ValueClick Posts Strong Results, Raises Guidance

ValueClick posted strong financial results for 2004, quadrupling profits from the prior year and raising its guidance for 2005 on the strength of its media and affiliate marketing segments.

The company reported revenue of $169.2 million, an 83 percent increase from the year-ago period. Net income for the year was $40.1 million, or $0.48 per share, compared to $9.8 million, or $0.13 per share, for 2003.

Much of the gains were attributed to better than expected performance from its media and affiliate marketing businesses. ValueClick Media, which includes the company’s brand advertising and direct marketing groups and the PriceRunner comparison shopping engine, saw 71 percent organic revenue growth in 2004. Its affiliate marketing business, Commission Junction, grew organically by 34 percent.

For Q4, media revenue grew 124 percent to $32.9 million, affiliate marketing revenue grew 83 percent to $17.8 million, and technology revenue, from its Mediaplex business, was flat at $5.6 million.

“ValueClick concluded a successful 2004 on a high note, with record revenue and profitability, and year-over-year organic revenue growth of 49 percent in the fourth quarter,” said James Zarley, chairman and CEO. “We remain focused on expanding the product breadth and geographic footprint of our online marketing offerings to drive growth and profitability in 2005 and beyond.”

The company raised its 2005 revenue guidance to $215 million to $220 million, and its EPS guidance to $0.37 to $0.39.

ValueClick is expanding geographically in many of its businesses. Last quarter, it launched affiliate marketing and comparison shopping in Germany, and expanded comparison shopping in France. The company is currently launching search in the UK, and plans to launch comparison shopping in the U.S. early next quarter. It’s also considering launching affiliate marketing in Asia, following the moves of one of its larger customers into the Chinese market.

Zarley hinted ValueClick is still open to continuing the acquisition spree that brought the company Search123 in May 2003, Commission Junction and Hi-Speed Media in December 2003, and Pricerunner.com in August 2004.

“We continue to look for good, accretive acquisitions. But our growth is not dependent on M&A. Our business channels are all growing, and I’m confident ValueClick will continue to be an organic growth story,” he said. “Our industry is still in its early stages. We have many opportunities for organic growth and further consolidation. The only way to capitalize on the opportunities before us is to be completely focused, and we are. As proud as we are of our accomplishments this year, we’re most focused on the work that’s in front of us.”

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