Marin Software Inc (NASDAQ:MRIN) shares soared in Tuesday’s pre-market session after the cloud-focused digital advertising company entered into a three-year revenue-sharing deal with Google (NASDAQ:GOOGL) to develop its enterprise tech platform and software.
The agreement with Google lasts until September 30, 2021, when the pact will either end or be renewed.
Investors applauded the news, sending Marin shares up by 38.5% to $3.96 before the opening bell.
Marin will be on the receiving end of payments from Google based on “revenue generated on its tech platform in connection with Marin’s clients’ spend on Search Ads … appearing on Google Search only, during a relevant calendar quarter,” according to a filing lodged with the Securities and Exchange Commission.
It will also be paid by Google “in connection with its clients' spend on Search Ads appearing on the Eligible Search Engines ..., excluding Google Search, during the relevant contract year."
In a statement, Marin CEO Chris Lien said the tie-up would greatly advance Marin’s search capabilities.
"With increased investment supported by Google, leading advertisers can expect to see even more search innovation from Marin to better help them achieve their advertising goals including harnessing the power of machine learning-based ad formats and other innovative placements," Lien said.
On the back of the new Google tie-up, Marin has updated its fourth-quarter guidance and now expects revenue of $14.6 million to $15.1 million, up from its previous forecast of $11.6 million to $12.1 million.
Its operating loss, meanwhile, is expected to fall between $2.4 million to $2.9 million, which is sharply lower than its prior forecast of $5.4 million to $5.9 million.
Contact Ellen Kelleher at [email protected]