someone just shoot me now...we cant even meet estimates.
Excite@Home Reports First Quarter 2000 Financial & Operating Results
Cable Modem Subscribers Grew 30% To 1.5 Million Broadband Footprint
Reaches 87 Million Homes
REDWOOD CITY, Calif., April 19, 2000 - Excite@Home today reported first
quarter 2000 revenues of $138.0 million, an increase of 75% compared to pro
forma revenues of $78.7 million in the first quarter of 1999. Pro forma results
combine the historical results of Excite, Inc. and At Home Corporation, which
merged on May 28, 1999.
Pro forma loss for the quarter was $4.6 million, or $0.01 per share, compared
to a loss of $6.0 million, or $0.02 per share, in the first quarter of 1999. Pro
forma loss for the quarter excludes net expenses of $671.9 million for the
amortization of goodwill and other intangible assets, as well as the cost and
amortization of distribution agreements and certain other non-operational
gains and expenses.
In the first quarter Excite@Home's residential broadband subscriber base
grew by approximately 350,000 net new subscribers to 1,500,000, an increase
of 30% from 1,150,000 at year-end 1999. Total subscribers are up more than
220% from March 31, 1999.
Commenting on the quarter, Excite@Home president and CEO George Bell
said, "This was our best quarter ever for broadband subscriber growth-the
most important measure in defining broadband leadership. In addition, with the
launch of @Home 2000, our leadership now extends to the delivery of
broadband content, fulfilling the vision of the merger between Excite and
@Home.
"We are determined to grow these two key opportunities-broadband access
and media-as quickly as possible by driving subscriber growth and by building
compelling content and applications into our broadband media service," Bell
added. "Securing long-term relationships with our largest cable partners, plus
the addition of 15 million new homes to our footprint through our DSL deal with
Rhythms, allows us to take a longer-term view of our growth opportunities."
Excite@Home chairman Tom Jermoluk added, "The new distribution
agreements with our largest cable partners, AT&T, Comcast and Cox, prove
that we are in the broadband race for the long run, and that we are critical to
our partners' success in rolling out broadband services. The agreements put
us and our partners in position to drive robust growth through the delivery of
broadband on a global scale."
Broadband Subscription Services
@Home Consumer Broadband Service
Excite@Home's addressable market for residential broadband services grew
in the first quarter to approximately 26 million upgraded cable homes passed,
up approximately 75% from 15 million homes a year ago. Excite@Home's
1,500,000 broadband subscribers represent a penetration rate of 5.7% of the
upgraded footprint, up from 4.8% last quarter and 3.1% a year ago. Subscriber
and addressable-market figures include areas served by Excite@Home
affiliates that are currently being converted to the @Home service.
Excite@Home's global broadband footprint now totals 87 million homes under
contract with 20 cable partners plus Rhythms NetConnections, a leading
provider of high-speed access through digital subscriber line services.
Excite@Home and Rhythms recently announced an agreement for
Excite@Home to offer broadband access and content services via DSL to
consumers in 15 million homes located outside of Excite@Home's cable
footprint. The service, to be launched later this year, will utilize
Excite@Home's existing broadband network, including its 15,000-mile
fiber-optic backbone and its distributed array of regional high-speed transport
and data-caching facilities. Subscribers will have access to the @Home 2000
service, including Excite broadband content, currently available to
Excite@Home's cable modem subscribers.
@Work Business-to-Business Services
Excite@Home's commercial services division, @Work, continues to pursue
its strategy of leveraging the Excite@Home network to provide connectivity
and value-added services to businesses. @Work provides high-speed access
to businesses, with total accounts activated exceeding 6,200 as of March 31,
2000, up from 5,100 last quarter and 2,300 a year ago. As an extension of its
strategy, @Work offers Internet content providers access to the
Excite@Home network. Earlier this month @Work and Equinix, Inc.
announced an agreement under which Equinix data centers, which house
content providers and e-commerce companies, will be connected directly to
the Excite@Home network. The deal places the content and applications of
Equinix's customers within easier reach of Excite@Home's 1.5 million
broadband subscribers, enhancing the broadband subscriber experience and
representing an incremental source of revenue to @Work.
Broadband Network Traffic Growth
Traffic on Excite@Home's broadband network is expanding rapidly as the
base of residential and commercial broadband subscribers grows and as
broadband subscribers continue to generate significantly more traffic than
typical narrowband ISP users. Excite@Home's broadband subscriber base
now generates an average of more than two gigabits of traffic per second
through public and private Internet peering points, with peak traffic reaching up
to five gigabits per second. This backbone traffic actually represents less than
half of all traffic generated by Excite@Home's broadband subscribers, as the
majority of broadband traffic is contained within Excite@Home's regional
networks through the use of caching and distributed content feeds.
Media and Marketing Services
On April 4, 2000 Excite@Home launched @Home 2000 to all of its broadband
subscribers in the U.S. @Home 2000 combines a software package designed
for broadband-including a customized browser, the latest multimedia plug-ins
and a suite of security features from McAfee.com-with a completely new
version of the Excite portal that is optimized for broadband. @Home
broadband customers now have access to the breadth and depth of
information and services available through Excite, including Excite's
award-winning personalization capabilities, in addition to a wealth of
multimedia content made possible by the speed of a broadband connection.
Traffic on the Excite Network, which includes Excite@Home's broadband and
narrowband media properties, rose to 144 million average daily page views in
March, an increase of 17% over December 1999 and 85% over March 1999.
