Here's the whole shabang......Company Press Release
America Online, Inc. FY2000 First Quarter Fully Taxed Income More Than Triples to $184 Million, or $0.15 Per Share
First Quarter Revenues Climb 47% to $1.5 Billion
DULLES, Va.--(BUSINESS WIRE)--Oct. 20, 1999-- Subscription Revenues Reach Nearly $1 Billion and
Advertising, Commerce, and Other Revenues Double to $350 Million
AOL Service Sets First Quarter Record with Nearly
1.1 Million Net New Members
America Online, Inc. (NYSE: AOL - news) today announced results for the first quarter of fiscal 2000 ended September 30, 1999 -- setting new records for consolidated revenues, advertising and commerce revenues, operating income, and membership growth in the first quarter.
The Company's fully taxed net income totaled $184 million, or $0.15 per diluted share, up from $50 million, or $0.04 per diluted share, on the same basis in fiscal 1999's first quarter. Operating income for the quarter climbed 244% over the year ago quarter to $265 million.
First quarter revenues rose to $1.5 billion, or 47% over last year's first quarter, and advertising, commerce, and other revenues reached $350 million, doubling over the fiscal 1999's September quarter.
The AOL service set a record for first quarter membership growth, adding nearly 1.1 million net new members worldwide. In addition, the Company's new CompuServe 2000 emerged as the fastest-growing brand in the value segment, adding 378,000 members to close the quarter at a total of 575,000 subscribers.
At September 30, the Company had a worldwide total of 18.7 million AOL and 2.2 million CompuServe Classic and CompuServe 2000 members.
America Online's multiple Web-based brands posted strong gains in registrations, and the Company ended the quarter with over 45 million net registered users of ICQ, nearly 70 million of AOL Instant Messenger (SM) (AIM) including the AOL service's Buddy List feature, and 20 million of Netscape Netcenter.
The reported earnings per share, without adjusting for the fully taxed methodology, increased 142% to $0.14 per share on $184 million of net income, compared to $0.06 per share on $76 million of net income in last year's first quarter.
Industry Leadership and Growing Earnings Power
Steve Case, Chairman and Chief Executive Officer of America Online, said: ``This quarter's results clearly demonstrate America Online's leadership and growing earnings power. Our core AOL service is becoming more and more central to our members' lives, and we are achieving added growth through our expanding roster of interactive brands, which now reach eight out of ten US Internet users.
``Approaching the Internet century, we see new opportunities for AOL to extend its leadership in the emerging world of multiple devices and high-speed access networks.'
Bob Pittman, President and Chief Operating Officer, said: ``Our growth is accelerating across the board. While continuing to improve and extend the AOL brand, we are making full use of our strategic advantages to accelerate the growth and profit contribution of our other brands including CompuServe, Netscape, and ICQ.
``We are confident that new services, products and initiatives across our brands will continue to build our success in all meaningful markets for interactive services.'
Key operating metrics from the quarter included:
Subscription Revenues: Quarterly subscription revenues reached $995 million, up from $723 million during fiscal 1999's corresponding quarter.
AOL Member Usage: AOL members are averaging 55 minutes daily online, an increase of 8 minutes over last year's first quarter.
Advertising, Commerce and Other Revenues: Revenues from advertising, commerce and other revenues climbed to $350 million, doubling from $175 million during the year ago quarter.
Backlog: The Company brought its consolidated backlog of advertising and commerce revenue to over $2.0 billion at the end of the quarter, adding a net of more than $500 million since June 30, 1999.
Sales and Marketing Expenses: Consolidated sales and marketing expenses declined to 14.2% of revenues, compared with 17.4% in fiscal 1999's first quarter.
Operating Income: Operating income jumped 244% to $265 million or 18.1% of revenue, up from 7.7% a year ago.
EBITDA: EBITDA rose to a record $386 million for the quarter, a 152% increase over a year ago, and EBITDA margins increased to 26.3%.
Cash Flow from Operations: Cash flow from operations increased to $472 million, a nearly fourfold increase over fiscal 1999's corresponding quarter.
Interactive Services Group Highlights
Earlier this month, the Company launched worldwide its next generation software, AOL 5.0, a complete package of features and services to make the AOL service even more central and valuable to people's everyday lives.
