6/8 NAVI
NaviSite Third Fiscal Quarter Revenue Grows 376% Year over Year
55% Sequential Revenue Growth, Customer Base Grows 44%
Andover, MA- June 8, 2000- NaviSite, Inc. (Nasdaq: NAVI), a leading provider of managed application hosting services, and a majority-owned operating company of CMGI, Inc. (Nasdaq: CMGI), today announced results for its fiscal 2000 third quarter ended April 30, 2000.
Revenue for the fiscal 2000 third quarter increased 376% to $14.2 million, compared to the same period in fiscal 1999. Sequentially, revenue grew 55% over the second quarter of fiscal 2000. Net loss for the fiscal 2000 third quarter was $16.4 million or $0.29 per basic share. This compares to a net loss of $11.4 million or $0.21 per basic share in the second fiscal quarter. The fiscal 2000 third quarter included a significant ramp up in cost of revenue as expected with the opening and staffing of NaviSite's two new data centers. NaviSite also continued to expand its sales, marketing, development and administrative functions to support this increased rate of growth.
"This has been another quarter of very strong growth, with a record increase in the size of our customer base," commented Joel Rosen, Chief Executive Officer of NaviSite, Inc. "At the same time we laid the foundation for our international expansion through the announcement of strategic alliances with Concert, the AT&T and British Telecom joint venture, and Level 3 Communications."
Major milestones recently achieved by the Company include:
Total customer base increased 44% during the third quarter to 283 from 196 last quarter;
Average annualized revenue per customer increased from the previous quarter to $201,000 from $187,000;
The company increased staff size to 425 from 297 at the end of the previous quarter to support its continued growth;
Subsequent to the end of the quarter, the Company received $50 million in cash proceeds from the private sale of Common Stock to CMGI. The number of shares to be issued is based upon an average of the closing prices of the Common Stock;
The Company also received $30 million in cash proceeds from a sale leaseback of certain of the Company's data center assets;
Continued ramp up in sales staff to 81 from 62 at the end of the second fiscal quarter;
Membership by Web developers and systems integrators in NaviSite's Alliance Development Program increased to 111 in the third quarter from 82 at the end of the second quarter;
Completion of alliance agreements with Xerox Connect, Inc., a wholly-owned subsidiary of Xerox Corporation, and Deloitte Consulting, which will both work with NaviSite to deliver managed services to their Internet-centric and enterprise customers;
A ramp-up in the company's global expansion plans through an agreement with Concert, the AT&T and British Telecom global venture, through which NaviSite will offer advanced application services to Concert's multinational and business customers. The company also signed a global agreement with Level 3 Communications, enabling NaviSite to utilize Level 3 hosting facilities and bandwidth services to provide managed application hosting services and enable Level 3 customers at facilities supported by NaviSite to obtain enhanced management services from NaviSite;
Completion of a two-for-one stock split.
The company also announced today that Bob Eisenberg, President and Director of NaviSite, will be departing the company. "It has been fulfilling to see NaviSite grow as a company, and with the breadth and depth of the management team that is now in place to direct NaviSite's future, the time is right for me to look forward to my next challenge," commented Bob Eisenberg. Mr. Eisenberg joined CMGI in 1996, was instrumental in CMGI's founding of NaviSite in 1997, and oversaw NaviSite's early growth, recognizing the emerging need for a new level of infrastructure, customer support, and application services.
"A key theme for NaviSite is performance. We are operating in a great global market, with a compelling offering, a differentiated service and the very explicit goal of being a leading provider of managed application hosting services," stated Mr. Rosen. "We continue to grow our customer base including independent software vendors, which we expect will generate increasing revenues for us as the vendors ramp up their own customer bases. In addition, we remain committed to the continued growth of our managed application services and the international expansion of our data centers. We have an excellent track record and many superb growth opportunities -- our job is to keep executing."
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That sequential rev growth caught my eye.
Jack |
