• by Tobi Elkin  @tobielkin, January 19, 2016

Privately held OpenX has opened the kimono on its year-end 2015 financials -- and those numbers, released Tuesday, paint a rosy picture. The independent sell-side platform revealed net revenue of $140 million, with 40% year-over-year organic growth, positive net income and 100% year-over-year mobile revenue growth. The company also said it added 250 publisher clients in 2015 and logged a 100% retention rate of its top 75 clients.

Positive net income is one of the most difficult profitability measures to achieve. OpenX cited three factors enabling growth: It’s helping publishers generate more revenue, keeping its marketplace stocked with high-quality inventory and making investments in customer service.

OpenX rival Rubicon posted strong year-over-year growth, with managed revenue growing 45% to $244.4 million in the third quarter, while net revenue grew 80% to $57.9 million. Mobile comprised more than a quarter of Rubicon’s revenue, according to the company’s Q3 earnings.

OpenX’s financial disclosures come as ad-tech companies struggle to differentiate themselves and there’s more than a whiff of industry consolidation in the air. Last year, major players Collective, Turn, PubMatic and Rocket Fuel experienced layoffs. By contrast, OpenX, with more than 450 employees globally, made 110 new hires in 2015 and was named one of the “50 Best Places to Work in Advertising and Media” by Advertising Age -- just one of five non-agency companies to make the list.

Overall, programmatic advertising is growing, which benefits both larger and smaller players like OpenX. “All the big players have OpenX’s capabilities, so maybe they’re trying to drum up new business,” said one person familiar with the market.

Real-Time Daily, following on a story in Business Insider, reported on Dec. 15 that OpenX sought suitors in hopes of being acquired. In fact, company CEO Tim Cadogan referenced industry consolidation earlier that month in Re:Code, suggesting that companies driving the greatest amount of revenue for clients and landing new business would be “winners.”

“We do meet with a lot of companies continually, looking for partnerships and ways to work together,” Cadogan told RTD. “We’re constantly meeting with investors, strategic companies and equity analysts. We evaluated 70 potential M&A deals: companies that we could buy,” he said, adding that the company works with all the major industry players and is a high-quality source of traffic for them.

Cadogan noted that OpenX ranked No. 1 in quality for the sixth consecutive month on the Pixalate Global Seller Trust Index, an independent quality rating index for digital advertising. “Our clients had a good year because we’re bringing them through header bidding and other services, a better revenue solution. Our success is derivative of their success.”

One of OpenX’s clients underscored the point: “One of the biggest wins for us in the digital advertising space has been the demand diversification that header bidding has brought to the table. OpenX has been a strategic and trusted revenue source for us, providing new and innovative solutions to help us monetize our inventory and stay ahead of the curve,” said Cory Wheeler, head of programmatic advertising at Graphiq. “Due to the increase in competition for our inventory, we’ve seen a 30% to 40% increase in CPMs, which has allowed us to test new channels and significantly scale our business.”

Regarding OpenX, one ad tech executive told RTD that privately held companies don’t tout financials unless they’re putting up a “big 'for sale' sign.”

"That's only one interpretation and it is non-representative of our intentions," OpenX chief communications officer Deborah Roth noted in an email.  "We also released our financials in 2014 as well -- this is standard operating procedure for us."

The outlook for programmatic ad spending is positive. Research firm eMarketer projected that spending in the U.S. on programmatic digital display ad spending would reach $15.43 billion in 2015, up 49.5% over 2014 spending levels.

Meanwhile, speculation over industry consolidation and M&A activity in 2016 abounds.

"We’re hearing that brands and marketers want to pare back the number of tools and technology providers they’re using,” said Lauren Fisher, the analyst who covers the programmatic landscape at eMarketer. “Now, from a programmatic perspective, does that mean they’re only going to use one demand source and that today’s ecosystem will shrink as a result? No. But it does mean that buyers will be smarter and more stringent about which platforms and properties they choose, which could drive added innovation and consolidation,” Fisher said.

Cadogan told RTD that OpenX is profitable and cash-flow positive. “We haven’t raised capital in over three years, and we don’t expect to raise it.”