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Marin Software (MRIN) Stock Rallied 84.9% on New Google Search Revenue Contract

Simon Mugo trader
Updated 22 Sep 2021

Marin Software Inc (NASDAQ: MRIN) rallied 84.89% premarket after signing a new revenue-sharing agreement with Google that comes into effect on October 1, 2021, after the termination of the current contract on September 30, 2021.

The terms of the new agreement will see Marin receive a baseline revenue payment and a potential incremental revenue payment.

The baseline revenue payment will be calculated as a fixed percentage of all applicable Eligible Google Search Revenue and Eligible Non-Google Search Revenue. The company will receive a minimum amount each quarter.

Marin will receive payments based on the revenue generated on its tech platform in connection with its clients’ spend on eligible Search ads displayed via Google search only.

The second revenue stream will be based on revenue generated by its clients’ spend on Search Ads that appear on eligible search engines, excluding Google search.

The three-year contract will end on September 30, 2024. 

Investors cheered the announcements, as evidenced by the premarket rally, but I wonder whether the rally will be sustained after the market opens and going forward. 

Marin Software shares have fallen drastically from their July highs of $27.23 following a parabolic rally. Company insiders have also been selling their holdings in the past few months.

The company expects a minor loss of $2.8 million to $3.1 million in Q2 2021 than the $3.6 million loss recorded in Q2 2020. However, the firm’s revenues shrunk to $6.1 million compared to $7.3 million a year earlier.

It remains to be seen whether the new deal with Google will result in high revenues for the company compared to the previous contract, given that the company did not specify the payments it earned from Google in the past. 

*This is not investment advice. 

Marin Software share price.

Tradingview chart of Marin Software stock price 22-09-2021

Marin Software shares surged 84.89% premarket to trade at $10.52, rising from Tuesday’s closing price of $5.69. 

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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading