(Bloomberg) -- The confidence from Meet Group Inc. investors that helped lift shares by about a third since Christmas got another boost Tuesday, as the app developer topped its forecasts for both revenue and adjusted Ebitda in the fourth quarter, according to preliminary results.
The company said preliminary revenue in the quarter was $52.3 million, versus its November outlook of $47.8 million to $48.8 million. Adjusted Ebitda was $10.3 million, compared with earlier projections for $8.7 million to $9.1 million. Both figures topped the highest estimates from analysts, who had expected revenue of $49.8 million and Ebitda of $8.97 million, according to the average of three estimates compiled by Bloomberg.
Chief Executive Officer Geoff Cook said video revenue was a particular bright spot, growing for each app compared with the prior period. Meet Group’s live-streaming apps are gaining traction with millennials, and “people have started to take notice” of its success with video as advertising revenue improved each quarter in 2018, Cook told Bloomberg News in an interview. The company owns social-meeting apps including MeetMe, Skout, Tagged, LoVoo and hi5.
Shares of Meet Group gained 11 percent at 7:35 a.m. in pre-market trading in New York to $5.57. It would be the highest intraday level for the stock since October 8.
Cook highlighted a new feature called Battles, which allows two users to compete in a live-stream for votes from an audience and drew more than 30,000 match-ups a day in the last week. Apps in China use similar things to monetize their video products, and management hopes it will help strengthen the business and aid expansion into new markets.
The New Hope, Pennsylvania-based app maker’s shares rose 64 percent in 2018, compared with a 1.1 percent decline for the Russell 2000 Technology Index, as the adoption of live-streaming video played out better than expected. Meet Group is expected to report its full results in March.
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