Cumulative registrations to Excite services totaled 64 million as of March 31,
2000, up from 51 million last quarter and 28 million a year ago. The Excite
Network remains among the top five web media networks with over 30 million
unique users, or 42.9% of all web users, in February according to Media
Metrix. These measures exclude Excite@Home's broadband subscribers,
which are not metered by Media Metrix.
Growth in traffic was driven by Excite.com as well as recently acquired
properties Excite's Bluemountain and Excite's Webshots. Bluemountain.com
remains the leading provider of online greeting-card services, with 16.6 million
unique users in February according to Media Metrix. Bluemountain.com
customers sent over 125 million electronic greeting cards during the first
quarter, including 55 million in the month of February, which generated over
100 million page views on Valentine's Day alone.
Digital Marketing Services
Excite@Home's media properties serve the dual purposes of revenue
generation through advertising sales and broadband subscriber acquisition
through online marketing of the @Home service. MatchLogic, Excite@Home's
advertising services subsidiary, uses its databases of anonymous user and
permission-based e-mail profiles to deliver banner and e-mail ads. MatchLogic
delivered 22 billion banner ad impressions and 57 million targeted e-mail
marketing messages during the first quarter, increases of 40% and 12%,
respectively, over the fourth quarter of 1999.
Online marketing channels generated a total of nearly 70,000 qualified
subscriber leads in the first quarter. Approximately 50% of these leads were
converted to @Home subscribers in the first quarter. Excite@Home's free ISP
offer, FreeLane powered by Excite, has been a particularly effective source of
subscriber leads. The service has generated over one million downloads and
500,000 active subscribers since its introduction in January, with about 2,000
subscribers per month converting to broadband as of March.
International Services
Excite@Home's international efforts continue to parallel its focus in North
America on building integrated content and broadband access services.
Excite@Home currently has a broadband footprint of 13 million homes passed
outside of North America in five countries-the Netherlands, Belgium, Australia,
Japan and Germany-as well as approximately six million homes passed in
Canada. Excite content services are available in five of these six countries, as
well as six other countries outside the U.S.
During the first quarter Excite@Home consolidated its operations in Australia,
merging Excite Australia and @Home Australia with the intention of offering
Excite-branded content to Australian broadband customers. The @Home
broadband service was launched in Australia in January. Service is currently
available to trial customers in Japan, with a commercial launch expected
during the second quarter of 2000. During the first quarter Excite@Home
increased its ownership in Excite Japan to approximately 67%.
Year 2000 Financial Outlook
In addition to its first quarter results, Excite@Home announced today its
expectations for financial and operating performance for the remainder of 2000
and beyond. The Company stated that its goals are to have a total of at least
three million residential broadband subscribers by the end of 2000, growing to
six million subscribers by the end of 2001 and ten million subscribers by the
end of 2002. The Company also stated that it is intensifying its investment
efforts outside North America in an effort to capitalize on the growth of
broadband access and media services abroad. As a result of these
international investments and increased marketing and network investments
intended to support an accelerated rate of broadband subscriber growth, the
Company expects to incur operating losses in 2000 totaling between $0.25
and $0.30 per share for the full year. These losses exclude the amortization of
goodwill and other intangible assets, as well as the cost and amortization of
distribution agreements and certain other non-operational gains and
expenses. The Company also stated that its goal is to achieve annual
revenues in excess of $2 billion by 2002 and that it intends to achieve
long-term profitability.
Cautionary Note Regarding Forward-looking Statements
This press release contains forward-looking statements that involve risks and
uncertainties, including those relating to the Company's financial outlook for
future periods and its goals for the growth of its broadband subscriber base;
the timing for introducing new services; and the degree of acceptance for the
Company's DSL-based offering. Actual results may differ materially due to a
number of factors, including the rate of increased spending to stimulate growth
in broadband subscribers and expand international operations; the
effectiveness those efforts, which cannot be assured; of the increasingly
competitive environment for Internet advertising sales and e-commerce
services, which can be expected to limit the growth of media revenues; the
Company's dependence on the actions of its cable partners to upgrade the
cable plant and market and install the @Home service; the Company's ability
to successfully integrate its acquired companies; the Company's ability to
successfully expand its online marketing programs; and the Company's ability
to expand its international operations and relationships. In addition, certain
transactions described in this press release, such as the restructuring of the
Company's relationships with its principal cable partners, are contingent upon
the parties' success in executing definitive agreements and/or obtaining
corporate approvals, and there can be no assurance that such transactions
will be completed. Reported results should not be considered as an indication
of future performance. In particular, Excite@Home anticipates that its
increased investments designed to stimulate growth of its broadband
subscriber base and to expand its international activities will result in
operating losses for the current year. The matters discussed in this press
release also involve risks and uncertainties described in Excite@Home's
filings with the Securities and Exchange Commission. Excite@Home
assumes no obligation to update the forward-looking information contained in
this press release.
About Excite@Home
Excite@Home, the leader in broadband, offers media services through the
Excite Network (www.excite.com, www.bluemountain.com and other
properties), and broadband subscription services through @Home
(www.home.com) and @Work (work.home.net). The company has a
worldwide footprint of 87 million broadband homes under long-term contract.
Excite@Home's MatchLogic division (www.matchlogic.com) offers marketers
industry-leading digital advertising capabilities including rich media production,
ad and email services, and database analysis all integrated into a complete
solutions package. |
