aQuantive, buoyed by an upbeat online ad market and its acquisition of SBI.Razorfish last summer, reported a 74 percent rise in profit for the fourth quarter, posting growth in all three of the company’s divisions.
Net income in Q4, 2004 rose to $7.1 million, or 10 cents per share, from $4.1 million, or 6 cents per share, in the same period a year earlier.
Revenue for the quarter rose to $60.7 million from $18.5 million a year earlier. At the beginning of 2004, the company excluded media costs paid to publishers from its financial results, which had been previously included in earnings. The 2003 revenue figure reflects that adjustment.
“Our recent acquisitions play no small part in our achieving this level of growth,” said President and CEO Brian McAndrews, later adding that organic gains still accounted for 76 percent growth over the previous year’s fourth quarter.
The digital marketing services division, which includes interactive agency Avenue A/Razorfish, posted the highest gain, revenue of $36.7 million compared to $8.8 million a year earlier, before the Razorfish acquisition. Executives said paid search accounted for 28 percent of the agency’s billings in the fourth quarter.
“We are beginning to see the benefits of the combined capabilities of Avenue A and Razorfish,” said McAndrews, noting the agency is working to cross-sell its services. “We are very encouraged and feel that we will be able to sell a full suite of services to our existing clients.”
aQuantive’s digital marketing technology unit, which comprises Atlas DMT, posted revenues of $18.9 million in the fourth quarter. That’s compared to 9.2 million in the year-ago quarter. McAndrews attributed growth to strong demand for an integrated solution — especially one that includes search. Noting the company’s rich media technology is in beta, he said he expects its addition to further increase advertiser interest in the division’s products.
The company’s newest unit, digital performance media, which consists of DrivePM and European-based MediaBrokers, saw its second profitable quarter. The segment brought in revenue of $5.1 million and operating income of $645,000 in the fourth quarter, partly driven by increased spending for the holidays. Executives noted they were pleased with the division’s performance and planned to hire new employees to prepare for expected growth.
Another area of investment for the company is the international arena. Though aQuantive bought European firms MediaBrokers and TechnologyBrokers in July of 2004, executives say they want to expand overseas business in the Avenue A/Razorfish operation.
For the first quarter of 2005, aQuantive expects a profit of $0.02 to $0.05 per share on revenue of $55 to $59 million. For the full-year 2005, the company projects it will bring in $250 to $260 million, resulting in net income of $0.21 to $0.23 per share. The company plans to focus on organic growth and integrating its acquisitions in 2005, but execs didn’t rule out small, strategic acquisitions.
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