Mobile marketing firm Velti has confirmed a 22 per cent reduction in headcount, as it announced disappointing results for Q1, 2013. The company reported a net loss of $156.4m (£102m) for the quarter, compared with $8.8m in Q1, 2012.

According to newly-appointed CFO Jeffrey Ross, speaking during Veltis earnings call, the loss is “fundamentally due to lower-than-expected results within our advertising business”. 

Revenue declined 21 per cent year-on-year, to $41m – with advertising accounting for around a quarter of this total, with the other three-quarters coming from marketing revenues.

Its also worth noting that the $156.4m loss includes a one-off charge of $133.1m, which pushed the companys total costs and expenses up to $201.8m, from $66.7m a year earlier. According to Veltis release, this charge was “related to the write-down of substantially all goodwill and other intangible assets, which was triggered by our decline in market value and was largely mechanical based on our stock price on 31 March.” 

Taking this into account, Velti reported an adjusted net loss of £18.1m, which is more closely comparable to a year earlier, though still substantially larger.

Jobs

Off the back of these results, Velti has announced a significant restructuring of its business, intended to reduce operating expenses by around 20 per cent annually. This primarily means a reduction in heacount, down by 22 per cent from the start of the year, “with an emphasis on senior staff and corporate overhead”, according to Velti CEO and co-founder Alex Moukas on the earnings call.

Its not all bad news on the jobs front, however, with the appointment of Mari Baker as COO, and Jeff Ross as CFO. Moukas said Ross, who was hired earlier in the quarter, had been “instrumental in helping us work through many of the difficult financial issues that we face, and enabling us to chart the quarter for long-term success”.

 “Seven-figure deals”

Throughout the earnings call, Velti remained confident that it can turn its fortunes around, pointing repeatedly to “seven-figure deals” it had secured during Q1, with brands including Ford, AT&T, Orange and Coca-Cola – which Moukas clarified were “not one-off campaigns”.

Ross cut straight to the point on the call, saying that: “Im not going to specifically discuss cash balance today other than to say its enough to run our business. With respect to liquidity, we think its tight, but well be able to manage through this tightening into Q3 when we expect a significant amount of cash flow.”

Looking forward, Velti predicts Q2 revenues of $42-45m, a slight growth over this quarter, and seems to be pinning its hopes on a strong Q3 performance.

“During the first quarter, we continued to take the necessary steps to improve Veltis financial position and drive long-term growth,” said Moukas. “2013 will be a transitional year as we continue to optimize our business around strategic geographies and accounts, being selective about the revenue opportunities we pursue.”

Quotes from Veltis earnings call taken from Seeking Alphas transcript.