture may be harmed. Failure to manage our future growth effectively could cause our business to suffer, which, in turn, could have an adverse impact on our results of operations and financial condition.

We may not be able to compete successfully against current and future competitors, which may result in declining revenue or inability to grow our business.

        Competition for our customers' advertising budgets is intense, and we expect competition to increase in the future with more advertising occurring online. Our principal competition includes traditional advertising and direct marketing companies, such as Gannett Company, Inc., The McClatchey Company, News America Marketing, Valassis Communications, Inc. and Valpak Direct Marketing Systems, Inc. In addition, we compete or may compete with:

    companies that offer demand-side platforms that allow customers to purchase inventory directly from RTB exchanges or other third parties;

    advertising networks and advertising agencies;

    traditional advertising channels, such as television, radio and print;

    services offered through large online portals, such as Yahoo! Inc. and Google Inc.;

    companies providing online search advertising, for which we do not offer a solution; and

    technology companies providing online marketing platforms focused on local businesses.

        Many current and potential competitors have advantages, such as longer operating histories, greater name recognition, larger customer bases, greater access to media inventory, more access to Internet user data and significantly greater financial, technical, sales and marketing resources. Increased competition may result in reduced pricing for our solution, longer sales cycles or a decrease of our market share, any of which could negatively affect our revenue and future operating results and our ability to grow our business.

We have historically relied, and expect to continue to rely, on a small number of customers for a substantial majority of our revenue, and the loss of any of these customers may significantly harm our business, results of operations and financial condition.

        Our customers are primarily enterprises with national brands in a number of industries. We sell our solution either directly to our customers or through advertising agencies that act on behalf of our customers. A relatively small number of customers have historically accounted for a substantial majority of our revenue. For the years ended December 31, 2011, 2012 and 2013, our top ten customers accounted for approximately 57%, 31% and 36% of our revenue, respectively. For the year ended December 31, 2011, one customer accounted for approximately 28% of our revenue, and for the years ended December 31, 2012 and 2013, no single customer represented more than 10% of our revenue. For the nine months ended September 30, 2014, no single customer represented more than 10% of our revenue. We expect that we will continue to depend upon a relatively small number of customers for a substantial majority of our revenue for the foreseeable future while we continue to broaden our customer base. As a result, if we fail to successfully attract or retain customers, or if existing customers reduce or delay their marketing spend with us, our business, results of operations and financial condition would be harmed. Moreover, a significant portion of our customers' products are purchased at a limited number of large national retailers.

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Any material decline in these customers' sales at the physical retail locations of these large national retailers may adversely impact our business.  

We rely on advertising agencies that act on behalf of our customers for a substantial majority of our revenue. The loss of any such relationships or increased competition from such advertising agencies or agency trading desks could materially harm our business.

        We rely on advertising agencies that act on behalf of our customers for a substantial majority of our revenue. Multiple advertising agencies operating within three global advertising networks represented numerous customers accounting for approximately 18%, 13% and 10% of our revenue, respectively, for the year ended December 31, 2013. For the nine months ended September 30, 2014, multiple advertising agencies operating within one global advertising network represented numerous customers accounting for approximately 15% of our revenue. In addition, for reasons specific to individual agencies, some agencies may not recommend us to the national brands they represent, even if our solution is more effective than alternative solutions. Certain of those agencies are creating their own competitive solutions, referred to as agency trading desks. If the agency trading desks are successful in leveraging agency relationships with our customers, we may be unable to compete successfully even if our solution is more effective.

Potential "Do Not Track" standards or government regulation could negatively impact our business by limiting our access to the anonymous user data that the MaxPoint Intelligence Platform uses to predict local purchase demand and execute the digital marketing campaigns we run, and as a result may degrade our performance for our customers, which, in turn, may have a material adverse effect on our business.

        As the use of cookies and other tracking mechanisms has received ongoing media attention, and some government regulators and privacy advocates have suggested creating a "Do Not Track" standard that would allow Internet users to express a preference, independent of cookie settings in their browser, not to have website browsing recorded. In 2010, the Federal Trade Commission, or FTC, issued a staff report criticizing the advertising industry's self-regulatory efforts as too slow and lacking adequate consumer protections. The FTC emphasized a need for simplified notice, choice and transparency to consumers regarding collection, use and sharing of data, and it suggested implementing a "Do Not Track" browser setting that allows consumers to choose whether to allow "tracking" of their online browsing activities. For example, in a 2012 report, the FTC encouraged continued improvements in consumer choice with respect to behavioral advertising and full implementation of a "Do Not Track" mechanism. All of the major Internet browsers have implemented some version of a "Do Not Track" setting. Microsoft's Internet Explorer 10 includes a "Do Not Track" setting that is selected by default. However, there is no definition of "tracking," no clarity as to the specific technologies or practices that would be affected, no consensus regarding what message is conveyed by a "Do Not Track" setting and no industry standards regarding how to respond to a "Do Not Track" preference. The World Wide Web Consortium chartered a "Tracking Protection Working Group" in 2011 to convene a multi-stakeholder group of academics, thought leaders, companies, industry groups and consumer advocacy organizations, to create a voluntary "Do Not Track" standard for the web. The group has yet to agree upon a standard. The FTC has stated that it will pursue a legislative solution if the industry cannot agree upon a standard. The "Do-Not-Track Online Act of 2013" was introduced in the United States Senate in February 2013, and similar legislation has been and could be introduced at the federal and state levels. If a "Do Not Track" browser setting is adopted by many Internet users, and the standard either imposed by state or federal legislation, or agreed upon by standard setting groups, prohibits us from using non-personal data as we currently do, then that could hinder growth of advertising and content production on the web generally, cause us to change our business practices and have a material adverse effect on our business.

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        Furthermore, in the European Union, or E.U., Directive 2009/136/EC, commonly referred to as the "Cookie Directive," directs E.U. member states to ensure that accessing information on an Internet user's computer, such as through a cookie or other tracking mechanism, is allowed only if the Internet user has given his or her consent. In response, member states have adopted and implemented, and may continue to adopt and implement further legislation that negatively impacts the use of cookies and other tracking mechanisms for online advertising. Limitations on the use or effectiveness of cookies, whether imposed by E.U. member state implementation of the Cookie Directive or otherwise, may impact the performance of our solution, cause us to change our business practices and have an adverse effect on our business.

Legislation and regulation of online businesses, including privacy and data protection regimes, could create unexpected costs, subject us to enforcement actions for compliance failures, or cause us to change our technology platform or business model, which may have a material adverse effect on our business.

        Legislation and government regulation, including laws and regulations that limit our ability to collect and analyze the data we use in our MaxPoint Intelligence Platform, could adversely affect our business and operating results. U.S. and foreign governments have enacted or are considering legislation related to online advertising, and we expect to see an increase in legislation and regulation related to advertising online, the use of geolocation data to inform advertising, the collection and use of anonymous Internet user data and unique device or other identifiers (such as IP addresses or mobile device identifiers), and other data protection and privacy regulation. Such legislation or regulation could affect the costs of doing business online, and may adversely affect the demand for our solution or otherwise harm our business, results of operations, and financial condition. For example, a wide variety of provincial, state, national, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. While we do not collect data that traditionally has been considered personal data by U.S. regulators (such as name, email address, address, phone numbers, social security numbers, credit card numbers or individualized financial or health data), we typically do collect and store IP addresses, device identifiers, geolocation information, cookie data and other data that are or may be considered personal data in some jurisdictions or otherwise may be the subject of legislation or regulation. Evolving and changing definitions of personal data, within the European Union, the United States, and elsewhere, especially relating to classification of IP addresses, machine or device identifiers, location data, and other information, have in the past, and may cause us in the future, to change our business practices, or may limit or inhibit our ability to operate or expand our business. Similarly, the law is unsettled concerning the definition and permissible uses of "sensitive" data, including with respect to certain financial, geolocation and health data. Regulators and legislators have proposed additional limitations on the collection and use of such data, which could have a material adverse effect on our business. More generally, data protection and privacy-related laws and regulations are evolving and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.

        In addition, data security is of increasing concern to U.S., state and foreign regulators and, as a result, the legal standards for data security and the consequences for violating those standards continue to evolve. And the threat posed by cyber-attacks and data breaches continues to grow. While we take measures to protect the security of information that we collect, use, and disclose in the operation of our business, and to offer certain privacy protections with respect to such information, such measures may not always be effective. In addition, while we take steps to avoid collecting personally identifiable data about consumers, we may inadvertently receive this information from customers or from the advertising agencies that act on their behalf or through the process of delivering advertising.

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        In the United States, our privacy, data security and handling practices are subject to regulation at both the federal and state level, and the FTC and many states actively enforce against unfair and deceptive trade practices, including the violation of privacy policies and representations. Outside of the United States, our privacy and data handling practices are subject to regulation by data protection authorities and other regulators in the countries in which we do business. Our failure to comply with applicable laws and regulations concerning privacy or data security, or to protect personal data, could result in enforcement action against us, including fines, imprisonment of our officers, and public censure; claims for damages by consumers and other affected individuals; damage to our reputation; and loss of goodwill, any of which could have a material adverse impact on our results of operations, financial performance, and business. Moreover, even the perception of privacy or security concerns, whether or not valid, may harm our reputation and inhibit adoption of our solution by current and future customers or the advertising agencies that act on their behalf.

Our ability to generate revenue depends on our collection of significant amounts of data from various sources.

        Our ability to deliver our business intelligence and marketing automation software solution depends on our ability to successfully leverage significant amounts of data, including data that we collect from our customers and acquire from third parties, as well as raw data captured by our proprietary consumer purchase intent model. The foundation of our local targeting is our proprietary Digital Zip architecture, a digital grid of households organized into over 44,000 specific neighborhoods, or Digital Zips. We create a profile for each Digital Zip by using third party data and proprietary data captured by our consumer purchase intent model, including IP addresses and consumer online browsing data, and any limit to our access or use of these types of data could impact our ability to match the most likely community of local buyers with specific products, which could have an adverse effect on our ability to successfully execute our customers' digital marketing campaigns on a real-time basis. Our customers often share with us enterprise data, such as point of sale and spending information, and certain customers provide us with supply chain management and customer relationship management, or CRM, data. If our enterprise customers do not share their data, our ability to scale and provide our solution could be adversely affected. In addition, our ability to successfully leverage vast amounts of data is dependent upon our continued ability to access and utilize up-to-date data. Our ability to access and use such data could be restricted by a number of factors, including consumer choice, restrictions imposed by our customers, changes in technology and new developments in laws, regulations and industry standards. If the data we utilize is out-of-date or stale, our predictions, recommendations and business intelligence will be ineffective and our reputation will suffer. Further, we sometimes use cookies and other tracking mechanisms to deliver our solution, and certain web browsers, including Safari, currently block or are planning to block some or all third-party cookies by default. As a result, we could be blocked from serving advertisements on the basis of cookies to users that utilize web browsers that block third-party cookies. Any limitation on our ability to collect data would make it more difficult for us to deliver effective solutions that meet the needs of national brands. This, in turn, could adversely affect our business and operating results.

We may experience outages and disruptions of our services or experience data security incidents if we fail to maintain adequate security and supporting infrastructure our systems, which may harm our brand and reputation, result in regulatory enforcement, actions or litigation and negatively impact our revenue and results of operations.

        Creating the appropriate support for our technology platform, including storing large amounts of data and managing our computational infrastructure, is expensive and complex, and our failure to create and maintain such support, particularly as we scale our system to support the growth in our business, could result in operational inefficiencies, disruptions or failures and increased

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vulnerability to cyber-attacks. Cyber-attacks could diminish the quality of our services and our performance for customers. Cyber-attacks could include denial-of-service attacks impacting service availability (including the ability to deliver advertisements) and reliability; the exploitation of software vulnerabilities in Internet-facing applications; social engineering of system administrators (tricking company employees into releasing control of their systems to a hacker) or the introduction of computer viruses or malware into our systems with a view to steal confidential or proprietary data. Cyber-attacks of increasing sophistication may be difficult to detect and could result in the theft of our intellectual property and our data or our customers' data. In addition, we are vulnerable to unintentional errors or malicious actions by persons with authorized access to our systems that exceed the scope of their access rights, or unintentionally or intentionally alter parameters or otherwise interfere with the intended operations of our platform. The steps we take to increase the reliability, integrity and security of our systems as they scale may be expensive and may not prevent system failures or unintended vulnerabilities resulting from the increasing number of persons with access to our systems, complex interactions within our technology platform, the increasing number of connections with third-party partners and vendors' technology and the increasing volume of data analyzed by our systems. If we experience a security incident involving consumer data, or we do not comply with legal requirements or industry standards concerning data security, we could face regulatory enforcement actions or private litigation. Operational errors or failures or successful cyber-attacks also could result in damage to our reputation and loss of customers and other business partners which could harm our business. In addition, we could be adversely impacted by outages and disruptions in the online platforms of our key business partners, such as the RTB exchanges, which we rely upon for access to inventory.

We use co-location facilities to deliver our services. Any disruption of service at these facilities could harm our business.

        We maintain servers at co-location facilities in San Jose, California; Somerset, New Jersey; Morrisville, North Carolina; Austin, Texas; and Amsterdam, the Netherlands, and expect to add other data centers at co-location facilities in the future. Although we control the actual computers, networks and storage systems upon which our platform runs, and deploy them to the data center facilities, we do not control the operation of the facilities. The owners of the facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew our agreements on commercially reasonable terms, we may be required to transfer to a new facility or facilities, and we may incur significant costs and possible service interruption in connection with doing so.

