Online advertising marketplace Rubicon Project Inc. of Playa Vista posted its first annual profit of $400,000 last year.

That apparently is prompting investors to take a second look at the firm after largely dismissing advertising tech companies as a poor investment category. Rubicon’s stock rose 18 percent last Wednesday to close at $16 a share.

Rubicon is an online marketplace for buying and selling advertising. It’s so-called programmatic software automates the buying of digital ads so that individual sales don’t have to be made. Advertisers can also use characteristics, such as geography, demography and user Web-browsing history, to target specific individuals.

Despite increasing scale and revenue, online advertising companies have been plagued in recent years with fraudulent traffic, generated by computer programs called bots, and advertisement visibility issues. Those problems have depressed the price of online advertising and subsequently depressed investors’ valuations of ad tech firms, including Rubicon.

“They are in a market that has largely had some negative sentiment toward it,” said Kerry Rice, managing director of Internet and digital media equity research at Needham & Co. of San Francisco. “They’ve really been battling those kinds of head winds despite putting up exceptional performance since going public.”

Rubicon went public at $15 a share in April 2014 and its share price peaked at about $20 a few weeks later. The company’s stock fell to a low of $9.30 in October of that year, but has mostly been bobbing around $16.

Rubicon’s reputation as a one-stop ad marketplace for sellers and buyers, however, is catching on in the industry, said President Greg Raifman.

The company increased GAAP revenue 98 percent year over year to $249 million, according to a filing with the Securities and Exchange Commission. Earnings per share for the company were 1 cent last year, even though analysts had estimated earnings equaling a negative 43 cents a share, according to Bloomberg.

“Buyers are now able to use our platform to reach all (advertising) channels at scale across mobile and display,” said Raifman, adding that the company is working on expanding. “Over time we will get into more formats like (billboards) and TV.”

A focus on adding better-performing advertising inventory and guaranteed orders with top Internet publishers has also helped Rubicon avoid some of the problems frustrating its competitors, said Raifman. Rubicon formed the Pangaea Alliance last year, an ad sales network of publishers, including the Guardian, CNN International, Financial Times, Reuters and the Economist.

“They are very well known as the exchange that has high-quality traffic and top publishers,” said Rice. “As a technology company with their performance, they should be able to accelerate away from that pack and have a higher valuation.”

Investors also appreciate Rubicon’s steady cash flow, he said.

Rubicon is projecting revenue of $315 million to $355 million this year.

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