AQuantive Sees Big Growth in All Units

The quarter just ended was another strong one for aQuantive, which reported net income of $7.8 million, up from $7.5 million for the same period last year.

Each division of aQuantive’s business saw increased revenues and operating income. The company signed a total of 24 new contracts, a handful of which were cross-sold across its three segments. The company’s digital marketing services segment, which includes Avenue A / Razorfish, brought in $48.3 million during the quarter. That’s quadruple the year-ago period, which was prior to its acquisition of SBI.Razorfish. Recent client wins include Hotels.com and Mercedes-AMG.

Atlas, aQuantive’s digital marketing technologies division, had revenue of $22.5 million, compared with $14.4 million in Q2 2004. During the quarter, Atlas entered the digital television space with Atlas On Demand. Since then, it has established partnerships with video on demand providers SeaChange and C-C-COR. Profitability for Atlas On Demand would not be immediate, said CEO/President Brian McAndrews.

DRIVEpm and European-based MediaBrokers make up aQuantive’s digital performance media unit. The division increased its revenue from $665,000 in the second quarter of 2004 to $6.5 million for the period just ended. Executives attributed the growth to increased penetration with customers, specifically agency clients.

Total revenue for the three month period ending June 30 reached $77.2 million, a year over year increase of 177 percent. Net income of $7.8 million breaks down to $.11 per diluted share.

The company raised guidance for the full year 2005 but warned against seasonal softness in Q3. Revenue for all of 2005 is expected to be between $288 and $298 million.

CFO Mike Vernon advised the company is considering changing the way it gives guidance for upcoming quarters. “We believe the quarterly guidance gives too much attention to the short term,” he said.

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