        The facilities are vulnerable to damage or service interruption resulting from human error, intentional bad acts, earthquakes, hurricanes, tornadoes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. The occurrence of a natural disaster or an act of terrorism, any outages or vandalism or other misconduct, or a decision to close the facility without adequate notice or other unanticipated problems could result in lengthy interruptions in our services. If we were to lose the data stored in any of our co-location facilities, it could take several days, if not weeks, to recreate this data from multiple sources, which could result in significant negative impact on our business operations, and potential damage to our customer and advertising agency relationships. Our facilities would likely be costly to repair or replace, and any such efforts would likely require substantial time.

        Any changes in service levels at the co-location facilities or any errors, defects, disruptions or other performance problems at or related to the facilities that affect our services could harm our reputation and may damage our customers' businesses. Interruptions in our services might reduce our revenue, subject us to potential liability, or result in reduced usage of our platform.

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        We also depend on third-party Internet-hosting providers and continuous and uninterrupted access to the Internet through third-party bandwidth providers to operate our business. If we lose the services of one or more of our Internet-hosting or bandwidth providers for any reason or if their services are disrupted, for example due to viruses or "denial-of-service" or other attacks on their systems, or due to human error, intentional bad acts, power loss, hardware failures, telecommunications failures, fires, wars, terrorist attacks, floods, earthquakes, hurricanes, tornadoes or similar events, we could experience disruption in our ability to offer our solution or we could be required to retain the services of replacement providers, which could increase our operating costs and harm our business and reputation.

Changes in market standards applicable to our solution could require us to incur substantial additional development costs.

        Market forces, competitors' initiatives, regulatory authorities, industry organizations and security protocols are causing the emergence of demands and standards that are or could be applicable to our solution. We expect compliance with these kinds of standards to become increasingly important to our customers and the consumers they sell their products to, and conforming to these standards is expected to consume a substantial and increasing portion of our development resources. If our solution is not consistent with emerging standards, our market position and sales could be impaired. If we fail to conform with these standards, we will be at a disadvantage to our competitors, and we may face regulatory enforcement actions or private litigation.

Our historical revenue growth has masked seasonal fluctuations in advertising activity. As growth declines or seasonal patterns become more pronounced, seasonality could have a material impact on our results.

        We expect our revenue, operating results, cash flow from operations and other key operating and performance metrics to vary from quarter to quarter in part due to the seasonal nature of our customers' spending on digital marketing campaigns. For example, many advertisers tend to devote a significant portion of their advertising budgets to the fourth quarter of the calendar year to coincide with consumer holiday spending. Moreover, media inventory in the fourth quarter may be more expensive due to increased demand for media inventory. Our historical revenue growth has partially masked the impact of seasonality, but if our growth rate declines or seasonal spending by our customers on marketing campaigns becomes more pronounced, seasonality could have a material impact on our revenue, operating results, cash flow from operations and other key operating and performance metrics from period to period.

We do not have long-term commitments from our customers, and we may not be able to retain customers or attract new customers to sustain or grow current revenue.

        Most of our customers do business with us by placing insertion orders for particular digital marketing campaigns, either directly or through advertising agencies that act on their behalf. We rarely have any commitment from a customer beyond the campaign governed by a particular insertion order, and we frequently must compete to win further business from a customer. In accordance with the Interactive Advertising Bureau, or IAB, our insertion orders may also be cancelled by customers or their advertising agencies prior to the completion of the campaign without penalty. As a result, our success is dependent upon our ability to outperform our competitors and win repeat business from existing customers, while continually expanding the number of customers for which we provide services. Because we do not have long-term agreements, we may not accurately predict future revenue streams, and we cannot guarantee that our current customers will continue to use our solution, or that we will be able to replace departing customers with new customers that provide us with comparable revenue.

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If mobile connected devices, their operating systems or content distribution channels, including those controlled by our competitors, develop in ways that prevent our digital marketing campaigns from being delivered to the users of these devices, our ability to grow our business will be impaired.

        Our success in the mobile channel depends upon the ability of our technology platform to integrate with mobile inventory suppliers and provide advertising for most mobile connected devices, as well as integrate with the major operating systems that run on them and the thousands of applications that are downloaded onto them. The design of mobile devices and operating systems is controlled by third parties with which we do not have any formal relationships. These parties frequently introduce new devices, and from time to time they may introduce new operating systems or modify existing ones. Network carriers may also impact the ability to access specified content on mobile devices. If our solution is or becomes unable to work on these devices or operating systems, either because of technological constraints or because a maker of these devices or developer of these operating systems wishes to impair our ability to provide advertisements on them, our ability to generate revenue could be significantly harmed.

The digital advertising market is relatively new and dependent on growth in various digital advertising channels. If this market develops more slowly or differently than we expect, our business, growth prospects and financial condition would be adversely affected.

        The digital advertising market is relatively new and our solution may not achieve or sustain high levels of demand and market acceptance. While display advertising has been used successfully for many years, marketing through new digital advertising channels, such as mobile, social media and digital video advertising, is not as well established. The future growth of our business depends not only on the growth of the digital display advertising market, but also the level of acceptance and expansion of emerging digital advertising channels. In addition, our growth will depend on the increased adoption by the advertising industry of automation in lieu of manual operations for order placement. Any expansion of the market for digital advertising solutions depends on a number of factors and the cost, performance and perceived value associated with digital advertising solutions. If demand for digital display advertising, the acceptance of emerging digital advertising channels and adoption of advertising automation does not continue to grow, or if digital advertising solutions or advertising automation do not achieve widespread adoption, our revenue and results of operations could be harmed.

We currently depend on display advertising. A decrease in the use of display advertising, or our inability to further penetrate display, mobile, social and video advertising channels would harm our business, growth prospects, operating results and financial condition.

        Historically, our customers have predominantly used our solution for display advertising, and the substantial majority of our revenue is derived from advertisers, typically through their agencies, that use our solution for display advertising. We expect that display advertising will continue to be a primary channel for our customers. If our customers were to lose confidence in the value or effectiveness of display advertising, the demand for our solution may decline. In addition, our failure to achieve market acceptance of our solution for mobile, social and video advertising would harm our growth prospects, operating results and financial condition.

Our international expansion subjects us to additional costs and risks, may not yield returns in the foreseeable future, and may not be successful.

        Currently, we have operations in the United Kingdom, which began in 2014. We expect to expand our international operations in the future, and our limited experience in operating our business internationally increases the risk that any potential future expansion efforts that we may undertake will not be successful.

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        Our international expansion presents challenges and risks to our business and requires significant attention from our management, finance, analytics, operations, sales and engineering teams to support digital marketing campaigns abroad. We may incur significant operating expenses as a result of our international expansion, and it may not be successful. Compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business abroad, may interfere with our ability to offer our solution competitively to customers in one or more countries and may expose us or our employees to fines and penalties. Laws and regulations that may impact us include tax laws, employment laws, regulations related to data privacy and security, U.S. laws such as the Foreign Corrupt Practices Act and local laws prohibiting corrupt payments to governmental officials and private entities, such as the U.K. Bribery Act. Violations of these laws or regulations could result in monetary damages, criminal sanctions against us, our officers or our employees, and prohibitions on the conduct of our business.

        Our international business also subjects us to the impact of global and regional recessions and economic and political instability, costs and difficulties in managing a distributed workforce, potentially adverse tax consequences in the United States and abroad and restrictions on the repatriation of funds to the United States. Our failure to manage these risks and challenges successfully could materially and adversely affect our business, financial condition and results of operations.

If we fail to detect fraud or if we serve our customers' advertisements on objectionable websites, our brand and reputation will suffer, which would negatively impact our business, financial condition and results of operations.

        Our business depends in part on providing our customers with a service that they trust, and we have contractual commitments to take reasonable measures to prevent customers' advertisements from appearing on undesirable websites or on certain websites that they identify. We use proprietary technology to detect click fraud and block inventory that we suspect to be fraudulent. We also use third-party services in an effort to prevent our customers' advertisements from appearing on undesirable websites. Preventing and combating fraud requires constant vigilance, and we may not always be successful in our efforts to do so. We may serve advertising on web sites that is objectionable to our customers, and we may lose the trust of our customers, which would harm our brand and reputation and negatively impact our business, financial condition and results of operations. We may also purchase inventory inadvertently that proves to be unacceptable for digital marketing campaigns, such as advertising inventory on objectionable or undesirable websites, in which case we would be responsible for the cost and could not bill that cost to any customer.

Our revenue could decline and our growth could be impeded if our access to quality media inventory or impressions is diminished or if we fail to acquire new media inventory or impressions.

        Our success depends on our ability to secure quality media inventory on reasonable terms across a broad range of advertising networks and exchanges, including RTB exchanges, such as Google's DoubleClick Ad Exchange, Rubicon Project, PubMatic and AppNexus, as well as suppliers of video and mobile inventory.

        The amount, quality and cost of inventory and impressions available to us can change at any time. Three RTB exchanges each provided 10% or more of our total impression purchases for the year ended December 31, 2013, and these three exchanges together accounted for approximately 88% of our total impression purchases, with the largest exchange accounting for approximately 43% of our impression purchases. If we are not able to access the impressions on any of these exchanges due to a change in our relationship with that exchange or the exchange's financial difficulty, our revenue could decline and growth could be impeded.

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        Our media inventory suppliers are generally not bound by long-term agreements. As a result, there is no guarantee that we will have access to a consistent supply of quality inventory. Moreover, the number of competing intermediaries that purchase advertising inventory from RTB exchanges continues to increase, which could put upward pressure on inventory costs. If we are unable to compete favorably for media inventory available on RTB exchanges, or if RTB exchanges decide not to make their media inventory available to us, we may not be able to place advertisements at competitive rates or find alternative sources of inventory with comparable traffic patterns and consumer demographics in a timely manner.

        Suppliers control the real-time bidding process for the inventory they supply, and their processes may not always work in our favor. For example, suppliers may place restrictions on the use of their inventory, including prohibiting the placement of advertisements on behalf of certain customers. Through the bidding process, we may not win the media inventory that we have selected and may not be able to replace media inventory that is no longer made available to us. Moreover, any material changes to, or the disappearance of, the real-time bidding ecosystem could negatively impact our business by limiting our ability to target and selectively purchase impressions.

        If we are unable to maintain a consistent supply of quality media inventory for any reason, our business, customer retention and loyalty, financial condition and results of operations could be harmed.

Our sales and marketing efforts require significant investment, which may not yield returns in the foreseeable future, if at all.

        We have invested significant resources in our sales and marketing teams to educate potential and prospective customers, either directly or through the advertising agencies that act on their behalf, about the value of our solution. We are often required to explain how our solution can optimize digital marketing campaigns in real time. We often spend substantial time and resources responding to requests for proposals from potential customers or their advertising agencies, including developing material specific to the needs of such potential customers. We may not be successful in attracting new customers despite our investment in our business development, sales and marketing organizations.

Our sales cycle can be unpredictable, which may cause our operating results to fluctuate.

        The sales cycle for our solution, from initial contact with a potential lead to agreement execution and implementation, varies widely by customer, and typically ranges from one to six months. Some of our customers undertake an evaluation process that involves not only our solution but also those of our competitors, which can delay purchase decisions. Our sales efforts involve educating our customers about the use, technical capabilities and benefits of our solution. If sales expected from a customer are not realized in the time period expected or not realized at all, or if a customer terminates its agreement with us, our business, operating results and financial condition could be adversely affected.

If we do not effectively grow and train our sales team, we may be unable to add new customers or increase sales to our existing customers and our business will be adversely affected.

        We continue to be substantially dependent on our sales team to obtain new customers and to drive sales from our existing customers. We believe that there is significant competition for sales personnel with the skills and technical knowledge that we require. Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training, integrating and retaining sufficient numbers of sales personnel to support our growth. New hires require significant training and it may take significant time before they achieve full productivity. Our recent hires and

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planned hires may not become productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals in the markets where we do business or plan to do business. In addition, as we continue to grow rapidly, a large percentage of our sales team will be new to the company and our solution. If we are unable to hire and train sufficient numbers of effective sales personnel, or the sales personnel are not successful in obtaining new customers or increasing sales to our existing customer base, either directly or through advertising agencies that act on their behalf, our business will be adversely affected.

Economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition and results of operations.

        Our business depends on the overall demand for advertising and on the economic health of the national brands that are our current and prospective customers. Economic downturns or instability in political or market conditions may cause current or new customers to reduce their advertising budgets. Adverse economic conditions and general uncertainty about economic recovery are likely to affect our business prospects. Concern over such downturns or economic recovery could cause customers to delay, decrease or cancel purchases of our solution; and expose us to increased credit risk on customer orders, which, in turn, could negatively impact our business, financial condition and results of operations. In addition, concern over continued geopolitical turmoil in many parts of the world have and may continue to put pressure on global economic conditions, which could lead to reduced spending on advertising.

Failure to comply with industry self-regulation could harm our reputation and our business.

        We have committed to complying with the Network Advertising Initiative's Code of Conduct and the Digital Advertising Alliance's Self-Regulatory Principles for Online Behavioral Advertising in the United States, as well as similar self-regulatory principles in Europe adopted by the Interactive Advertising Bureau—Europe and the European Digital Advertising Alliance. If we make mistakes in the future, or our opt-out mechanisms fail to work as designed, or if Internet users misunderstand our technology or our commitments with respect to these principles, we may, as a result, be subject to negative publicity, government investigation, government or private litigation, or investigation by self-regulatory bodies or other accountability groups. Any such action against us could be costly and time consuming, require us to change our business practices, cause us to divert management's attention and our resources and be damaging to our reputation and our business.

