Demand Media, Inc. (NYSE:DMD) reported financial results for the quarter ended March 31, 2011 after the Market closed today.
The market loved the report as shares soared up over 15% to $19 a share after hours.
The stock is now trading well above the bottom we called at $13.99 back on April 25th.
Here the highlights:
Q111 Financial Summary:
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GAAP
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• Revenue was $79.5 million, an increase of 48% compared to $53.6 million in Q110.
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• Loss from operations was $(4.2) million compared to a loss from operations of $(3.2) million in Q110.
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• Net loss was $(5.6) million compared to a net loss of $(4.1) million in Q110.
Net loss per share was $(0.13) compared to $(0.94) in Q110.
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• Cash flows from operations was $19.2 million, up 29% compared to $14.9 million in Q110.
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Non-GAAP1
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• Revenue ex-TAC was $76.3 million, an increase of 50% compared to $51.0 million in Q110.
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• Adjusted OIBDA grew 78% to $20.1 million, or 26.3% of Revenue ex-TAC, compared to $11.3 million, or 22.2% of Revenue ex-TAC in Q110
.
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• Adjusted Net Income was $5.1 million, an increase of 121% compared to $2.3 million in Q110.
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Adjusted Net Income per share – diluted was $0.06, up 100% compared to $0.03 in Q110.
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• Discretionary Free Cash Flow was $14.1 million, up 36% compared to $10.4 million in Q110.
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• Free Cash Flow was $(0.1) million compared to $0.3 million in Q110.
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“We reported better-than-expected results in Q1 2011, driven primarily by continued momentum from our owned and operated sites,” said Richard Rosenblatt, Chairman and CEO of Demand Media.
“We also continued to invest in Demand Media’s long-term success, enhancing our consumer offerings through new partnerships with Rachael Ray, Tyra Banks and Getty Images. We believe our publishing platform is the most comprehensive and effective of any online publisher and our focus on delivering relevant, valuable content that makes consumers’ lives better will continue to drive our success.”
1 | ||
Q111 Financial Highlights:
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• Content & Media Revenue was $51.9 million, up 72% compared to $30.2 million in Q110.
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• Traffic acquisition costs (TAC), which represent the portion of Content & Media revenue shared with Demand Media partners, was $3.2 million,
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or 6.2% of Content & Media revenue, compared to $2.7 million, or 8.9% of Content & Media revenue in Q110.
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• Content & Media Revenue ex-TAC was $48.7 million, up 77% compared to $27.5 million in Q110.
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• Registrar Revenue was $27.7 million, up 18% compared to $23.4 million in Q110.
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• Investment in Intangible Assets was $14.2 million, up 40% compared to $10.2 million in Q110.
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“We are off to a great start in 2011 – reporting record quarterly revenue, stronger than expected Adjusted OIBDA and over $19 million of cash flows from operations in the first quarter,” said Demand Media’s President and CFO Charles Hilliard. “Outperformance in Q1 was driven by ongoing revenue growth from our content library, combined with strong direct brand advertising sales. Our raised fiscal 2011 guidance reflects our better-than-expected first quarter results as well as our continued reinvestment in content and diversifying sources of traffic and revenue.”
Q111 Business Highlights:
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• The Company continued to attract new brand advertisers contributing to 46% year-over-year growth in owned and operated Content & Media RPMs.
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• Cracked.com’s Facebook fan base surpassed the one million mark.
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• The Company enhanced its publishing platform with:
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– The launch of typeF.com, in conjunction with Tyra Banks, an interactive fashion and beauty website that empowers women to discover and embrace their unique style;
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– A new multi-year exclusive partnership with Rachael Ray, who will become the lead creative force of the eHow Food channel and identify and develop up-and-coming culinary talent;
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– A joint licensing agreement with Getty Images, providing access to its extensive library of premium quality, rights-managed images, video footage and audio clips; and
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– The launch of a new eHow look and feel, creating six primary channels around Home, Money, Style, Health, Family and Food with specially–programmed content and features.
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• The Company completed the acquisition of CoveritLive, powering live events with social engagement tools.
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Operating Metrics:
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Quarter ended March 31, | |||||||||
2010 | 2011 | %
Change |
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Content & Media Metrics: | |||||||||
Owned and operated
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Page views(1) (in millions) | 1,954 | 2,582 | 32 | % | |||||
RPM(2) | $ | 10.71 | $ | 15.69 | 46 | % | |||
Network of customer websites | |||||||||
Page views(1) (in millions) | 2,646 | 3,766 | 42 | % | |||||
RPM(2) | $ | 3.50 | $ | 3.01 |
(14)
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%
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RPM ex-TAC(3) | $ | 2.48 | $ | 2.16 |
(13)
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%
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Registrar Metrics: | |||||||||
End of Period # of Domains(4) (in millions) | 9.4 | 11.4 | 21 | % | |||||
Average Revenue per Domain(5) | $ | 10.16 | $ | 9.88 |
(3)
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%
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(1)
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Page views represent the total number of web pages viewed across our owned and operated websites and/or our network of customer websites. | |
(2) | RPM is defined as Content & Media revenue per one thousand page views. | |
(3) | RPM ex-TAC is defined as Content & Media Revenue ex-TAC per one thousand page views. | |
(4) | Domain is defined as an individual domain name paid for by a third-party customer where the domain name is managed through our Registrar service offering. | |
(5) | Average revenue per domain is calculated by dividing Registrar revenue for a period by the average number of domains registered in that period. Average revenue per domain for partial year periods is annualized. | |
Business Outlook
The following forward-looking information includes certain projections made by management as of the date of this press release. The Company does not intend to revise or update this information, except as required by law, and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. The factors that may affect results include, without limitation, the factors referenced later in this announcement under the caption “Cautionary Information Regarding Forward-Looking Statements.” These and other factors are discussed in more detail in the Company’s filings with the Securities and Exchange Commission.
Below is the Company’s guidance for its quarter ending June 30, 2011 and fiscal year ending December 31, 2011.
(In millions) | Second Quarter
2011
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Fiscal Year
2011
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Revenue | $73.5 – $77.5 | $320.0 – $330.0 | ||
TAC (traffic acquisition costs) | $3.5 | $15.0 | ||
Revenue ex-TAC | $70.0 – $74.0 | $305.0 – $315.0 | ||
Income (loss) from operations | ($2.1)- ($0.6) | ($5.4) – ($1.4) | ||
Depreciation | $5.2 | $21.0 | ||
Amortization of intangible assets | $10.0 | $41.0 | ||
Stock-based compensation | $4.8 | $25.0 | ||
Non-cash purchase accounting adjustments | $0.1 | $0.4 | ||
Adjusted OIBDA | $18.0 – $19.5 | $82.0 – $86.0 | ||
Weighted average diluted shares(1) | 89.5 – 90.5 | 91.0 – 93.0 | ||
Whoopee! I still wouldn’t invest in that company.
who cares about revenue. they bought some traffic to compensate for the hit they took from a simple google algo tweak. show me net _income_. show me that the company’s owned and operated sites are not 100% reliant on google. their “business highlights” are pure hype (=to divert attention). show me one of those highlighted items that is actually producing income.