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spk00: posts that have shown high engagement to make the posts available to an even greater number of users. Another recent innovation is our debut of an activity log to enable social users to see the sequence of changes that have been made in campaigns rather than just the current version. In our e-commerce module, Marin's dedicated space for brands to manage e-commerce and marketplace advertising programs, customers can now view their Instacart, Google Shopping, Microsoft Shopping, and Criteo retail campaigns in a single dashboard, enabling a comprehensive view across publishers, including Amazon. Marin also added support for Amazon-sponsored display audience targets, and Marin continues to be one of the few Amazon ads partners that overlays our own proprietary bidding technology on Amazon's native bidding to drive better advertising performance for brands. The digital advertising industry continues to adapt to Apple's changes to user tracking, which were first deployed in its iOS 14.5 update, which asked consumers to opt-in to tracking versus opt-out, a change that has significantly curtailed app-based tracking. Marin continues to lead in our efforts to support advertisers in a world where privacy and cookie-based tracking are in flux. In particular, Marin's own Marin Tracker enables server-to-server tracking, which is both privacy compliant and also is able to accurately measure conversions on Apple's Safari browser, which is a growing challenge for leading brands using cookie-based tracking approaches. As we've noted before, Marin uses first-party tracking and is not impacted by this change, but these changes do bring additional burdens to digital advertisers and their agencies. Despite our challenges, I continue to believe that Marin has a tremendous opportunity ahead. We believe the balance of 2021 will see an uptick in overall economic activity as COVID continues to recede, with digital advertising investment earning its fair share as businesses seek to engage with customers and prospects across search, social, and e-commerce channels. Marin, with its MarinOne platform deployed, should benefit from these expected trends. We also are encouraged with our greater cash resources and our renewed agreement with Google that Marin can invest to advance our products and to better support our customers. And now, Bob will review our third quarter financial results and our outlook for the fourth quarter of 2021. Thank you, Chris.
spk01: I'll provide an overview of our third quarter results and then share our forecast for the fourth quarter of 2021. I'll begin with a review of our income statement. For the third quarter of 2021, Marin generated $6.2 million in revenue, beating the high end of our guidance for the quarter by approximately $0.2 million, primarily due to higher search revenue as a result of increased spend and improved retention. Third quarter revenue was down approximately 9% when compared to total revenue for the third quarter of 2020, but was slightly up sequentially from Q2 of 2021. Our geographic split for revenue in the third quarter was approximately 78% U.S. and 22% international. Moving on to our operating results. As a reminder, our financial statements and a reconciliation of our gap to non-gap financial measures can be found in our earnings release issued earlier today. Our non-GAAP operating loss was $3 million for the third quarter of 2021, as compared to a $2.8 million loss for the third quarter of 2020. The $3 million non-GAAP operating loss in Q3 was towards the high end of our guidance and included higher than anticipated legal and accounting fees associated with our ATM facilities and other matters. Our non-GAAP operating loss excludes approximately $600,000 in savings from an employee retention credit under the CARES Act that we recorded in the current quarter. We expect to record a credit of a similar amount in the fourth quarter as well. Our non-GAAP operating expenses were essentially flat compared to Q3 of last year. We ended the quarter with 152 total headcount versus 163 a year ago. We expect our head count to increase in the near term as we make investments in our engineering and sales and marketing teams. In terms of our balance sheet, we ended the quarter with a total cash balance of $50.2 million. In July of 2021, we registered a $40 million at the market securities offering facility. Using this facility, we generated net proceeds of $38.8 million in the third quarter, on the sale of 4.3 million shares of our common stock. This third quarter capital raise strengthened our balance sheet and enables us to make product and headcount investments that we believe will accelerate our return to growth strategy. During the third quarter, we also entered into a new equity distribution agreement with J&P Securities, pursuant to which we may offer and sell from time to time up to $50 million in common stocks. This new facility gives us a tool by which we may be able to raise additional capital in the future. As Chris mentioned above, we renewed our strategic partnership with Google in September for an additional three-year term, and the new agreement commenced on October 1st. Under the terms of the new agreement, we expect to recognize approximately $1.8 million in quarterly revenue payments versus approximately $2.3 million in quarterly revenue that we recognized in the first three quarters of 2021 under the expiring agreement. In addition to the expected quarterly revenue payments, we may also be eligible to earn incremental revenue share payments under the new Google agreement if our managed spend exceeds specified levels. Moving on to our outlook for the fourth quarter. For Q4 2021, we expect revenues to be in the range of $5.6 to $6.1 million. Our guidance for Q4 revenue includes the impact of the approximately $500,000 reduction in the amount of quarterly revenue expected to be recognized under the new Google agreement versus the amount recognized under the previous agreement with Google during the first three quarters of 2021. Our non-GAAP operating loss is expected to be in the range of $4.5 to $4 million. Our non-GAAP operating loss guidance includes the impact of expected investments in our engineering and sales and marketing teams, as well as the impact of a non-recurring charge of approximately $700,000 related to incentive compensation for achievements expected to occur in the fourth quarter. Our non-GAAP operating loss guidance excludes the estimated savings of approximately $500,000 from the employee retention credit expected for the fourth quarter. This concludes our call for today. Thank you for your time, and we look forward to updating you again during our Q4 2021 earnings call.
spk00: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.
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