Real or perceived errors or failures in our software and systems could adversely affect our operating results and growth prospects and could cause us reputational harm.

        We depend upon the sustained and uninterrupted performance of our technology platform to: operate over a thousand digital marketing campaigns at any given time; manage our inventory supply; bid on inventory for each campaign; serve or direct a third party to serve advertising; collect, process and interpret data; optimize campaign performance in real time and provide billing information to our financial systems. If our technology platform cannot scale to meet demand, or if there are errors in our execution of any of these functions on our platform, then our business may be harmed. Because our software is complex, undetected errors and failures may occur, especially when new versions or updates are made. We do not have the capability to test new releases or updates to our code on a small subset of digital marketing campaigns, which means that bugs or errors in code could impact all campaigns on our platform. Despite testing by us, errors or bugs in our software have in the past, and may in the future, not be found until the software is in our live operating environment. For example, we have experienced failures in our bidding system to recognize or respond to budget restrictions for digital marketing campaigns, resulting in overspending on media inventory, and we may in the future have failures in our systems that cause

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us to buy more media than our customers are contractually obligated to pay for, which could be costly and harm our operating results. Errors or failures in our software could also result in negative publicity, damage to our reputation, loss of or delay in market acceptance of our solution, increased costs or loss of revenue, loss of competitive position or claims by customers for losses sustained by them. In such an event, we may be required or choose to expend additional resources to help mitigate any problems resulting from errors in our software. We may make errors in the measurement of our digital marketing campaigns causing discrepancies with our customers' measurements leading to a lack in confidence in our technology platform. If measurement errors or discrepancies relate to marketing campaigns for which we have billed amounts to customers, we may have the need to provide the customer with "make-goods," or standard credits given to advertisers for campaigns that have not been delivered properly. Alleviating problems resulting from errors in our software could require significant expenditures of capital and other resources and could cause interruptions, delays or the cessation of our business, any of which would adversely impact our financial position, results of operations and growth prospects.

Our future success depends on the continuing efforts of our key employees, including our three founders, Joseph Epperson, Gretchen Joyce and Kurt Carlson, and on our ability to hire, retain and motivate additional key employees.

        Our future success depends heavily upon the continuing services of our key employees, including our three founders, Joseph Epperson, our president and chief executive officer, Gretchen Joyce, our chief operating officer, and Kurt Carlson, our chief technology officer, and on our ability to attract and retain members of our management team and other highly skilled employees, including software engineers, analytics and operations employees and sales professionals. The market for talent in our key areas of operations is intensely competitive. None of our founders or other key employees has an employment agreement for a specific term, and any of our employees may terminate his or her employment with us at any time.

        New employees often require significant training and, in many cases, take significant time to achieve full productivity. As a result, we may incur significant costs to attract and retain employees, including salaries, benefits and compensation expenses related to equity awards, and we may lose new employees to our competitors or other companies before we realize the benefit of our investment in recruiting and training them. Moreover, new employees may not become as productive as we expect, as we may face challenges in adequately or appropriately integrating them into our workforce and culture. In addition, as we move into new geographies, we will need to attract and recruit skilled employees in those areas. We have little experience with recruiting outside of the United States, and may face additional challenges in attracting, integrating and retaining international employees.

We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all, which may in turn hamper our growth and adversely affect our business.

        We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance our platform, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in additional public or private equity, equity-linked or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to

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obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business may be adversely affected.

Our corporate culture has contributed to our success, and if we cannot maintain it as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed.

        We are undergoing rapid growth. As of September 30, 2014, we had 286 employees in the United States and five employees in the United Kingdom, compared with 155 employees as of September 30, 2013, all of whom were based in the United States. We intend to further expand our overall headcount and operations both domestically and internationally, with no assurance that we will be able to do so while effectively maintaining our corporate culture. We believe our corporate culture has been a critical component of our success as we believe it fosters innovation, teamwork, passion for customers and focus on execution, while facilitating knowledge sharing across our organization. As we grow and change, we may find it difficult to preserve our corporate culture, which could reduce our ability to innovate and operate effectively. In turn, the failure to preserve our culture could negatively affect our ability to attract, recruit, integrate and retain employees, continue to perform at current levels and effectively execute our business strategy.

We rely on advertising agencies that act on behalf of our customers, and we incur the cost of a digital marketing campaign before we bill for our services. Potential delays in payment or non-payment could have an adverse effect on our results of operations and financial condition.

        A substantial majority of our revenue is sourced through advertising agencies, which act as agents for disclosed principals that are the advertisers. Typically, the advertising agency pays for our services once it has received payment from the advertiser for our services. However, we are obligated to pay for media inventory we have purchased from RTB exchanges before receiving such payments from the advertising agency. This delay in payment, which is typically more prolonged than the delay in payment we experience when we bill advertisers directly, could negatively impact our liquidity and financial condition. Contracting with these agencies could subject us to greater liquidity risk than when we contract with advertisers directly and to credit risk if an agency is unable to pay us once paid by the advertiser. These risks may vary depending on the nature of an advertising agency's aggregated advertiser base and the related timing of payment to the agency by our customer. There can be no assurance that we will not experience significant delays in payment in the future. Our agreements with advertising agencies typically provide that if the advertiser does not pay the agency, the agency is not liable to us and we must seek payment solely from the advertiser. Any such delays in payment to the agency by our customer and any failure by the advertiser to pay the agency or the agency to pay us could have a material adverse effect on our results of operations.

Because we generally bill our customers over the term of the agreement, near-term declines in new or renewed agreements generating revenue may not be reflected immediately in our operating results.

        Most of our revenue in each quarter is derived from agreements entered into with our customers during the previous three months. Consequently, a decline in new or renewed customer agreements in any one quarter may not be fully reflected in our revenue for that quarter. Such declines, however, would negatively affect our revenue in future periods and the effect of significant downturns in sales and market acceptance of our solution, and potential changes in our rate of

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renewals or renewal terms, may not be fully reflected in our results of operations until future periods. In addition, we may be unable to adjust our cost structure rapidly enough, or at all, to take account of reduced revenue. Our business model also makes it difficult for us to rapidly increase our total revenue through additional sales in any period, as revenue from new customers must be earned over the applicable agreement term based on the value of their monthly advertising spend.

Fluctuations in the exchange rates of foreign currencies could negatively impact our financial results.

        We expect international sales and operations to become an increasingly important part of our business. Such sales and operational expenses may be subject to unexpected regulatory requirements and other barriers. Any fluctuation in the exchange rates of these foreign currencies may negatively impact our business, financial condition and results of operations. We have not previously engaged in foreign currency hedging. If we decide to hedge our foreign currency exposure, we may not be able to hedge effectively due to lack of experience, unreasonable costs or illiquid markets. In addition, those activities may be limited in the protection they provide us from foreign currency fluctuations and can themselves result in losses.

Our proprietary rights may be difficult to enforce, which could enable others to copy or use aspects of our solution without compensating us, thereby eroding our competitive advantages and harming our business.

        Our success depends, in part, on our ability to protect proprietary methods and technologies that we develop under the intellectual property laws of the United States, so that we can prevent others from using our inventions and proprietary information. If we fail to protect our intellectual property rights adequately, our competitors might gain access to our technology, and our business might be adversely affected. We rely on trademark, copyright, trade secret and patent laws, confidentiality procedures and contractual provisions to protect our proprietary methods and technologies. Our patent strategy is still in its early stages and while we have a small number of pending patent applications, valid patents may not be issued from our pending applications, and the claims eventually allowed on any patents may not be sufficiently broad to protect our technology or offerings and services. Any issued patents may be challenged, invalidated or circumvented, and any rights granted under these patents may not actually provide adequate defensive protection or competitive advantages to us. Additionally, the process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Additional uncertainty may result from changes to intellectual property legislation enacted in the United States, including the recent America Invents Act, and other national governments and from interpretations of the intellectual property laws of the United States and other countries by applicable courts and agencies. Accordingly, despite our efforts, we may be unable to obtain adequate patent protection, or to prevent third parties from infringing upon or misappropriating our intellectual property.

        Unauthorized parties may attempt to copy aspects of our technology or obtain and use information that we regard as proprietary. We generally enter into confidentiality and/or license agreements with our employees, consultants, vendors and customers, and generally limit access to and distribution of our proprietary information. However, we cannot assure you that any steps taken by us will prevent misappropriation of our technology and proprietary information. Policing unauthorized use of our technology is difficult. In addition, the laws of some foreign countries may not be as protective of intellectual property rights as those of the United States, and mechanisms for enforcement of our proprietary rights in such countries may be inadequate. From time to time, legal action by us may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement. Such litigation could result in substantial costs and the diversion of limited

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resources and could negatively affect our business, operating results and financial condition. If we are unable to protect our proprietary rights (including aspects of our technology platform) we may find ourselves at a competitive disadvantage to others that have not incurred the same level of expense, time and effort to create and protect their intellectual property.

We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.

        Third parties may assert claims of infringement of intellectual property rights in proprietary technology against us or against our customers for which we may be liable or have an indemnification obligation. Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim, limit our ability to use certain technologies and could distract our management from our business.

        Although such third parties may offer a license to their technology, the terms of any offered license may not be acceptable and the failure to obtain a license or the costs associated with any license could cause our business, results of operations or financial condition to be materially and adversely affected. In addition, some licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. Alternatively, we may be required to develop non-infringing technology, which could require significant effort and expense and ultimately may not be successful. Furthermore, a successful claimant could secure a judgment or we may agree to a settlement that prevents us from providing certain solutions or services or that requires us to pay substantial damages, including treble damages if we are found to have willfully infringed such claimant's patents or copyrights, royalties or other fees. Any of these events could seriously harm our business, operating results and financial condition.

Our solution relies on third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to sell our solution or cause us to make generally available portions of our proprietary code.

        Our platform relies on software licensed to us by third-party authors under "open source" licenses. The use of open source software may entail greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar solutions with lower development effort and time and ultimately put us at a competitive disadvantage.

        Although we monitor our use of open source software to avoid subjecting our solution to conditions we do not intend, the terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our services. Moreover, we cannot guarantee that our processes for controlling our use of open source software will be effective. If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue operating our platform on terms that are not economically feasible, to re-engineer our platform or the supporting computational infrastructure to discontinue use of certain code, or to make generally available, in source code form, portions of our proprietary code, any of which could adversely affect our business, operating results and financial condition.

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Our growth depends, in part, on the success of our strategic relationships with third parties, including ready access to hardware in key locations to facilitate the delivery of our solution and reliable management of Internet traffic.

        We anticipate that we will continue to depend on various third-party relationships to grow our business. We continue to pursue additional relationships with third parties, such as technology and content providers, RTB exchanges, market research companies, co-location facilities and other strategic partners. Identifying, negotiating and documenting relationships with third parties requires significant time and resources as does integrating third-party data and services. Our agreements with providers of technology, data, computer hardware, co-location facilities and RTB exchanges are typically non-exclusive, do not prohibit them from working with our competitors or from offering competing services and do not typically have minimum purchase commitments. Our competitors may be effective in providing incentives to third parties to favor their products or services or to prevent or reduce purchases of our solution. In addition, these third parties may not perform as expected under our agreements with them, and we may have disagreements or disputes with such third parties, which could negatively affect our brand and reputation.

        In particular, our continued growth depends on our ability to source computer hardware, including servers built to our specifications, and the ability to locate those servers and related hardware in co-location facilities in the most desirable locations to facilitate the timely delivery of our services. Similarly, disruptions in the services provided at co-location facilities that we rely upon can degrade the level of services that we can provide, which may harm our business. We also rely on our integration with many third-party technology providers to execute our business on a daily basis. We must efficiently direct a large amount of network traffic to and from our servers to consider tens of billions of bid requests per day, and each bid typically must take place in approximately 100 milliseconds. We rely on a third-party domain name service, or DNS, to direct traffic to our closest data center for efficient processing. If our DNS provider experiences disruptions or performance problems, this could result in inefficient balancing of traffic across our servers as well as impair or prevent web browser connectivity to our site, which may harm our business.

Legal claims resulting from the actions of our customers could damage our reputation and be costly to defend.

        We do not independently verify whether the content of the advertisements we deliver is legally permitted. We receive representations from customers that the content of the advertising that we place on their behalf is lawful. We also rely on representations from our customers that they maintain adequate privacy policies that allow us to place cookies and other tracking mechanisms on their websites and collect data from users that visit those websites to aid in delivering our solution. If any of these representations are untrue and our customers do not abide by federal, state, local or foreign laws governing their content or privacy practices we may become subject to legal claims, we will be exposed to potential liability (for which we may or may not be indemnified), and our reputation may be damaged.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses.

        Our agreements with customers and other third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from our solution or other contractual obligations. The term of these indemnity provisions generally survives termination or expiration of the applicable agreement. Large indemnity payments could harm our business, operating results and financial condition.

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We may acquire other businesses, which could require significant management attention, disrupt our business, dilute stockholder value and adversely affect our results of operations.

        As part of our business strategy, we may make investments in or acquisitions of complementary companies, products or technologies. However, we have not made any acquisitions to date, and as a result, our ability as an organization to acquire and integrate other companies, products or technologies in a successful manner is unproven. We may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by our customers, the advertising agencies that represent them, and investors or could subject us to class action lawsuits that often follow public company acquisitions. In addition, if we are unsuccessful at integrating employees or technologies acquired, our revenue and results of operations could be adversely affected. Any integration process may require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or use the acquired technology or employees, or accurately forecast the financial impact of an acquisition transaction, including accounting charges. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition or the value of our common stock. The sale of equity or issuance of convertible debt to finance any such acquisitions could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations, could weaken our financial position and the agreements governing such indebtedness could include covenants or other restrictions that would impede our ability to manage our operations or pay dividends on our common stock.