Just two weeks after its official launch, AOL 5.0 has been downloaded by 3.6 million members, and of these, nearly 1.9 million have taken advantage of its new My Calendar feature to create their personal online calendars.
In support of the launch of 5.0, AOL is distributing millions of free CD-ROMs through the mail and, for the first time, in up to 5,000 retail outlets nationwide. Plus, AOL's new You've Got Pictures feature is being supported by more than 38,000 Kodak dealers.
In a new research study by The Meyers Group, America Online was named the most sought-after media company in today's advertising/marketing world. Nearly two-thirds of marketing leaders surveyed expressed interest in developing long-term relationships with AOL, outranking 46 other media companies.
Extending its AOL Anywhere strategy to other connected devices, the Company launched AOL 5.0's AOL Mail on Palm Pilot service, and, last week, AOL and Motorola announced a strategic alliance that will introduce ``real-time' communications next year between users of Motorola's wireless communications devices and AOL Instant Messenger and the AOL service's Buddy List feature.
Advancing its access to broadband networks, the Company reached an agreement this quarter with GTE to extend DSL service to subscribers in 17 states -- bringing the Company's DSL coverage to nearly three-quarters of US AOL households. And AOL began rolling out DSL service in several Bell Atlantic markets.
AOL's content and commerce channels have already become the leaders in various categories, and during the quarter, the Company moved aggressively to enhance key commerce and content areas through strategic alliances and partnerships, including:
Healthcare: Complementing its multi-million dollar agreement with drkoop.com, AOL reached key agreements with CareInsite, Inc. and Medscape, Inc. that further build out its comprehensive offering to address all phases of healthcare.
Travel: Significantly enhancing the travel offering on AOL and other brands, Travelocity.com, upon closing its merger with Preview Travel, will provide the exclusive reservations engine, as well as new services, into the AOL service, AOL.COM, CompuServe, Digital City, and Netscape, in an alliance valued at up to $200 million.
Personal Finance: CBS MarketWatch.com will become the premier provider of business and financial news on AOL's Personal Finance Channel -- cyberspace's leading personal finance destination, where traffic has increased 81% over the same time last year and stock quotes now total 151 million daily.
Significant developments with AOL's other brands include:
The Company's value brand, CompuServe 2000, emerged as the fastest-growing brand in this market segment during the quarter. CompuServe 2000 is continuing this momentum by extending its PC rebate program through the holiday season, and upgrading the service to the cost-effective AOL 5.0 platform.
In addition, CompuServe expanded its Custom Solutions alliances with new agreements to create customized services for AAA, Thomas Regional Directory, and Continental Airlines.
The worldwide community of AOL Instant Messenger (AIM) and the AOL service's Buddy List climbed to nearly 70 million registrants by the end of the quarter, including AIM's new reach through alliances with IBM's Lotus Notes and Sametime, RealNetworks, Apple, Lycos, Novell, Earthlink, Mindspring, Juno, CompuServe and Netscape.
In August, the Company introduced AIM 3.0 to provide a full package of exciting next-generation communications tools.
This week, Netscape Netcenter surpassed 20 million registrants worldwide. The portal site focused on the daytime/work audience also experienced a 400% climb in the adoption rate for the My Netscape personalization service while the use of Netscape's Internet Keywords tripled over the past year.
In addition, during the quarter, the Company launched Netscape Communicator (R) 4.7, the latest version of Netscape's award-winning Internet browser and e-mail software. And the Netscape Open Directory Project, which powers the all-new AOL Search(SM) feature on the AOL service and AOL.COM, recently exceeded one million Web sites from more than 16,000 active contributors.
Interactive Properties Group Highlights
ICQ, which has emerged as one of the leading international Internet services, added a record 7.6 million new registered users this quarter. Of ICQ's 45 million registered users, two-thirds are based outside the US. ICQ also experienced increased average daily usage -- rising to nearly 3 hours on the desktop and over an hour in active use.
Helping to drive this increased usage, the ICQ service continued to add new functionality during the quarter, including e-mail, search, and enhanced communications features. Also during the quarter, ICQ started developing advertising and commerce opportunities through selected partners including eBay, AmericanGreetings.com, and Net2Phone.
