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Replies to post #45 on Demand Media, Inc. (LFGR)
· Brand advertisers and audience growth to over 100 million monthly unique visitors help drive record revenue
· Strong performance from content library results in 95% year-over-year growth in cash flows from operations to over $20 million in Q4 2010
SANTA MONICA, CA — February 22, 2011 — Demand Media, Inc. (NYSE: DMD), a leading content and social media company, today reported financial results for the fourth quarter and fiscal year ended December 31, 2010.
Q410 Financial Summary:
GAAP
· Revenue was $73.6 million, an increase of 33% compared to $55.5 million in Q409.
· Income from operations was $2.8 million compared to a net loss from operations of ($3.2) million in Q409.
· Net income was $1.0 million compared to a net loss of ($3.9) million in Q409.
· Cash flows from operations was $20.9 million, up 95% compared to $10.7 million in Q409.
Non-GAAP (1)
· Revenue ex-TAC was $70.3 million, an increase of 35% compared to $51.9 million in Q409.
· Adjusted OIBDA grew 88% to $20.1 million, or 28.6% of Revenue ex-TAC, compared to $10.7 million, or 20.6% of Revenue ex-TAC in Q409.
· Adjusted Net Income was $5.6 million, an increase of 174% compared to $2.0 million in Q409.
· Discretionary Free Cash Flow was $16.1 million, up 116% compared to $7.4 million in Q409.
· Free Cash Flow was $3.3 million compared to ($0.6) million in Q409.
“We are pleased to report strong financial results in our first earnings release as a public company,” said Richard Rosenblatt, Chairman and CEO of Demand Media. “Our record performance in the fourth quarter was driven by our ability to attract and engage consumers while delivering great results for our growing base of advertisers. In the fourth quarter, new brand advertisers helped fuel 36% year-over-year growth in revenue per thousand page views, or RPM, on our owned and operated properties, while our audience grew organically to more than 100 million unique monthly visitors worldwide (as measured by comScore). Increased engagement and audience growth during the quarter from emerging channels, particularly Facebook and mobile, highlight just some of the large opportunities for our business model.”
(1) Non-GAAP measures are described below and are reconciled to the corresponding GAAP measures in the accompanying tables.
1
Q410 Financial Highlights:
· Content & Media Revenue was $46.8 million, up 46% compared to $32.1 million in Q409.
· Traffic acquisition costs (TAC) , which represent the portion of Content & Media revenue shared with Demand Media partners, was $3.3 million, or 7.1% of Content & Media revenue, compared to $3.6 million, or 11.2% of Content & Media revenue in Q409.
· Content & Media Revenue ex-TAC was $43.5 million, up 53% compared to $28.5 million in Q409.
· Registrar Revenue was $26.8 million, up 14% compared to $23.4 million in Q409.
· Investment in Intangible Assets was $12.8 million, up 58% compared to $8.1 million in Q409.
“Strong continued growth from our evergreen content library published prior to 2010 helped drive two major achievements in the fourth quarter - Content & Media revenue ex-TAC accelerated to 53% year-over-year growth and cash flows from operations grew 95% year-over-year, surpassing the $20 million milestone for the first time,” said Demand Media’s President and CFO Charles Hilliard. “Ongoing revenue growth from high-quality, long-lived content published in prior years, compounded with new discretionary content investments, positions Demand Media for significant growth in 2011.”
Q410 Business Highlights:
· During the quarter, the Company continued to attract new brand advertisers.
· Cracked became the most visited humor web property in the United States, according to comScore, and was highlighted by Facebook for achieving 450% growth in visits year-over-year from the social network.
· LIVESTRONG.COM’s calorie-tracking mobile application became the all-time top grossing Health & Fitness application in the iTunes store. LIVESTRONG.COM also released MyQuit Coach, an innovative application to help users stop smoking and live healthier.
Fiscal 2010 Financial Summary:
GAAP
· Revenue was $252.9 million, an increase of 27% compared to $198.5 million in 2009.
· Loss from operations was ($0.5) million compared to a loss from operations of ($18.4) million in 2009.
· Net loss was ($5.3) million compared to a net loss of ($22.5) million in 2009.
· Cash flows from operations was $61.6 million, up 57% compared to $39.2 million in 2009.
2
Non-GAAP
· Revenue ex-TAC was $240.7 million, an increase of 28% compared to $187.9 million in 2009.
· Adjusted OIBDA grew 68% to $62.0 million, or 25.8% of Revenue ex-TAC, compared to $36.8 million, or 19.6% of Revenue ex-TAC in 2009.
· Adjusted Net Income was $15.9 million, an increase of 184% compared to $5.6 million in 2009.
· Discretionary Free Cash Flow was $40.2 million, an increase of 68% compared to $23.9 million in 2009.
· Free Cash Flow was ($7.0) million compared to $1.2 million in 2009.
Fiscal 2010 Financial Highlights:
· Content & Media Revenue was $152.9 million, up 42% compared to $107.7 million in 2009.
· TAC increased by 16% to $12.2 million, or 8.0% of Content & Media revenue, compared to $10.6 million, or 9.8% of Content & Media revenue in 2009.
· Content & Media Revenue ex-TAC was $140.7 million, up 45% compared to $97.2 million in 2009.
· Registrar Revenue was $100.0 million, up 10% compared to $90.7 million in 2009.
· Investment in Intangible Assets was $47.2 million, an increase of 108% compared to $22.7 million in 2009.