If our assumptions or estimates relating to our critical accounting policies change or prove to be incorrect, our operating results could fall below the expectations of securities analysts and investors, resulting in a decline in our stock price.

        The preparation of financial statements in accordance with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in our stock price. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, stock-based compensation, accrued liabilities and income taxes.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations which could subject our business to higher tax liability.

        We may be limited in the portion of net operating loss carryforwards that we can use in the future to offset taxable income for U.S. federal and state income tax purposes. At December 31, 2013, we had U.S. federal net operating loss carryforwards, or NOLs, of approximately $15.4 million and state NOLs of $8.3 million. A lack of future taxable income would adversely affect our ability to utilize these NOLs. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an "ownership change" is subject to limitations on its ability to utilize its NOLs to offset future taxable income. We believe that we experienced an ownership change under Section 382 of the Code in prior years that may limit our

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ability to utilize a portion of the NOLs. In addition, future changes in our stock ownership, including this or future offerings, as well as other changes that may be outside of our control, could result in additional ownership changes under Section 382 of the Code. Our NOLs may also be impaired under similar provisions of state law. We have recorded a full valuation allowance related to our NOLs and other net deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets. Our NOLs may expire unutilized or underutilized, which could prevent us from offsetting future taxable income.

The forecasts of market growth included in this prospectus may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, we cannot assure you our business will grow at similar rates, if at all.

        Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates which may not prove to be accurate. The forecasts in this prospectus relating to the expected growth in the digital advertising market may prove to be inaccurate. For more information regarding the forecasts of market growth included in this prospectus, see the section entitled "Industry and Market Data."

We are subject to government regulations concerning our employees, including wage-hour laws and taxes.

        We are subject to applicable rules and regulations relating to our relationship with our employees, including health benefits, unemployment and similar taxes, overtime and working conditions, immigration status and classification of employee benefits for tax purposes. Legislated increases in additional labor cost components, such as employee benefit costs, workers' compensation insurance rates, compliance costs and fines, as well as the cost of litigation in connection with these regulations, would increase our labor costs. Moreover, we are subject to various laws and regulations in federal, state and foreign jurisdictions that impose varying rules and obligations on us with respect to the classification of employee benefits for income tax and other purposes and that require us to report and/or withhold in respect of such items. In addition, many employers nationally have been subject to actions brought by governmental agencies and private individuals under wage-hour laws on a variety of claims, such as improper classification of workers as exempt from overtime pay requirements and failure to pay overtime wages properly, with such actions sometimes brought as class actions, and these actions can result in material liabilities and expenses. Should we be subject to employment litigation, such as actions involving wage-hour, overtime, break and working time, it may distract our management from business matters and result in increased labor costs.

We may be subject to governmental export, import and sanctions requirements that could subject us to liability or impair our ability to compete in international markets.

        Our operations may be subject to U.S. export controls, including the Export Administration Regulations, or EAR, as well as economic sanctions enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control, or OFAC. To the extent that we export proprietary software that contains or is secured by encryption technology, the EAR may require us to meet various compliance responsibilities, including complying with encryption registration, classification requests, and export licensing requirements. Furthermore, EAR and OFAC compliance requirements prohibit the shipment of certain products and services to designated countries, entities and individuals targeted by U.S. sanctions. These EAR and OFAC obligations could impact our ability to pursue business opportunities outside the United States and subject us to liability for failure to meet applicable compliance requirements.

        In addition, various foreign countries regulate the import of certain encryption technology, including through import permit and license requirements, and have enacted laws that could limit

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our ability to deploy our technology or could limit our customers' ability to use our solution in those countries. Changes in our technology or in applicable import and export regulations may create delays in the introduction or deployment of our technology in international markets, prevent our customers with international operations from using our solution globally or, in some cases, prevent certain transactions with designated countries, entities or individuals. Such changes in applicable import, export and sanctions laws, including possible shifts in the manner in which respective governments enforce such requirements, could result in decreased use of our solution by, or in our decreased ability to export our technology to, international markets. Any decreased use of our solution or limitation on our ability to export our technology or to sell our solution would likely adversely affect our business, financial condition and results of operations.

Our tax liabilities may be greater than anticipated.

        The U.S. and non-U.S. tax laws applicable to our business activities are subject to interpretation. We are subject to audit by the Internal Revenue Service and by taxing authorities of the state, local and foreign jurisdictions in which we operate. Our tax obligations are based in part on our corporate operating structure, including the manner in which we develop, value, and use our intellectual property and sell our solution, the jurisdictions in which we operate, how tax authorities assess revenue-based taxes such as sales and use taxes, the scope of our international operations and the value we ascribe to our intercompany transactions. Taxing authorities may challenge our tax positions and methodologies for valuing developed technology or intercompany arrangements, as well as our positions regarding jurisdictions in which we are subject to certain taxes, which could expose us to additional taxes and increase our worldwide effective tax rate. Any adverse outcomes of such challenges to our tax positions could result in additional taxes for prior periods, interest, and penalties as well as higher future taxes. In addition, our future tax expense could increase as a result of changes in tax laws, regulations or accounting principles, or as a result of earning income in jurisdictions that have higher tax rates. An increase in our tax expense could have a negative effect on our financial position and results of operations. Moreover, the determination of our provision for income taxes and other tax liabilities requires significant estimates and judgment by management, and the tax treatment of certain transactions is uncertain. Although we believe we will make reasonable estimates and judgments, the ultimate outcome of any particular issue may differ from the amounts previously recorded in our financial statements and any such occurrence could materially affect our financial position and results of operations.

Risks Related to This Offering and Ownership of Our Common Stock

The price of our common stock may be volatile and the value of your investment could decline.

        Prior to this offering, there has been no public market for our common stock, and technology stocks have historically experienced high levels of volatility. The trading price of our common stock following this offering may fluctuate substantially. Following the completion of this offering, the market price of our common stock may be higher or lower than the price you pay in the offering, depending on many factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include the following:

    announcements of new offerings, products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;

    price and volume fluctuations in the overall stock market from time to time;

    significant volatility in the market price and trading volume of technology companies in general and of companies in the digital advertising industry in particular;

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    fluctuations in the trading volume of our shares or the size of our public float;

    actual or anticipated changes or fluctuations in our results of operations;

    whether our results of operations meet the expectations of securities analysts or investors or those expectations change;

    litigation involving us, our industry, or both;

    regulatory developments in the United States, foreign countries, or both;

    general economic conditions and trends;

    major catastrophic events;

    lock-up releases and sales of large blocks of our common stock;

    departures of key employees; or

    an adverse impact on the company from any of the other risks cited in this prospectus.

        In addition, if the market for technology stocks or the stock market, in general, experience a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been brought against that company. If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management's attention and resources from our business. This could have a material adverse effect on our business, results of operations and financial condition.

Sales of substantial amounts of our common stock in the public markets, including when the "lock-up" or "market standoff" period ends, or the perception that sales might occur, could reduce the price of our common stock and may dilute your voting power and your ownership interest in us.

        Sales of a substantial number of shares of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate. Based on the total number of outstanding shares of our common stock as of September 30, 2014, upon completion of this offering, we will have             shares of common stock outstanding. All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares held by our "affiliates" as defined in Rule 144 under the Securities Act.

        Subject to certain exceptions, we and all of our directors and officers and substantially all of our stockholders have agreed not to offer, sell or agree to sell, directly or indirectly, any shares of common stock without the permission of Goldman, Sachs & Co. for a period of 180 days from the date of this prospectus. When the lock-up period expires, we and our locked-up stockholders will be able to sell shares in the public market. In addition, the underwriters may, in their sole discretion, release all or some portion of the shares subject to lock-up agreements prior to the expiration of the lock-up period. See the section of this prospectus entitled "Shares Eligible for Future Sale" for more information. Sales of a substantial number of such shares upon expiration, or the perception that such sales may occur, or early release of the lock-up, could cause our share price to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.

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        Based on shares outstanding as of                          , holders of up to approximately             shares, or         %, of our common stock after this offering, will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the offer and sale of all shares of common stock that we may issue under our equity compensation plans.

        We may issue our shares of common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition, investments or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

Insiders will continue to have substantial control over us after this offering, which could limit your ability to influence the outcome of key transactions, including a change of control.

        Our directors, executive officers and each of our stockholders that own greater than 5% of our outstanding common stock, in the aggregate, will beneficially own approximately         % of the outstanding shares of our common stock after this offering, based on the number of shares outstanding as of                          . As a result, these stockholders will be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from yours and may vote in a manner that is adverse to your interests. This concentration of ownership may have the effect of deterring, delaying or preventing a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

We cannot assure you that a market will develop for our common stock or what the market price of our common stock will be.

        We cannot assure you that an active trading market for our common stock will develop or, if developed, that any market will be sustained. We cannot predict the prices at which our common stock will trade. The initial public offering price of our common stock has been determined by negotiations with the underwriters and may not bear any relationship to the market price at which our common stock will trade after this offering or to any other established criteria of the value of our business.

We have broad discretion in the use of net proceeds that we receive in this offering, and if we do not use those proceeds effectively, your investment could be harmed.

        The principal purposes of this offering are to create a public market for our common stock, obtain additional working capital and facilitate our future access to the public equity markets. We intend to use the net proceeds from this offering for general corporate purposes, including working capital, sales and marketing activities, engineering initiatives including enhancement of our solution, investment in technology and development and capital expenditures. We also may use a portion of the net proceeds from this offering to acquire or invest in technologies, solutions or businesses that complement our business, although we have no present commitments, and we have not allocated specific amounts of net proceeds, to complete any such transactions or plans. Accordingly, our management will have broad discretion in the application of the net proceeds to us from this offering. Investors in this offering will need to rely upon the judgment of our management regarding the application of the proceeds. If we do not use the net proceeds that we receive in this offering effectively, our business, results of operations and financial condition could be harmed.

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The requirements of being a public company may strain our resources, divert our management's attention and affect our ability to attract and retain qualified board members.

        As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and will be required to comply with the applicable requirements of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of the New York Stock Exchange and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management's attention may be diverted from other business concerns, which could harm our business and results of operations. Although we have already hired additional employees to comply with these requirements, we may need to hire even more employees in the future, which will increase our costs and expenses.

        We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements could be impaired.

        After the completion of this offering, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the stock exchange on which our common stock is listed. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting. Commencing with our fiscal year ending December 31, 2016, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K for that year, as required by Section 404 of the Sarbanes-Oxley Act. This will require that we incur substantial additional professional fees and internal costs to expand our accounting and finance functions and that we expend significant management efforts. Prior to this offering, we have never been required to test our internal controls within a specified period, and, as a result, we may experience difficulty in producing accurate financial statements.

        We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. In addition, our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

        If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements. If that were to happen, the market

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price of our stock could decline and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the Securities and Exchange Commission, or SEC, or other regulatory authorities.

We are an "emerging growth company," and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

        For so long as we remain an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not "emerging growth companies," including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions for so long as we are an "emerging growth company," which could be as long as five years following the completion of this offering. Investors may find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline.

        In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of an extended transition period for complying with new or revised accounting standards. However, we chose to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Because the initial public offering price of our common stock will be substantially higher than the pro forma as adjusted net tangible book value per share of our outstanding common stock following this offering, new investors will experience immediate and substantial dilution.

        The initial public offering price of our common stock is substantially higher than the pro forma as adjusted net tangible book value per share of our common stock immediately following this offering based on the total value of our tangible assets less our total liabilities. Therefore, if you purchase shares of our common stock in this offering, you will experience immediate dilution of $       per share, the difference between the assumed initial public offering price of $       per share, which is the midpoint of the range as set forth on the cover page of this prospectus, after deducting the underwriting discount and commissions and estimated offering expenses payable by us, and the pro forma as adjusted net tangible book value per share of our common stock as of                  , 2014, immediately after this offering. See the section entitled "Dilution."

If securities or industry analysts do not publish research or reports about our business, or publish unfavorable research reports about our business, our share price and trading volume could decline.

        The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us publishes unfavorable commentary about us or changes their opinion of our business prospects, our share price would likely decline. If one or more of these analysts ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

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We do not intend to pay dividends for the foreseeable future and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

        We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases. In addition, each of our mezzanine loan and security agreement and our loan and security agreement, which we refer to as our credit facility agreements, contain restrictions on our ability to pay dividends.

Our credit facility agreements contain covenants that may restrict our business and financing activities.

        Borrowings under our credit facility agreements are secured by substantially all of our assets. Our credit facility agreements also restrict our ability to, among other things:

    dispose of or sell assets;

    make material changes in our business or management;

    consolidate or merge with or acquire other entities;

    incur additional indebtedness;

    incur liens on our assets;

    pay dividends or make distributions on our capital stock;

    make certain investments;

    enter into transactions with our affiliates; and

    make any payment in respect of any subordinated indebtedness.

        These restrictions are subject to certain exceptions. In addition, our loan and security agreement requires us to maintain a minimum liquidity threshold, among other things.

