Listened to the conference call. There is lot to digest.
I think it's quite funny that ATHM has now focused on a growth story, while the market seems now to be looking for value.
At least I'm over the shock from the change in guidance. I felt like I had been sucker punched.
A few notes:
Looks like most of the losses will be incurred in Q2 and Q3 with revenue returning to flat
in Q4. International operations will lose about $0.04 each remaining quarter of 2000 (I'm not sure how much of this will reach ATHM's P&L - see below).
Narrowband revenue's will be flat (explain to me why excite and blue mountain were purchased?)
Bell avoided talking specifics about set top box deployment, saying 2001 will the year of ITV. MSFT is creating the platform (Microsoft CE?).
My opinion is that they avoided talking about self-installs. Maybe they didn't want that 30% number thrown in their face.
Revenue guidance for 2000 is unchanged. ATHM is expecting lower revenue from ad/e-commerce. Did not mention subscription fees going down.
Bell mentioned long range margin goals are unchanged. However, the 2002 targets have been changed from 30-35% to 20-25%.
Revenue, which was seen to be about 50/50 split between subscription fees and ad/e-commerce, will tilt more towards subscription fees.
International subscriber numbers are not included in the new subscriber projections given (3,6,10). So expect upside in revenue, but not necessarily in earnings.
Notes on network:
@work division will make content delivery into a business, by providing direct access of ATHM's backbone to content providers.
ATHM expects a significant "hunk" of the market, estimated at a billion dollars in a "couple" of years.
Will explore the possibility of connecting ATHM's backbone to akamai and ibeam.
Will wholesale connectivity to other isp's after open access.
Notes on International:
Buying back stakes from JV partners
Metrics
13 million homes passed as of Q1
20 million at end of 2000
50 million by end of 2003
150,000 subscribers 2000
2 million subscribers 2003
Revenue 13.5 million Q1
Other international data or notes:
80 million in revenue in 2000 -> Expect 60 million to make into ATHM's P&L.
Profitability will be reached in 2003.
ATHM expects international revenue to be 25% of all revenue in 2003.
ATHM's international metrics are similar to lycos europe, which has a market cap of 4 billion.
ATHM@Japan has been valued at 1 to 2 billion. ATHM owns 67% of this.
ATHM@Europe may ipo at end of year
ATHM@Japan will ipo at end of year |