Strengthening its lead as the No. 1 local online network, Digital City this week announced plans to expand its reach from 60 cities to more than 200 cities nationwide by Spring of 2000.
AOL MovieFone continued its growth as the nation's largest movie listing guide and ticketing service with listing information for over 20,000 US screens. This quarter's user sessions climbed 20% over the June quarter, and the tickets sold increased more than 50% over the year ago quarter.
In addition, the Company partnered with Radiant Systems to deploy the MovieFone service on Radiant theater point-of-sale devices, dramatically expanding the number of movie theaters that MovieFone can ticket.
The Company successfully integrated its recently acquired online music companies, Spinner and Winamp, and each has continued to maintain its product leadership with rich new client releases in this quarter. Together, Spinner and Winamp have the #1 market share in online music.
These music brands have substantially deepened the Company's music capabilities, as evidenced by the launch of Netscape Radio in the new Netscape Communicator (R) 4.7.
AOL International Highlights
In addition to the continued international expansion of ICQ, AOL International continued to move forward during the quarter to strengthen and expand the Company's international services.
Last month, the Company launched AOL Hong Kong -- the newest member of the AOL global community -- in partnership with China.com Corporation, the leading pan-Asian integrated Internet service company, and its affiliate China Internet Corporation (CIC).
AOL Europe, the Company's joint venture with Bertelsmann, showed significant growth during the quarter, with AOL Germany surpassing one million members last week, the first AOL service outside of the US to achieve that milestone. Launched in 1995, AOL Germany took half the time to reach the one-million-member mark that the AOL service did in the US
To continue its growth momentum, AOL Germany also introduced a new pricing plan, offering members a flat monthly rate for unlimited access to AOL and the Internet, lower telephone connection fees, and simplified online billing. A new advertising campaign featuring tennis champion Boris Becker is promoting the new plan.
In the UK during the quarter, AOL Europe launched Netscape Online, a subscription-free service aimed at the value-conscious segment of the consumer market. And, last month, AOL Europe introduced the 'AOL Off-Peak All The Time' pricing plan in the UK that frees members to go online day or night for the same low Internet telephone access cost of just one pence per minute.
The Royal Bank of Canada acquired a 20 percent equity stake in AOL Canada and, with its US subsidiaries Security First Network Bank and Bull & Bear Securities, the bank entered into interactive marketing agreements across AOL properties in the US and Canada.
In addition, AOL Canada announced an agreement with Regional Cablesystems in September to introduce high speed broadband access over cable this Fall.
Around the world, localized versions of AOL 5.0 will be rolling out in Australia, Canada, France, Germany, Japan, and the UK throughout the Fall. These versions will also be accessible by AOL members in Austria, Switzerland and Sweden.
Netscape Enterprise Group Highlights
During the quarter, the Sun-Netscape Alliance, the Netscape Enterprise Group's strategic alliance with Sun Microsystems for iPlanet Internet infrastructure and e-commerce solutions, announced new agreements with Chase Manhattan, Cutler Hammer, Adelphia Cable, Argentaria, ExpenseVision, Telecom New Zealand and National Discount.
The Alliance also launched a number of new products to help businesses thrive in the fast-growing Net Economy, including Netscape Application Server 4.0, iPlanet Web Server 4.0, ECXpert 3.0 and BuyerXpert 3.0.
The Alliance now sells to and supports a customer base of more than 7,000 companies that deploy iPlanet software to run their Internet businesses. The Alliance powers 40 percent of the 50 most trafficked Internet sites, and its customers represent more than half of the Fortune 100 companies' software solutions.
About America Online, Inc.
Founded in 1985, America Online, Inc., based in Dulles, Virginia, is the world's leader in interactive services, Web brands, Internet technologies, and e-commerce services.
America Online, Inc. operates: two worldwide Internet services, America Online, with more than 18 million members, and CompuServe, with more than 2.2 million members; several leading Internet brands including ICQ, AOL Instant Messenger and Digital City, Inc.; the Netscape Netcenter and AOL.COM portals; the Netscape Navigator and Communicator browsers; AOL MovieFone, the nation's No. 1 movie listing guide and ticketing service; and Spinner Networks and NullSoft, Inc., leaders in Internet music. |