        The covenants in our credit facility agreements, as well as any future financing agreements that we may enter into, may restrict our ability to finance our operations, engage in, expand or otherwise pursue our business activities and strategies. Our ability to comply with these covenants may be affected by events beyond our control, and future breaches of any of these covenants could result in a default under our credit facility agreements. If not waived, future defaults could cause all of the outstanding indebtedness under our credit facility agreements to become immediately due and payable and terminate all commitments to extend further credit.

        If we do not have or are unable to generate sufficient cash available to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all, which may negatively impact our ability to operate our business.

Our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment.

        Our amended and restated certificate of incorporation and amended and restated bylaws that will be in effect upon completion of this offering contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to

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elect directors that are not nominated by the current members of our board of directors or take other corporate actions, including effecting changes in our management. These provisions include:

    a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;

    the ability of our board of directors to issue shares of convertible preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;

    the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

    a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

    the requirement that a special meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

    the requirement for the affirmative vote of holders of at least         % of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; and

    advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own slate of directors or otherwise attempting to obtain control of us.

        In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections titled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," but are also contained elsewhere in this prospectus. Forward-looking statements include information concerning our possible or assumed future results of operations and expenses, business strategies and plans, market sizing, competitive position, industry environment and potential growth opportunities. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "seeks," "should," "will," "would" or similar expressions and the negatives of those terms.

        Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those described in "Risk Factors" and elsewhere in this prospectus. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our beliefs and assumptions only as of the date of this prospectus. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. You should read this prospectus and the documents that we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

        Some of the key factors that could cause actual results to differ from our expectations include:

    our limited operating history, which makes it difficult to evaluate our current business and future prospects;

    our ability to achieve or sustain profitability;

    our ability to attract new customers or increase the allocation of our existing customers' marketing spend to us;

    our ability to develop new products and services or enhance our existing products and services;

    the effects of increased competition in our market and our ability to compete effectively;

    our ability to comply with, and the effect on our business of, evolving legal standards and regulations, particularly concerning privacy and data protection;

    the seasonality of our business;

    our dependence on the continued growth of the digital advertising market;

    our ability to maintain a supply of media inventory or impressions;

    our ability to retain key employees and attract additional key employees;

    our ability to maintain effective internal controls; and

    our recognition of revenue from customer subscriptions over the term of the customer agreements.

        Any forward-looking statement made by us in this prospectus speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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INDUSTRY AND MARKET DATA

        We obtained the industry, market and competitive position data used throughout this prospectus from our own internal estimates and research, industry and general publications and research, surveys and studies conducted by third parties. This information involves a number of assumptions and limitations, and while we believe that each source is reliable as of its respective date. Internal estimates are derived from publicly-available information released by industry analysts and third-party sources, our internal research and our industry experience, and are based on assumptions made by us based on such data and our knowledge of our industry and market, which we believe to be reasonable. In addition, while we believe the industry, market and competitive position data included in this prospectus is reliable and is based on reasonable assumptions, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed in "Risk Factors." These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

        Certain information in the text of this prospectus is contained in independent industry publications. The source of each of these independent industry publications is provided below:

    Advertising Age, 100 Leading National Advertisers 2014, June 2014.

    Advertising Age, Agency Report, April 2014.

    BIA/Kelsey, 2015 U.S. Local Media Forecast: Full Edition, September 2014.

    eMarketer Inc., U.S. Time Spent with Media: eMarketer's Updated Estimates for 2014, October 2014.

    Euromonitor International, Retailing 2015: Euromonitor from trade sources/national statistics, January 2015.

    Planet Retail, USA—Outlets Analysis 2013-2019, June 2014.

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USE OF PROCEEDS

        We estimate that the net proceeds we receive from this offering will be approximately $          million based on the assumed initial public offering price of $         per share, which is the midpoint of the range included on the cover page of this prospectus, after deducting the underwriting discount and commissions and estimated offering expenses payable by us. If the underwriters' option to purchase additional shares in this offering from us is exercised in full, our estimated net proceeds will be approximately $          million after deducting the underwriting discount and commissions and estimated offering expenses payable by us.

        A $1.00 increase or decrease in the assumed initial public offering price of $         per share would increase or decrease the net proceeds we receive from this offering by approximately $          million, assuming the number of shares offered by us as set forth on the cover page of this prospectus remains the same and after deducting the underwriting discount and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of         shares offered by us would increase or decrease the net proceeds we receive from this offering by approximately $          million, assuming the assumed public offering price remains the same and after deducting the underwriting discount and commissions and estimated offering expenses payable by us.

        The principal purposes of this offering are to create a public market for our common stock, obtain additional working capital and facilitate our future access to the public equity markets. Our management will have broad discretion in the application of the net proceeds to us from this offering, and investors will be relying on the judgment of our management regarding the application of the proceeds.

        We intend to use the net proceeds from this offering for general corporate purposes, including working capital, sales and marketing activities, engineering initiatives including enhancement of our solution, investment in technology and development and capital expenditures. We also may use a portion of the net proceeds from this offering to acquire or invest in technologies, solutions or businesses that complement our business, although we have no present commitments, and we have not allocated specific amounts of net proceeds, to complete any such transactions or plans. Pending their use, we plan to invest our net proceeds from this offering in short-term, interest-bearing, investment-grade securities.


DIVIDEND POLICY

        We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant. Additionally, our ability to pay dividends on our common stock is limited by the terms of our credit facility agreements.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2014:

    on an actual basis;

    on a pro forma basis to give effect to (i) the automatic conversion of all outstanding shares of our convertible preferred stock into an aggregate of 29,697,650 shares of our common stock and (ii) the amendment and restatement of our certificate of incorporation in connection with this offering; and

    on a pro forma as adjusted basis to give effect to the issuance and sale by us of             shares of common stock in this offering, and the receipt of the net proceeds from our sale of these shares at an assumed initial public offering price of the common stock of $             per share, the midpoint of the price range on the cover page of this prospectus, after deducting the underwriting discount and commissions and estimated offering expenses payable by us.

        The information below is illustrative only, and cash and cash equivalents, additional paid-in capital, total stockholders' (deficit) equity and total capitalization following the completion of this offering will change based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and

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"Description of Capital Stock" and our financial statements and related notes included elsewhere in this prospectus.

 
  As of September 30, 2014  
 
  Actual   Pro Forma   Pro Forma
As Adjusted(1)
 
 
  (in thousands, except share data)
 

Cash and cash equivalents

  $ 12,480   $ 12,480        
               
               

Convertible preferred stock:

                   

Convertible Series A preferred stock, $0.00005 par value; 4,973,014 shares authorized, 4,767,492 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted                                

    1,387     —          

Convertible Series B preferred stock, $0.00005 par value; 7,298,736 shares authorized, 7,298,736 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted                                

    3,089     —          

Convertible Series C preferred stock, $0.00005 par value; 10,813,002 shares authorized, 10,813,002 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted

    8,000     —          

Convertible Series D preferred stock, $0.00005 par value; 6,818,500 shares authorized, 6,818,420 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted                                

    13,000     —          
               

Total convertible preferred stock

    25,476            
               
               

Stockholders' (deficit) equity:

                   

Common stock, $0.00005 par value; 44,000,000 shares authorized 7,991,423 shares issued and outstanding, actual; 44,000,000 shares authorized, 37,689,073 shares issued and outstanding, pro forma,             shares issued and outstanding, pro forma as adjusted

    —       2        

Additional paid-in capital

    3,962     29,436        

Accumulated other comprehensive loss

    (25 )   (25 )      

Accumulated deficit

    (27,356 )   (27,356 )      
               

Total stockholders' (deficit) equity

    (23,419 )   2,057        
               
               

Total capitalization

  $ 2,057   $ 2,057        
               
               

(1)
A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders' (deficit) equity and total capitalization by $              million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discount and commissions and estimated offering expenses payable by us. If the underwriters' option to purchase additional shares to cover over-allotments is exercised in full, the pro forma as adjusted amount of cash and cash equivalents, additional paid-in capital, total stockholders' (deficit) equity and total capitalization would increase by approximately $              million, after deducting the underwriting discount and commissions, and we would have             shares of our common stock issued and outstanding, pro forma as adjusted. An increase (decrease) of             shares offered by us would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders' (deficit) equity and total capitalization by $              million, assuming the assumed public offering price remains the same and after deducting the underwriting discount and commissions and estimated offering expenses payable by us.

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        The table above excludes the following shares:

    6,695,951 shares of common stock issuable upon the exercise of options outstanding as of September 30, 2014 under our 2010 Equity Incentive Plan, with a weighted average exercise price of $3.23 per share;

    990,850 shares of common stock issuable upon the exercise of options granted after September 30, 2014 under our 2010 Equity Incentive Plan, with a weighted average exercise price of $7.27 per share;

    200,000 shares of common stock issuable upon the exercise of lender warrants outstanding as of September 30, 2014 with an exercise price of $5.68 per share;

    100,000 shares of common stock issuable upon the exercise of lender warrants outstanding issued after September 30, 2014 with an exercise price of $5.68 per share; and

                 shares of our common stock reserved for future issuance under our equity compensation plans, consisting of 974,894 shares of our common stock that were reserved for issuance under our 2010 Equity Incentive Plan as of September 30, 2014, and             shares of our common stock reserved for issuance under our 2015 Equity Incentive Plan. On the date immediately prior to the date of this prospectus, any remaining shares available for issuance under our 2010 Equity Incentive Plan were added to the shares reserved under our 2015 Equity Incentive Plan and we ceased granting awards under the 2010 Equity Incentive Plan. Our 2015 Equity Incentive Plan also provides for automatic annual increases in the number of shares reserved thereunder, as more fully described in "Executive Compensation—Equity Plans."

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DILUTION

        If you invest in our common stock, your interest will be diluted to the extent of the difference between the offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

        Our pro forma net tangible book value (deficit) as of September 30, 2014 was $(0.7) million, or $(0.02) per share of common stock. Our pro forma net tangible book value (deficit) per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the total number of shares of our common stock outstanding as of September 30, 2014, after giving effect to the automatic conversion of all outstanding shares of our convertible preferred stock into common stock in connection with this offering.

        After giving effect to our sale in this offering of             shares of common stock at an assumed initial public offering price of the common stock of $             per share, the midpoint of the price range on the cover page of this prospectus, after deducting the underwriting discount and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2014 would have been approximately $              million, or $             per share of common stock. This represents an immediate increase in pro forma as adjusted net tangible book value of $             per share to our existing stockholders and an immediate dilution of $             per share to investors purchasing shares in this offering.

        The following table illustrates this per share dilution.

Assumed initial offering price per share

        $    

Pro forma net tangible book value (deficit) per share as of September 30, 2014

  $ (0.02 )      

Increase in pro forma net tangible book value per share attributable to investors purchasing shares in this offering

             
             

Pro forma as adjusted net tangible book value per share after this offering

             
             

Dilution in pro forma net tangible book value per share to investors in this offering

        $    
             
             

        A $1.00 increase (decrease) in the assumed offering price of $             per share would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $             , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discount and commissions and estimated offering expenses payable by us. Similarly, an increase (decrease) of             shares offered by us would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $             , assuming that the assumed public offering price remains the same and after deducting the underwriting discount and commissions and estimated offering expenses payable by us.

        If the underwriters exercise their over-allotment option in full, the pro forma net tangible book value per share after giving effect to this offering would be approximately $             per share, and the dilution in pro forma net tangible book value per share to investors in this offering would be approximately $             per share.

        The following table summarizes, as of September 30, 2014, the differences between the number of outstanding shares of our common stock purchased from us, after giving effect to the conversion of our convertible preferred stock into common stock, the total cash consideration paid and the average price per share (i) paid by our existing stockholders and (ii) to be paid by our new investors purchasing shares in this offering at the assumed offering price of the common stock of $             per share, the midpoint of the price range on the cover page of this prospectus, after

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deducting the underwriting discount and commissions and estimated offering expenses payable by us:  

 
  Shares Purchased   Total Consideration    
 
 
  Average
Price Per
Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

              $                       $                

New investors

                               
                         

Total

                      100 % $                   100 %                  
                         
                         

        A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) total consideration paid by new investors by $              million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discount and commissions payable by us. Similarly, an increase (decrease) of             shares offered by us would increase (decrease) total consideration paid by new investors by $              million, assuming that the assumed public offering price remains the same and after deducting the underwriter discount and commissions and estimated offering expenses payable by us.

        If the underwriters exercise their over-allotment option in full, our existing stockholders would own         % and our new investors would own         % of the total number of shares of our common stock outstanding after this offering.

        The table and discussions above are based on 37,689,073 shares of our common stock outstanding as of September 30, 2014, and exclude:

    6,695,951 shares of common stock issuable upon the exercise of options outstanding as of September 30, 2014 under our 2010 Equity Incentive Plan, with a weighted average exercise price of $3.23 per share;

    990,850 shares of common stock issuable upon the exercise of options granted after September 30, 2014 under our 2010 Equity Incentive Plan, with a weighted average exercise price of $7.27 per share;

    200,000 shares of common stock issuable upon the exercise of lender warrants outstanding as of September 30, 2014 with an exercise price of $5.68 per share;

    100,000 shares of common stock issuable upon the exercise of lender warrants outstanding issued after September 30, 2014 with an exercise price of $5.68 per share; and

                 shares of our common stock reserved for future issuance under our equity compensation plans, consisting of 974,894 shares of our common stock that were reserved for issuance under our 2010 Equity Incentive Plan as of September 30, 2014, and             shares of our common stock reserved for issuance under our 2015 Equity Incentive Plan. On the date immediately prior to the date of this prospectus, any remaining shares available for issuance under our 2010 Equity Incentive Plan were added to the shares reserved under our 2015 Equity Incentive Plan and we ceased granting awards under the 2010 Equity Incentive Plan. Our 2015 Equity Incentive Plan also provides for automatic annual increases in the number of shares reserved thereunder, as more fully described in "Executive Compensation—Equity Plans."

