If you're new to Cheap Hosting Directory, you may want to subscribe to our RSS feed. Thanks for visiting!

San Francisco, California - (Cheap Web Hosting Directory) - June 20, 2007 - Search engine destination portal, LookSmart, has reported its first quarter of 2007 results, featuring a revenue growth of 25% over the same quarter in the previous year, with a gross margin expansion of 42%, citing that key advertising and audience metrics continue to improve.

Dave Hills, President and Chief Executive Officer of LookSmart remarked, ”We continue to be encouraged with the results achieved during the first quarter of 2007 as we execute our strategy focused on the customer groups of consumers, publishers and advertisers. During the first quarter of 2007, we continued to invest in the critical areas of research and development, as well as sales and marketing. We meaningfully added to our executive sales team with the addition of two highly experienced sales executives to focus on publishers and advertisers, as well as opening an East Coast operation. We also continued critical development of our AdCenter platform, providing publishers with market leading capabilities which benefit advertisers as well. We made progress with our consumer sites as our consumer audience increased 23% year-over-year to over 15 million unique visitors for the first quarter. The recent announcement of our partnership with Blinkx, the world’s largest video search engine, demonstrates our commitment to enhancing and growing our consumer proposition.”

For the first quarter of 2007, LookSmart reported total revenue of $13.2 million, representing a 25% increase from $10.5 million in the first quarter of 2006. GAAP net loss for the first quarter of 2007 was $3.4 million, or $0.15 per share, which includes $0.5 million of non-cash, share-based compensation charges. This compares to a GAAP net loss in the first quarter of 2006 of $4.5 million, or $0.20 per share, which includes non-cash, share-based compensation charges of $0.3 million. The EPS amounts above are based on 22.9 million and 22.8 million weighted average shares outstanding in the first quarter of 2007 and 2006, respectively.

Gross margin increased to 42% in the first quarter of 2007 versus 33% in the first quarter of 2006 due to lower traffic acquisition costs (TAC). Total operating expenses in the first quarter of 2007 were $9.3 million, including $0.5 million of non-cash, share-based compensation charges. This compares to total operating expenses of $8.5 million in the first quarter of 2006, which included $0.3 million of non-cash, share-based compensation charges. Operating expenses in the first quarter of 2007 include increased levels of investment in the areas of sales and marketing as well as an increase in general and administrative expense. Despite the higher operating expense levels, operating leverage improved approximately 10 percentage points in the first quarter of 2007 compared to the first quarter of 2006. LookSmart reported an operating loss of $3.9 million in the first quarter of 2007 as compared to an operating loss of $5.0 million in the same period a year ago.

On a non-GAAP basis, for the first quarter of 2007, Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization excluding stock based compensation) improved to a loss of $2.1 million from a loss of $2.8 million in the first quarter of 2006. Capital expenditures, including capitalization of internally developed software, were $0.6 million in the first quarter of 2007, compared to $1.4 million in the prior year period. Depreciation and amortization was $1.4 million in the first quarter of 2007 compared to $1.8 million in the first quarter of 2006. The reduction in depreciation and amortization reflects the lower capital expenditure levels of the Company over the past two years. The Company ended the quarter with $38.6 million in cash, cash equivalents and investments, a decrease of $2.5 million from the end of the fourth quarter of 2006.

Q1 2007 Key Metrics Performance

• Total paid clicks increased to approximately 94 million for the first quarter of 2007 compared to approximately 74 million for the first quarter of 2006, representing an increase of 27%.
• Average revenue per click (RPC) was approximately $0.11 for the first quarter of 2007, a slight decline from approximately $0.12 in the first quarter of 2006.
• Traffic acquisition costs (TAC) of 59% for LookSmart’s Ad Network decreased from the 66% rate in the first quarter of 2006.
• Total monthly unique visitors to the Company’s network of owned sites were 15.2 million at the end of the first quarter of 2007 compared to 12.4 million at the end of the first quarter of 2006.

LookSmart provides the following outlook on a GAAP basis:

• Revenue is expected to increase 20% to 25% from the second quarter of 2006.
• Gross margin is expected to remain relatively consistent with the first quarter of 2007 at 42% to 43%, an approximate 7-8 percentage point increase over the second quarter of 2006.
• Operating expenses are expected to increase by approximately 5% from the second quarter of 2006, inclusive of approximately $0.6 million of non-cash, share based compensation expense. While operating expense levels will increase, the Company expects operating leverage to continue to improve due to ongoing revenue growth.
• Depreciation and amortization expense is expected to decrease from $1.7 million in the second quarter of 2006 to $1.4 million in the second quarter of 2007.
• Capital investment levels are expected to decrease by approximately $0.7 million in the second quarter of 2007 versus the prior year period.

LookSmart is updating its outlook, on a GAAP basis, for the full year ending December 31, 2007 as follows:

• Revenue is expected to increase 20% to 25% from the year ended 2006.
• Gross margin is expected to remain relatively consistent throughout the year at approximately 42% to 44%.
• Operating expenses are expected to increase approximately 5% from 2006 levels, inclusive of approximately $2.6 million of non-cash, share based compensation expense.
• Depreciation and amortization expense is expected to decrease from $6.4 million in 2006 to approximately $5.6 million for the year ended December 31, 2007. This is reflective of the lower capital investment levels experienced at the Company during the prior two years.
• Capital investment levels are expected to increase by approximately $2 million in 2007 to accommodate required investments that were deferred during 2005 and 2006. A significant portion of this capital investment will be funded through a new $5 million equipment line that was closed during April 2007.

LookSmart is an online media and technology company specializing in vertical search. The company provides relevant content, advertising and technology solutions for consumers, advertisers and publishers. LookSmart’s owned and operated vertical search sites are where customers look for what they need. The Company’s sites and web tools offer essential search results with the ability to find, save and share articles. In addition to owned and operated properties, LookSmart’s distribution network includes selected, monitored syndicated publishers and search engine partners that maximize advertiser ROI. Distribution partners include CNET’s Search.com, Cox Interactive, InfoSpace (Dogpile, Webcrawler), Local.com, Simpli.com and Viacom. LookSmart offers a comprehensive and customizable set of syndicated solutions for publishers to grow their audience and advertiser relationships. Publisher solutions include Furl.net, a social bookmarking tool and a private-labeled AdCenter. LookSmart is based in San Francisco, California.

To learn more, please visit: www.looksmart.com.

Related posts brought to you by Yet Another Related Posts Plugin.