More News24/7 Real Media Revenues Up in Q1

24/7 Real Media Revenues Up in Q1

The digital marketing firm cited strong search and international growth.

24/7 Real Media, Inc. beat analyst estimates in Q1, reporting $41.7 million in revenues in Q1 2006 at market close yesterday. The company said it had a GAAP net loss of $0.16 per share compared to a GAAP net loss of $0.01 per share in Q1 of 2005, mainly due to stock based compensation expenses.

Revenues for the international digital marketing firm increased 48 percent over Q1 of last year and 3 percent over Q4 2005.

The company cited strong growth in its international business in markets including Europe, UK, France, Germany, Korea, and Japan, where the firm has a partnership with ad agency Dentsu. Non-U.S. operations accounted for 58 percent of the firm’s revenue.

“Search is driving our markets,” 24/7 Real Media CEO Dave Moore told ClickZ News, referring to the company’s Decide DNA bid management technology. The company’s search business revenue jumped 85 percent to $17.8 million, up from $9.6 million in Q1 of last year. The segment’s gross margins were 26.6 percent in the first quarter. 24/7 acquired Australia’s Decide Interactive in 2004, providing the company with an entryway into the Asia-Pacific market.

Moore also stressed the company’s “very strong operating leverage,” noting 24/7’s Q1 ’06 pro forma operating income, which came in at $0.07 per share, up from $0.03 per share in Q1 2005.

“More and more of the revenue that we generate is beginning to fall to the bottom line,” continued Moore.

Revenue derived from 24/7’s Media Solutions business was up 28 percent to $18.2 million in Q1 2006 from $14.2 million in the same quarter last year. Gross margins for Q1 ’06 came in at 31 percent. The company’s technology solutions revenue was up nearly a third from $5.2 million in Q1 2005 to $6.9 million in Q1 ’06. Gross margins for the segment, excluding stock based compensation expenses, were 79.4 percent in Q1 ’06.

“We’re having more and more success in getting advertisers to use more than one of our services,” explained Moore.

Moore noted that in the past 18 months, the company’s staff has remained steady at around 350 employees. Though 24/7 expects to add to its staff, he added, “What we have discovered….is we’ve been able to automate quite a few of the tasks that used to be handled manually by our folks, which allows them to handle a lot more business than they were able to handle before.”

24/7 also sees potential in moving its business into China. “We’ve been exploring that marketplace,” said Moore.

The firm anticipates Q2 revenue will range between $46 million and $47 million. For the full year, 24/7 expects revenues to come in between $190 million and $200 million, and anticipates pro forma operating income per share for the full year in the range of $0.35 to $0.36.

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