        To the extent that any outstanding options are exercised, new investors will experience further dilution.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following tables set forth our selected consolidated financial data. The following selected consolidated statements of operations data for the years ended December 31, 2011, 2012 and 2013 and the selected consolidated balance sheet data as of December 31, 2012 and 2013 are derived from our audited consolidated financial statements appearing elsewhere in this prospectus. The selected consolidated balance sheet data as of December 31, 2011 is derived from audited financial statements not included in this prospectus. The data should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in conjunction with the consolidated financial statements, related notes and other financial information included elsewhere in this prospectus. The selected consolidated statements of operations data for the nine months ended September 30, 2013 and 2014 and the selected consolidated balance sheet data as of September 30, 2014 are derived from unaudited condensed consolidated financial statements appearing elsewhere in this prospectus.

        The unaudited condensed consolidated financial data includes all adjustments, consisting of normal recurring adjustments, which management considers necessary for a fair presentation of our financial position and results of operations for these periods. Our historical results are not necessarily indicative of the results to be expected in the future, and our operating results for the nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

 
  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands, except share and per share data)
 

Consolidated Statements of Operations Data:

                               

Revenue

  $ 14,679   $ 35,072   $ 66,068   $ 41,817   $ 67,864  

Traffic acquisition costs

    7,762     16,485     27,712     17,160     27,552  

Other cost of revenue

    1,295     2,982     3,904     2,721     5,360  
                       

Gross profit

    5,622     15,605     34,452     21,936     34,952  

Operating expenses:

   
 
   
 
   
 
   
 
   
 
 

Sales and marketing

    6,325     12,938     20,475     13,771     26,905  

Research and development

    2,555     5,376     8,666     6,014     10,102  

General and administrative

    2,117     4,043     5,217     3,342     8,440  
                       

Total operating expenses

    10,997     22,357     34,358     23,127     45,447  

(Loss) income from operations

    (5,375 )   (6,752 )   94     (1,191 )   (10,495 )

Other expense (income):

                               

Interest expense

    88     27     283     187     1,005  

Other expense (income)

    31     (19 )   (2 )   (2 )   (2 )  
                       

Total other expense (income)

    119     8     281     185     1,003  

Loss before income taxes

    (5,494 )   (6,760 )   (187 )   (1,376 )   (11,498 )

Provision for income taxes

    —       —       —       —       —    
                       

Net loss

  $ (5,494 ) $ (6,760 ) $ (187 ) $ (1,376 ) $ (11,498 )
                       
                       

Net loss per share of common stock—basic and diluted

  $ (1.11 ) $ (1.07 ) $ (0.03 ) $ (0.19 ) $ (1.49 )
                       
                       

Pro forma net loss per share of common stock—basic and diluted(1):

              $ (0.01 )       $ (0.31 )
                             
                             

Weighted average shares of common stock used in computing net loss per share—basic and diluted

   
4,965,155
   
6,340,942
   
7,417,068
   
7,398,718
   
7,737,968
 
                       
                       

Weighted average shares of common stock used in computing pro forma net loss per share—basic and diluted(1):

                37,114,718           37,435,618  
                             
                             

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  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands)
 

Stock-based compensation expense included above:

                               

Other cost of revenue

  $ 1   $ 2   $ 6   $ 4   $ 11  

Sales and marketing

    32     137     212     152     331  

Research and development

    21     155     276     188     461  

General and administrative

    230     259     85     64     651  

Other financial data:

   
 
   
 
   
 
   
 
   
 
 

Revenue ex-TAC(2)

  $ 6,917   $ 18,587   $ 38,356   $ 24,657   $ 40,312  

Adjusted EBITDA(3)

  $ (4,648 ) $ (5,116 ) $ 2,631   $ 621   $ (6,859 )

(1)
Pro forma basic and diluted net loss per share have been calculated assuming the conversion of all outstanding shares of convertible preferred stock into 29,697,650 shares of common stock as of the beginning of the applicable period or at the time of issuance, if later.
(2)
We define Revenue ex-TAC as revenue less traffic acquisition costs. See "—Non-GAAP Financial Measures" for more information as to the limitations of using non-GAAP financial measures and for the reconciliation of Revenue ex-TAC to revenue, the most directly comparable financial measure calculated in accordance with GAAP.
(3)
We define Adjusted EBITDA as net loss before income taxes, interest expense, depreciation and amortization, stock-based compensation and change in fair value of convertible preferred stock warrant liability. See "—Non-GAAP Financial Measures" for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated in accordance with GAAP.

 
  As of December 31,    
 
 
  As of
September 30,
2014
 
 
  2011   2012   2013  
 
  (in thousands)
 

Consolidated Balance Sheet Data:

                         

Cash and cash equivalents

  $ 17,105   $ 9,831   $ 8,805   $ 12,480  

Accounts receivable, net

    4,603     15,028     24,233     29,443  

Restricted cash

    1,000     2,000     3,500      

Working capital

    18,001     16,431     20,611     22,586  

Total assets

    25,222     31,082     42,750     54,702  

Long-term debt, net

    3,700     10,718     17,761     30,862  

Total liabilities

    7,717     19,689     30,886     52,645  

Total convertible preferred stock

    25,475     25,476     25,476     25,476  

Total stockholders (deficit)

    (7,970 )   (14,083 )   (13,612 )   (23,419 )

Non-GAAP Financial Measures

Revenue ex-TAC

        Revenue ex-TAC is a non-GAAP financial measure defined by us as revenue less traffic acquisition costs. Traffic acquisition costs consist of purchases of advertising impressions from RTB exchanges on a cost per thousand impression basis. We believe that Revenue ex-TAC is a meaningful measure of operating performance because it is frequently used for internal management purposes, indicates the effectiveness of delivering results to advertisers and facilitates a more complete period-to-period understanding of factors and trends affecting our underlying revenue performance. A limitation of Revenue ex-TAC is that it is a measure that other companies, including companies in our industry that have similar business arrangements, either may not use or may calculate differently, which reduces its usefulness as a comparative measure. Because of these and other limitations, we consider, and you should consider, Revenue ex-TAC alongside other GAAP financial measures, such as revenue, gross profit and total operating expenses. The following table presents a reconciliation of Revenue ex-TAC to revenue for each of the periods indicated:

 
  Year Ended December 31,   Nine Months
Ended
September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands)
 

Revenue

  $ 14,679   $ 35,072   $ 66,068   $ 41,817   $ 67,864  

Less: traffic acquisition costs

    (7,762 )   (16,485 )   (27,712 )   (17,160 )   (27,552 )
                       

Revenue ex-TAC

  $ 6,917   $ 18,587   $ 38,356   $ 24,657   $ 40,312  
                       
                       

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Adjusted EBITDA

        To provide investors with additional information regarding our financial results, we have provided within this prospectus Adjusted EBITDA, a non-GAAP financial measure. We define Adjusted EBITDA as net loss before income taxes, interest expense and depreciation and amortization, adjusted to eliminate stock-based compensation expense and change in fair value of convertible preferred stock warrant liability. We have provided a reconciliation below of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.

        We have included Adjusted EBITDA in this prospectus because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operating plans. In particular, we believe the exclusion of certain items in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors in understanding and evaluating our operating results.

        Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

    Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

    Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;

    Adjusted EBITDA does not reflect interest or tax payments that may represent a reduction in cash available to us; and

    other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

        Because of these and other limitations, we consider, and you should consider, Adjusted EBITDA together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and our other GAAP results. The following table presents a reconciliation of net loss to Adjusted EBITDA for each of the periods indicated:

 
  Year Ended December 31,   Nine Months
Ended
September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands)
 

Net loss

  $ (5,494 ) $ (6,760 ) $ (187 ) $ (1,376 ) $ (11,498 )

Adjustments:

                               

Interest expense

    88     27     283     187     1,005  

Provision for income taxes

    —       —       —       —       —    

Depreciation and amortization

    443     1,063     1,956     1,402     2,180  

Stock-based compensation

    284     553     579     408     1,454  

Change in fair value of warrant to purchase Series A convertible preferred stock

    31     1     —       —       —    
                       

Adjusted EBITDA

  $ (4,648 ) $ (5,116 ) $ 2,631   $ 621   $ (6,859 )
                       
                       

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

        You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

        We provide a leading business intelligence and marketing automation software service, which we refer to as our solution, that enables national brands to drive local, in-store sales. National brands use our MaxPoint Intelligence Platform to predict the most likely local buyers of a specific product at a particular retail location and then execute cross-channel digital marketing campaigns to reach these buyers. Business intelligence is at the core of our solution, which leverages high-velocity data processing and proprietary statistical models to continuously analyze more than 10 billion daily data attributes to delineate consumers' real-time purchase intent. By identifying and reaching only the most likely local buyers with digital customized product offers for local stores, national brands can more efficiently and effectively run local marketing campaigns, thereby increasing in-store sales and reducing wasted marketing spend associated with traditional approaches. We provide a technology-driven alternative to traditional local marketing methods for national brands across a number of industries where transactions take place predominantly offline, such as consumer products, retail, automotive, healthcare, telecommunications and entertainment.

        We operate in one segment and generate revenue by delivering local, targeted digital marketing campaigns for customers through various channels, including display, mobile, social and video. We define "local," in terms of both retail locations and buyers or consumers, as the close proximity of a targeted consumer to a targeted retail location, typically within a specific Digital Zip. Historically, our revenue has predominantly come from display advertising because it was the first to be made available for programmatic purchasing through real-time bidding, or RTB, exchanges. The digital advertising industry is rapidly adopting programmatic purchasing for display, mobile, social and video advertising and accelerating the amount and variety of digital media inventory available through RTB exchanges. As we continue to expand in the mobile, social and video channels, we must continue to utilize our platform to effectively provide targeted campaigns in an efficient manner through a combination of pricing with our customers and by managing the costs associated with RTB exchanges. Any significant shift in the mix of channels used to provide our marketing automation software solution to our customers could have a favorable or unfavorable impact on our revenues, Revenue ex-TAC and gross profit.

        Through marketing automation and direct integrations with RTB exchanges, our platform delivers customized digital advertisements containing product and store specific promotions to local consumers across display, mobile, social and video channels. National brands can then measure the offline sales impact of those digital marketing campaigns to optimize future campaigns and budgets and manage in-store supply levels. Our customers typically pay us on a cost per thousand impressions, or CPM, model based on the number of impressions we deliver through our platform for each marketing campaign.

        Our diverse customer base consists primarily of enterprises with national brands in the consumer products, retail, automotive, healthcare, telecommunications and entertainment industries. We sell our solution either directly to our customers or through advertising agencies that act on  

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behalf of our customers. We have worked with each of the top 20 leading national advertisers and each of the top 10 advertising agencies in the United States as ranked in 2014 by Advertising Age. As of September 30, 2014, we had 431 enterprise customers as described in "—Key Financial and Operating Performance Metrics." Our customer agreements typically have terms of less than three months and are cancellable at any time, and we recognize revenue as we deliver advertising impressions, subject to satisfying all other revenue recognition criteria. Our revenue recognition policies are discussed in more detail under "—Critical Accounting Policies and Significant Judgments and Estimates."

        Since our inception in 2006, we have focused on developing our solutions to address the challenges that national brands experience with local marketing. During our early years, we focused largely on product development, which resulted in the introduction of our MaxPoint Intelligence Platform in 2011 as a service primarily run by us on behalf of our customers. Since 2013, our customers have also had the ability to directly interface with the MaxPoint Intelligence Platform software service. We have grown our revenue from $14.7 million for the year ended December 31, 2011 to $66.1 million for the year ended December 31, 2013, representing a compounded annual growth rate, or CAGR, of 112%. Our revenue increased from $41.8 million for the nine months ended September 30, 2013 to $67.9 million for the nine months ended September 30, 2014, representing an increase of 62%. To date, substantially all of our revenue has come from sales in the United States.

        Our goal is to be the leading strategic partner assisting national brands in driving local, in-store sales. The core elements of our growth strategy include increasing our share of existing customer spend, acquiring new customers, further penetrating new industries, continuing to innovate and invest in our technology, and expanding internationally. To accomplish our goal, we plan to invest for long-term growth. We anticipate that our operating expenses will increase in the foreseeable future as we execute the core elements of our growth strategy. While these investments will likely reduce our profitability in the near term, we believe they will contribute to our long-term growth.

        We face a variety of challenges and risks, which we will need to address and manage as we pursue our growth strategy. In particular, if we are to remain competitive, we will need to continue to innovate in the face of a rapidly changing advertising landscape and need to effectively manage our growth. Our senior management continuously focuses on these and other challenges, and we believe that our culture of innovation and our history of expansive growth will contribute to the success of our business. We cannot, however, assure you that we will be successful in addressing and managing the many challenges and risks that we face.

