–      Q2 2015 revenue increases 40% year-over-year and 5.1% sequentially

–      Company achieves 16% year-over-year growth in average number of customers and 14% growth in average revenue per customer

–      Company reaches milestone of 100+ advertiser clients included within its growing SaaS client base 

NEWPORT BEACH, Calif. – August 14, 2015 – Accelerize Inc. (OTCQB: ACLZ) (OTCBB: ACLZ), a leader in marketing technology solutions, today announced financial results for its fiscal second quarter ended June 30, 2015.

Company Highlights for Q2 2015

• New Customer Acquisition and Recurring-revenue Wins: Record second quarter revenues of $5.5MM were driven by CAKE, the Company’s digital marketing software division. During the quarter the Company increased adoption of the CAKE SaaS platform that enables marketers to accurately track, attribute and optimize advertising spend. By the end of Q2 2015, the Company reached a significant milestone as its customer roster now includes more than 100 advertisers. Additionally, CAKE continues to add larger clients to its platform leading to average revenue per customer increasing by 14% year-over-year.
  • New Global Partner Marketplace: The Company launched CAKE Connect, a new worldwide digital marketing ecosystem that includes Neo@Ogilvy, Marketo, Google, Forensiq, Bing and more. Through CAKE Connect, customers as well as the Company’s extensive network of industry-leading agency, technology, media and network partners are enabled to easily collaborate and generate additional revenues.
  • International Expansion: The Company continued to achieve significant global client growth with 28% of overall revenue being derived outside the U.S. in Q2 2015, up from 24% in Q2 2014.

“We finished the second quarter with strong performance across the board – the acquisition of new customers, expansion of relationships with existing customers and the increase of our international footprint,” said Brian Ross, CEO and Chairman of Accelerize Inc. “We also recognize and appreciate the contribution that partners have played in our growth. Our recent investments in people, product and partners paid off with record revenue coupled with strong customer adoption and retention. Moving forward we will continue to invest in product innovation and advancing our marketing platform to bring even more value to our growing global customer base.”

Financial Highlights for Q2 2015

• Revenues: Total revenues for Q2 2015 reached a record $5.5MM, a 40% increase from $3.9MM recorded in Q2 2014, and a 5.1% sequential increase from Q1 2015. Revenue growth was largely driven by a 16% increase in the average number of customers and a 14% increase in average revenue per customer year-over-year. Geographically, 28% of revenues in Q2 2015 were derived from outside the U.S. as compared to 24% in Q2 2014 reflecting the success of the Company’s international expansion efforts. While this revenue is derived from international expansions it is important to note it is denominated in U.S. dollars and not subject to foreign currency risks and fluctuations.
• Operating (Loss) Income:Operating loss for Q2 2015 was $(1.7MM), compared to operating loss of ($711K) recorded in Q2 2014. The loss in Q2 2015 was largely attributed to a $514K increase in sales and marketing expenses to drive customer growth, a $784K increase in general and administrative expenses to bolster its management and support staff, and a $726K increase in ongoing research and development expenses to foster product innovation, partially offset by a $1.6MM increase in revenue. Sequentially, Q2 2015 sales and marketing expenses declined by 10.3% and G&A expenses declined by 4.2% compared to Q1 2015. The Company sees these expenses continuing to decline as a percentage of revenue in future quarters.
• Adjusted EBITDA: Adjusted EBITDA for Q2 2015 was ($831K). Adjusted EBITDA is a non-GAAP financial measure that excludes stock option and warrant expense and is defined below.
• Cash Flow: Net cash used in Q2 2015 was ($727K), compared to net cash provided of $264K during Q2 2014.
• Operating Expenses: The Company’s total operating expenses in Q2 2015 increased 57% year-over-year to $5.6MM inclusive of $490K of stock option and warrant expense, and $388K of depreciation and amortization expense. During Q2 2015 the Company’s investment in ongoing research and development to drive product innovation was $1.3MM, a 121% year-over-year increase. As a result, free cash flow, which amounts to cash flow from operations less capital expenditures, totaled $(2.3MM).
• Balance Sheet: Total cash as of June 30, 2015 was $404K compared to $1.5MM on March 31, 2015. Total current assets as of June 30, 2015 decreased to $3.1MM, a decrease of 15% compared to $3.7MM on March 31, 2015. Total working capital decreased to $1.3MM compared to $1.9MM on March 31, 2015.

“Our strong financial results in revenue and customer growth reflect the unique value proposition of our CAKE platform and the success of our effort to expand into larger clients in the advertiser market,” said Michael Lin, CFO of Accelerize Inc. “As we move through 2015 we expect the growth in our expenses to moderate and decline as a percentage of revenue. We believe we have adequately staffed our organization and the Company is well-positioned to achieve sustained growth for the foreseeable future. ”

 About Accelerize

Accelerize Inc. (OTCQB: ACLZ) (OTCBB: ACLZ) offers marketing technology solutions that revolutionize the way advertisers leverage their digital advertising data. For more information, visit www.accelerize.com.

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