Key Financial and Operating Performance Metrics

        We regularly monitor a number of financial and operating metrics in order to measure our performance and project our future performance. The following metrics aid us in developing and refining our growth strategies and making strategic decisions:

 
  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands, except number of enterprise customers)
 

Revenue

  $ 14,679   $ 35,072   $ 66,068   $ 41,817   $ 67,864  

Revenue ex-TAC

  $ 6,917   $ 18,587   $ 38,356   $ 24,657   $ 40,312  

Adjusted EBITDA

  $ (4,648 ) $ (5,116 ) $ 2,631   $ 621   $ (6,859 )

Number of enterprise customers

    106     225     304     292     431  

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Revenue ex-TAC

        Revenue ex-TAC is a non-GAAP financial measure defined by us as revenue less traffic acquisition costs. Traffic acquisition costs consist of purchases of advertising impressions from RTB exchanges on a CPM basis. We believe that revenue ex-TAC is a meaningful measure of operating performance because it is frequently used for internal management purposes, indicates the effectiveness of delivering results to advertisers and facilitates a more complete period-to-period understanding of factors and trends affecting our underlying revenue performance. The metric combines the important factors of our ability to sustain pricing with our customers, purchase inventory at reasonable and expected prices, and to scale our business. Please see "Selected Consolidated Financial Data—Non-GAAP Financial Measures" for more information as to the limitations of using non-GAAP financial measures and for a reconciliation of Revenue ex-TAC to revenue, the most directly comparable financial measure calculated in accordance with GAAP.

Adjusted EBITDA

        Adjusted EBITDA represents our net loss before income taxes, interest expense and depreciation and amortization, adjusted to eliminate stock-based compensation expense and change in fair value of convertible preferred stock warrant liability. We have presented Adjusted EBITDA in this prospectus because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operating plans. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results. Please see "Selected Consolidated Financial Data—Non-GAAP Financial Measures" for information regarding the limitations of using Adjusted EBITDA as a financial measure and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated in accordance with GAAP.

Number of Enterprise Customers

        We believe our ability to increase the revenue we generate from existing customers and attract new customers is an important component of our growth strategy. We also believe that those customers from which we have generated more than $10,000 of revenue during any trailing twelve-month period best identifies customers that are actively using our solution and contribute more meaningfully to revenue. We refer to these customers as our enterprise customers. Our ability to generate additional revenue from our enterprise customers is an important indicator of our ability to grow revenue over time. As of December 31, 2011, 2012 and 2013 and September 30, 2014, customers from which we have generated less than $10,000 of revenue during the previous trailing twelve-month period have accounted for less than 2% of our revenue.

        In those cases where we work with multiple brands or divisions within the same company or where the company runs marketing campaigns in multiple geographies, even though multiple insertion orders may be involved, we count that company as a single customer. When the insertion order is with an advertising agency, we consider the company on behalf of which the marketing campaign is conducted as our enterprise customer. If a company has its marketing spend with us managed by multiple advertising agencies, that company is counted as a single enterprise customer.

        While the number of our enterprise customers has increased over time, this number can also fluctuate from quarter to quarter due to the seasonal trends in the advertising spend of our enterprise and other customers, which can impact the timing and amount of revenue we generate from them. Therefore, there is not necessarily a direct correlation between a change in the number

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of enterprise customers for a particular period and an increase or decrease in our revenue during that period.

Key Factors Affecting Our Performance

Increasing Share of Spend from Existing Customers

        While we have a significant customer base, we believe our ability to retain and capture an increasing share of our existing customers' marketing budgets is a key indicator of our market penetration, growth and future revenue. We intend to expand our footprint with our existing advertiser customers by working with a larger number of their national brands and by growing the number of geographies, regions and individual stores for which they use our software solution. We also plan to invest in our sales organization to deepen and strengthen our relationship with existing customers. Enterprise customers who began working with us in 2011 spent 48% more with us in 2012 and an additional 68% in 2013, and enterprise customers who began working with us in 2012 spent an additional 32% with us in 2013. As an additional example of the growth of acceptance of our product, the performance of our top 25 customers for each of 2011, 2012 and 2013 is as follows:

 
  2011   2012   2013  

Revenue from top 25 customers (in millions)

  $ 11.0   $ 18.3   $ 36.4  

Percent of total revenue from top 25 customers

    75%     52%     55%  

Revenue per top 25 customer (in thousands)

  $ 439   $ 734   $ 1,457  

Total campaigns for top 25 customers

    415     928     2,104  

Campaigns per top 25 customer

    17     37     84  

Acquiring New Customers

        Our growth in our customer base is also an important element of our growth strategy. Our goal is to attract new customers by growing market awareness of our solution. We believe that we are well positioned for future growth and that we have an opportunity to continue expanding our customer base in the coming years, and we plan to invest in growing our sales organization and marketing efforts in order to reach these potential customers.

Further Penetrating New Industries

        Historically, we have focused primarily on serving national brands in three industries: consumer products, retail and automotive. We have recently expanded into three new industries: healthcare, telecommunications and entertainment. Our plan is to continue to penetrate these new industries and pursue opportunities in additional industries.

Continuing to Innovate and Invest in our Technology

        Our technology is a key factor affecting our performance. We plan to continue to make substantial investments in our technology and research and development to enhance the effectiveness of our solution in an effort to deliver increasing value to our customers. In addition to improving our data processing, business intelligence and marketing execution technologies, we intend to enhance ways that our customers can access and utilize our solution and extract greater intelligence from the data we aggregate and generate. One recent innovation has been our ability to purchase non-display advertisements through our platform on behalf of our customers, which was introduced in the fourth quarter of 2012. Revenue from non-display advertisements has grown rapidly from 8% of revenue, or approximately $0.9 million, in the first quarter of 2013, to 20% of revenue, or approximately $5.5 million, in the third quarter of 2014.

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Expanding Internationally

        To date, we have focused our efforts on developing our solution for the U.S. market. We believe that our technology and solution can be adapted to other countries where national brands face similar challenges with local marketing. We recently established a presence in the United Kingdom and will continue to explore additional international expansion opportunities.

Seasonality

        In the advertising industry, companies commonly experience seasonal fluctuations in revenue. For example, many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing. Historically, the fourth quarter of the year reflects our highest level of advertising activity, and the first quarter reflects the lowest level of such activity. We expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole.

Components of Our Results of Operations

Revenue

        We generate revenue by delivering targeted digital marketing campaigns for customers through various channels, including display, mobile, social and video. Our revenue arrangements are evidenced by a fully executed insertion order, or IO. Our IOs typically have a term of less than three months and are cancellable at any time. We recognize revenue as we deliver advertising impressions, subject to satisfying all other revenue recognition criteria. We generally price our marketing campaigns on a CPM model based on the number of impressions delivered for each marketing campaign. We typically do not receive upfront payments from our customers and therefore, record an insignificant amount of deferred revenue. We contract with customers either directly or through advertising agencies that act on behalf of our customers. When we contract with an advertising agency, it acts as an agent for a disclosed principal, which is our customer. Our agreements also provide that if the customer fails to pay the advertising agency, the advertising agency is not liable to us and we must seek payment solely from the customer. Our revenue recognition policies are discussed in more detail under "Critical Accounting Policies and Significant Judgments and Estimates."

Traffic Acquisition Costs

        Traffic acquisition costs consists of media costs for advertising impressions we purchase from RTB exchanges, which are expensed as incurred. We purchase impressions, generally on a CPM basis, directly from these exchanges and typically pay them monthly for actual advertising impressions acquired. Historically, we have not committed to purchasing a defined volume of impressions from any of these exchanges. We anticipate our traffic acquisition costs will increase in absolute dollars as our revenue increases. However, our traffic acquisition costs will fluctuate on a quarterly basis due to the seasonality of our business, our experimentation with and refinement of our real-time bidding platform, competition for impressions on RTB exchanges, the type of media inventory we are purchasing and the types of campaigns we are implementing for our customers.

Other Cost of Revenue

        Other cost of revenue primarily consists of third-party data centers and advertisement-serving costs, depreciation of data center equipment, amortization of capitalized internal-use software cost for revenue-producing technologies, purchases of third-party data for specific marketing campaigns and salaries and personnel-related costs of our employees dedicated to executing our marketing campaigns. The number of employees dedicated to executing our marketing campaigns grew from two at December 31, 2011 to 16 at September 30, 2014, and we expect to continue to hire new

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employees in order to support our anticipated revenue growth. We anticipate our other cost of revenue will increase in absolute dollars as our revenue increases.

Operating Expenses

        Operating expenses consist of sales and marketing, research and development and general and administrative expenses. Salaries and personnel-related costs are the most significant component of each of these expense categories. The number of employees related to these expense categories grew from 59 at December 31, 2011 to 275 at September 30, 2014, and we expect to continue to hire new employees in order to support our anticipated revenue growth.

        Sales and marketing expense.    Sales and marketing expense consists primarily of salaries and personnel-related costs for our sales and marketing and customer support employees, including benefits, bonuses, stock-based compensation expense and commissions. We record expense for commissions ratably over the term of the associated marketing campaign. Additional expenses include marketing, advertising and promotional event programs, corporate communications, travel, and allocated overhead costs. The number of employees in our sales and marketing functions grew from 27 at December 31, 2011 to 148 at September 30, 2014, and we expect our sales and marketing expense to increase in absolute dollars in the foreseeable future as we further increase the number of our sales and marketing professionals and expand our marketing activities in order to continue to grow our business.

        Research and development expense.    Research and development expense consists primarily of salaries and personnel-related costs for our engineering and research and development employees, including benefits, bonuses and stock-based compensation expense. Additional expenses include costs related to the development, quality assurance and testing of new technology and enhancement of our existing platform technology, third-party data costs purchased for the development and enhancement of our technology platform, consulting, and allocated overhead costs. The number of employees in research and development functions increased from 22 at December 31, 2011 to 95 at September 30, 2014. We believe continuing to invest in research and development efforts is essential to maintaining our competitive position.

        General and administrative expense.    General and administrative expense consists primarily of salaries and personnel-related costs for administrative, finance and accounting, information systems, legal and human resource employees, including benefits, bonuses and stock-based compensation expense. Additional expenses include consulting and professional fees, insurance, legal, other corporate expenses and travel. The number of employees in general and administrative functions grew from 10 at December 31, 2011 to 32 at September 30, 2014, and we expect our general and administrative expenses to increase in absolute dollars as a result of our preparation to become and operate as a public company. After the completion of this offering, these expenses will also include costs associated with compliance with the Sarbanes-Oxley Act and other regulations governing public companies, directors' and officers' liability insurance, increased professional services, and an enhanced investor relations function.

Other Expense (Income)

        Other expense (income) consists primarily of interest expense, interest income and rental income from subleasing a portion of our office space. Interest expense consists of interest incurred on outstanding borrowings under our credit facilities, amortization of the debt discount related to common stock warrants granted to a lender and any adjustment of the warrants' related fair value at the end of each reporting period.

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Provision for Income Taxes

        Provision for income taxes consists of U.S. federal, state and foreign income taxes. We incurred minimal income tax expense for the years ended December 31, 2011, 2012 and 2013.

Results of Operations

        The following table sets forth selected consolidated statements of operations data for each of the periods indicated.

 
  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (in thousands)
 

Revenue

  $ 14,679   $ 35,072   $ 66,068   $ 41,817   $ 67,864  

Traffic acquisition costs

    7,762     16,485     27,712     17,160     27,552  

Other cost of revenue

    1,295     2,982     3,904     2,721     5,360  
                       

Gross profit

    5,622     15,605     34,452     21,936     34,952  

Operating expenses:

                               

Sales and marketing

    6,325     12,938     20,475     13,771     26,905  

Research and development          

    2,555     5,376     8,666     6,014     10,102  

General and administrative          

    2,117     4,043     5,217     3,342     8,440  
                       

Total operating expenses          

    10,997     22,357     34,358     23,127     45,447  

(Loss) income from operations          

    (5,375 )   (6,752 )   94     (1,191 )   (10,495 )

Other expense (income):

                               

Interest expense

    88     27     283     187     1,005  

Other expense (income)          

    31     (19 )   (2 )   (2 )   (2 )
                       

Total other expense (income)          

    119     8     281     185     1,003  

Loss before income taxes

    (5,494 )   (6,760 )   (187 )   (1,376 )   (11,498 )

Provision for income taxes

    —       —       —       —       —    
                       

Net loss

  $ (5,494 ) $ (6,760 ) $ (187 ) $ (1,376 ) $ (11,498 )
                       
                       

        The following table sets forth our consolidated statements of operations data as a percentage of revenue for each of the periods indicated.

 
  Year Ended December 31,   Nine Months
Ended September 30,
 
 
  2011   2012   2013   2013   2014  
 
  (as a percentage of revenue)
 

Revenue

    100.0 %   100.0 %   100.0 %   100.0 %   100.0 %

Traffic acquisition costs

    52.9 %   47.0 %   41.9 %   41.0 %   40.6 %

Other cost of revenue

    8.8 %   8.5 %   5.9 %   6.5 %   7.9 %
                       

Gross profit

    38.3 %   44.5 %   52.2 %   52.5 %   51.5 %

Operating expenses:

                               

Sales and marketing

    43.1 %   36.9 %   31.0 %   32.9 %   39.6 %

Research and development

    17.4 %   15.3 %   13.1 %   14.4 %   14.9 %

General and administrative          

    14.4 %   11.5 %   7.9 %   8.0 %   12.4 %
                       

Total operating expenses          

    74.9 %   63.7 %   52.0 %   55.3 %   66.9 %

(Loss) income from operations

    (36.6 )%   (19.2 )%   0.2 %   (2.8 )%   (15.4 )%

Other expense (income):

                               

Interest expense

    0.6 %   0.1 %   0.4 %   0.4 %   1.5 %

Other income

    0.2 %   (0.1 )%   0.0 %   0.0 %   0.0 %
                       

Total other expense (income)

    0.8 %   —   %   0.4 %   0.4 %   1.5 %

Loss before income taxes

    (37.4 )%   (19.2 )%   (0.2 )%   (3.2 )%   (16.9 )%

Provision for income taxes

    —   %   —   %   —   %   —   %   —   %
                       

Net loss

    (37.4 )%   (19.2 )%   (0.2 )%   (3.2 )%   (16.9 )%
                       
                       

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Comparison of Nine Months Ended September 30, 2013 and 2014

 
  Nine Months Ended September 30,    
   
 
 
  2013   2014    
   
 
 
  Period-to-Period Change  
 
   
  Percentage of
Revenue
   
  Percentage of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Revenue

  $ 41,817     100.0 % $ 67,864     100.0 % $ 26,047     62.3 %

Traffic acquisition costs

    17,160     41.0 %   27,552     40.6 %   10,392     60.6 %

Other cost of revenue

    2,721     6.5 %   5,360     7.9 %   2,639     97.0 %
                           

Gross profit

    21,936     52.5 %   34,952     51.5 %   13,016     59.3 %

Operating expenses:

                                     

Sales and marketing

    13,771     32.9 %   26,905     39.6 %   13,134     95.4 %

Research and development

    6,014     14.4 %   10,102     14.9 %   4,088     68.0 %

General and administrative

    3,342     8.0 %   8,440     12.4 %   5,098     152.5 %
                           

Total operating expenses

    23,127     55.3 %   45,447     66.9 %   22,320     96.5 %

Loss from operations

    (1,191 )   (2.8 )%   (10,495 )   (15.4 )%   (9,304 )   781.2 %

Other expense (income):

                                     

Interest expense

    187     0.4 %   1,005     1.5 %   818     437.4 %

Other income

    (2 )   0.0 %   (2 )   0.0 %       0.0 %
                           

Total other expense (income)

    185     0.4 %   1,003     1.5 %   818     442.2 %

Loss before income taxes

    (1,376 )   (3.2 )%   (11,498 )   (16.9 )%   (10,122 )   735.6 %

Provision for income taxes

        %       %       %
                           

Net loss

  $ (1,376 )   (3.2 )% $ (11,498 )   (16.9 )% $ (10,122 )   735.6 %
                           
                           

        Revenue.    Revenue increased by $26.0 million, or 62.3%, from $41.8 million for the nine months ended September 30, 2013 to $67.9 million for the nine months ended September 30, 2014. This growth was primarily attributable to the combined effect of an increase in the number of enterprise customers and in revenue per enterprise customer during the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. The number of enterprise customers increased 47.6% from 292 as of September 30, 2013 to 431 as of September 30, 2014. In addition, our revenue per enterprise customer increased 9.6% during the nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013.

        Traffic acquisition costs.    Traffic acquisition costs increased by $10.4 million, or 60.6%, from $17.2 million for the nine months ended September 30, 2013 to $27.6 million for the nine months ended September 30, 2014. The increase in traffic acquisition costs was primarily attributable to the increased volume of impressions purchased on RTB exchanges. As a percentage of revenue, traffic acquisition costs decreased from 41.0% for the nine months ended September 30, 2013 to 40.6% for the nine months ended September 30, 2014. The decrease in traffic acquisition costs as a percentage of revenue was primarily due to improvements in our real-time bidding platform, which allowed us to more efficiently purchase advertising impressions.

        Other cost of revenue.    Other cost of revenue increased by $2.6 million, or 97.0%, from $2.7 million for the nine months ended September 30, 2013 to $5.4 million for the nine months

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ended September 30, 2014. The increase in other cost of revenue was primarily attributable to an increase in infrastructure costs required to support our technology platform. This included a $0.5 million increase in amortization of internal-use software and depreciation expense, $0.5 million increase in purchases of third-party data and a $0.4 million increase in third-party data center costs. In addition, we experienced a $0.9 million increase in third-party advertisement-serving costs due to the increased volume of impressions delivered. We also experienced a $0.3 million increase in salaries and personnel-related costs. The number of full-time employees dedicated to executing our marketing campaigns increased from 7 at September 30, 2013 to 16 at September 30, 2014. As a percentage of revenue, other cost of revenue increased from 6.5% for the nine months ended September 30, 2013 to 7.9% for the nine months ended September 30, 2014.

        Sales and marketing.    Sales and marketing expense increased by $13.1 million, or 95.4%, from $13.8 million, or 32.9% of revenue, for the nine months ended September 30, 2013, to $26.9 million, or 39.6% of revenue, for the nine months ended September 30, 2014. The increase in sales and marketing expense was primarily attributable to a $10.5 million increase in salaries and personnel-related costs, as we increased the number of sales and marketing and customer support personnel to continue driving revenue growth. The number of full-time sales and marketing employees increased from 73 at September 30, 2013 to 148 at September 30, 2014. In addition, we experienced an increase in marketing, advertising and promotional events, and travel costs of $1.9 million as we focused on marketing our software solution to generate awareness, expanding our footprint with existing advertiser customers, and increasing the adoption of our software solution by new customers. We also experienced a $0.7 million increase in allocated overhead costs.

        Research and development.    Research and development expense increased by $4.1 million, or 68.0%, from $6.0 million, or 14.4% of revenue, for the nine months ended September 30, 2013, to $10.1 million, or 14.9% of revenue, for the nine months ended September 30, 2014. The increase in research and development expense was primarily attributable to a $4.1 million increase in salaries and personnel-related costs associated with an increase in research and development personnel. The number of full-time research and development employees increased from 59 at September 30, 2013 to 95 at September 30, 2014. In addition, we experienced increases in costs related to improving our existing technology platform of $0.2 million and third-party data costs of $0.4 million. These increases were partially offset by a decline in allocated overhead and consulting costs of $0.6 million.

        General and administrative.    General and administrative expense increased by $5.1 million, or 152.5%, from $3.3 million, or 8.0% of revenue, for the nine months ended September 30, 2013, to $8.4 million, or 12.4% of revenue, for the nine months ended September 30, 2014. The increase in general and administrative expense was primarily attributable to a $2.0 million increase in salaries and personnel-related costs associated with an increase in general and administrative personnel to support our growing business. The number of full-time general and administrative employees increased from 16 at September 30, 2013 to 32 at September 30, 2014. In addition, we experienced a $3.1 million increase in consulting, professional fees and other corporate administration and travel costs as we prepared for our initial public offering.

        Interest expense.    Interest expense increased by $0.8 million, or 437.4%, for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. The increase in interest expense was primarily due to additional borrowings under our previous revolving line of credit and equipment line of credit, our new loan agreements entered into in June 2014 and the fair value adjustment related to warrants issued in connection with one such loan agreement.

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Comparison of Years Ended December 31, 2012 and 2013

 
  Year Ended December 31,    
   
 
 
  2012   2013    
   
 
 
  Period-to-Period Change  
 
   
  Percentage of
Revenue
   
  Percentage of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Revenue

  $ 35,072     100.0 % $ 66,068     100.0 % $ 30,996     88.4 %

Traffic acquisition costs

    16,485     47.0 %   27,712     41.9 %   11,227     68.1 %

Other cost of revenue

    2,982     8.5 %   3,904     5.9 %   922     30.9 %
                           

Gross profit

    15,605     44.5 %   34,452     52.2 %   18,847     120.8 %

Operating expenses:

                                     

Sales and marketing

    12,938     36.9 %   20,475     31.0 %   7,537     58.3 %

Research and development

    5,376     15.3 %   8,666     13.1 %   3,290     61.2 %

General and administrative

    4,043     11.5 %   5,217     7.9 %   1,174     29.0 %
                           

Total operating expenses

    22,357     63.7 %   34,358     52.0 %   12,001     53.7 %

(Loss) income from operations

    (6,752 )   (19.2 )%   94     0.2 %   6,846     (101.4 )%

Other expense (income):

                                     

Interest expense

    27     0.1 %   283     0.4 %   256     948.1 %

Other income

    (19 )   (0.1 )%   (2 )   0.0 %   17     (89.5 )%
                           

Total other expense (income)

    8     —   %   281     0.4 %   273     3,412.5 %

Loss before income taxes

    (6,760 )   (19.2 )%   (187 )   (0.2 )%   6,573     (97.2 )%

Provision for income taxes

    —       —   %   —       —   %   —       —   %
                           

Net loss

  $ (6,760 )   (19.2 )% $ (187 )   (0.2 )% $ 6,573     (97.2 )%
                           
                           

        Revenue.    Revenue increased by $31.0 million, or 88.4%, from $35.1 million for the year ended December 31, 2012 to $66.1 million for the year ended December 31, 2013. This growth was primarily attributable to the combined effect of an increase in the number of enterprise customers and in revenue per enterprise customer during the year ended December 31, 2013 compared to the year ended December 31, 2012. The number of enterprise customers increased 35.1% from 225 as of December 31, 2012 to 304 as of December 31, 2013. In addition, our revenue per enterprise customer increased 39.7% during the year ended December 31, 2013 as compared to the year ended December 31, 2012.

        Traffic acquisition costs.    Traffic acquisition costs increased by $11.2 million, or 68.1%, from $16.5 million for the year ended December 31, 2012 to $27.7 million for the year ended December 31, 2013. The increase in traffic acquisition costs was primarily attributable to an increased number of impressions purchased on RTB exchanges. As a percentage of revenue, traffic acquisition costs declined from 47.0% for the year ended December 31, 2012 to 41.9% for the year ended December 31, 2013. The decrease in traffic acquisition costs as a percentage of revenue was primarily due to improvements in our real-time bidding platform, which allowed us to more efficiently purchase advertising impressions for our customers' marketing campaigns.

        Other cost of revenue.    Other cost of revenue increased by $0.9 million, or 30.9%, from $3.0 million for the year ended December 31, 2012 to $3.9 million for the year ended December 31, 2013. This increase was primarily attributable to an increase in infrastructure costs required to support our technology platform. This included a $0.4 million increase in amortization of internal-use software and depreciation expense and a $0.2 million increase in third-party data center costs. In addition, we experienced a $0.3 million increase in third-party advertisement-serving costs and a $0.3 million increase in salaries and personnel-related costs due to the increased volume of impressions delivered and marketing campaigns executed. These increases were partially offset by a $0.2 million decline in third-party data purchases during the year ended December 31, 2013. As a

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percentage of revenue, other cost of revenue declined from 8.5% for the year ended December 31, 2012 to 5.9% for the year ended December 31, 2013.

        Sales and marketing.    Sales and marketing expense increased by $7.5 million, or 58.3%, from $12.9 million, or 36.9% of revenue, for the year ended December 31, 2012, to $20.5 million, or 31.0% of revenue, for the year ended December 31, 2013. The increase in sales and marketing expense was primarily attributable to a $6.3 million increase in salaries and personnel-related costs, as we increased the number of sales and marketing and customer support personnel to continue driving revenue growth. The number of full-time sales and marketing employees increased from 54 as of December 31, 2012 to 84 as of December 31, 2013. In addition, we experienced an increase in our marketing, advertising and promotional events of $1.0 million, as we focused on marketing our software solution to generate awareness, expanding our footprint with existing advertiser customers and increasing the adoption of our software solution by new advertiser customers. We also experienced an increase in allocated overhead costs of $0.3 million.

        Research and development.    Research and development expense increased by $3.3 million, or 61.2%, from $5.4 million, or 15.3% of revenue, for the year ended December 31, 2012, to $8.7 million, or 13.1% of revenue, for the year ended December 31, 2013. The increase in research and development expense was primarily attributable to a $3.1 million increase in salaries and personnel-related costs associated with an increase in research and development personnel. The number of full-time research and development employees increased from 40 as of December 31, 2012 to 60 as of December 31, 2013. In addition, we experienced a $0.6 million increase in third-party data costs and a $0.5 million increase in allocated overhead costs. These increases were partially offset by a $0.7 million reduction in quality assurance and testing of new technology costs and a $0.2 million decrease in consulting costs during the year ended December 31, 2013.

        General and administrative.    General and administrative expense increased by $1.2 million, or 29.0%, from $4.0 million, or 11.5% of revenue, for the year ended December 31, 2012, to $5.2 million, or 7.9% of revenue, for the year ended December 31, 2013. The increase in general and administrative expense was primarily attributable to a $1.1 million increase in other corporate expenses as we continued to invest in our corporate infrastructure to support our growth. In addition, we experienced an increase of $0.1 million in consulting, professional and legal fees during the year ended December 31, 2013.

        Interest Expense.    Interest expense increased by $0.3 million, or 948.1%, for the year ended December 31, 2013 compared to the year ended December 31, 2012. The increase in interest expense was primarily due to additional borrowings under our revolving line of credit and equipment line of credit.

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Comparison of Years Ended December 31, 2011 and 2012

 
  Year Ended December 31,    
   
 
 
  2011   2012    
   
 
 
  Period-to-Period Change  
 
   
  Percentage of
Revenue
   
  Percentage of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Revenue

  $ 14,679     100.0 % $ 35,072     100.0 % $ 20,393     138.9 %

Traffic acquisition costs

    7,762     52.9 %   16,485     47.0 %   8,723     112.4 %

Other cost of revenue

    1,295     8.8 %   2,982     8.5 %   1,687     130.3 %
                           

Gross profit

    5,622     38.3 %   15,605     44.5 %   9,983     177.6 %

Operating expenses:

                                     

Sales and marketing

    6,325     43.1 %   12,938     36.9 %   6,613     104.6 %

Research and development

    2,555     17.4 %   5,376     15.3 %   2,821     110.4 %

General and administrative

    2,117     14.4 %   4,043     11.5 %