October 23, 2001 16:20
InfoSpace Reports 3rd Quarter Financial Results
BELLEVUE, Wash.--(BUSINESS WIRE)--Oct. 23, 2001--
Revenues were $33.1 million; Wireless revenues from the U.S. and
Europe grew more than 6% over last quarter; Merchant services
processed more than $700 million in transactions
InfoSpace, Inc. (Nasdaq:INSP), a provider of wireless and Internet software and application services, today announced third quarter revenues of $33.1 million and a pro forma net loss of $0.03 per share.
Key financial and operating metrics:
-- Wireless and Merchant Services continue to offer the greatest
growth potential and now represent more than 50% of revenues.
-- Wireless revenues from the U.S. and Europe grew more than 6%
over last quarter.
-- Registered wireless subscribers continue to demonstrate good
growth as numbers increased to more than 3.75 million.
-- InfoSpace's merchant services continues to show solid growth
as dollars processed grew to more than $700 million, up from
$600 million reported last quarter. Number of transactions
processed grew to more than 9 million, up from 8 million
reported last quarter.
-- Balance sheet remains strong with no debt. InfoSpace has cash,
investment grade securities and a payroll tax receivable of
$323 million. In addition, the Company has investments in
private and public securities of $64 million.
-- Net cash used in operations was $3.6 million. In the last six
months, InfoSpace only used net cash total of $5.1 million in
operations.
-- Key deals in the quarter include new agreements with Verizon
broadband and dial-up, Wells Fargo, Union Bank of California
and Dydacomp, an extended agreement with Vodafone Australia
and the launch of new services with Virgin Mobile U.K.
"InfoSpace's performance this quarter underscores our continuing success in focusing on our high growth areas of wireless and merchant. We benefit from our strong position in these markets as evidenced by the more than 6% growth in our wireless revenues from the U.S. and Europe and the 15% growth in our merchant transactions processed," said Naveen Jain, chairman and CEO. "Our ability to grow our recurring revenue streams and control costs across the board enable us to stay at the leading edge of our markets and take advantage of our growth opportunities."
Wireless
InfoSpace's Wireless Services business continues to show momentum and new levels of innovation in the developing wireless services industry. By the end of the third quarter, more than 3.75 million wireless subscribers registered for services powered by InfoSpace's platform and applications with more than 20 wireless carriers globally.
"Wireless continues to be one of our areas with the greatest growth potential. Wireless technology is rapidly evolving and services are becoming more accessible to people around the world. Growth is evident in our wireless efforts in the U.S. and in Europe. We had record revenues in the second quarter for SMS in Europe due to the extension of contracts with existing carrier partners such as Libertel and Virgin Mobile, and to the overall increasing demand for SMS in Europe," said Jain. "We see the emphasis moving from the carriers' focus on airtime, coverage and access to one that is driven by developing closer relationships with their users by tailoring services to fit their needs and lifestyles as evidenced by more than 20 leading carriers around the world choosing InfoSpace to partner with them."
During the third quarter the company deployed new wireless services for several industry-leading carrier partners and announced the availability of new technologies and services enabling the delivery of innovative new services over mobile devices. InfoSpace also announced that the company had been awarded a new patent protecting key components of InfoSpace's technology portfolio.
InfoSpace continues to enhance its wireless services platform with new technologies designed to enable InfoSpace's carrier partners to leverage their existing infrastructure to deploy new services and drive additional revenue, as well as to help them leverage the extended capabilities of more advanced networks for the delivery of advanced services.
In the third quarter, InfoSpace and Virgin Mobile U.K launched a broad new range of SMS and WAP-based services built on the InfoSpace platform. The new services build on the existing relationship between InfoSpace and Virgin Mobile.
Since Virgin Mobile first announced the launch of mobile data service built on InfoSpace's wireless technology platform in February of 2001, Virgin's offering has rapidly grown to become one of the leading mobile Internet services in the U.K. According to a recent article in the U.K.'s Mobile Choice magazine, the VirginXtras SMS service was deemed to have the strongest offering, particularly for sports services, of all those offered by U.K. mobile operators.
In the U.S., InfoSpace launched a new major league baseball SMS-based alerts service with leading carriers including Verizon Wireless, Cingular Wireless, ALLTEL and Cincinnati Bell Wireless. The new service is the second deployment, after a successful March Madness alerts campaign earlier this year, of InfoSpace's initiative to provide carrier partners with special alert campaigns around seasonal and one-time events.
These services offer carriers an opportunity to drive more traffic, acquire new subscribers and enliven their services with timely, exciting campaigns. InfoSpace carrier partners who deployed InfoSpace's March Madness alerts program saw alerts usage increase by as much as 58 percent.
Just this week, InfoSpace announced an agreement to integrate personalized ringtones and phone graphics into its platform, provided by YourMobile/PWS. The new agreement demonstrates the flexibility of the InfoSpace platform in enabling the integration of third party services and applications. The ability to tightly integrate third party services into the InfoSpace platform enables carriers to deliver differentiated mobile services that offers a seamless user experience and is easier and more cost effective for the carrier to manage and operate.
Looking ahead, InfoSpace believes the two wireless technologies best positioned to enhance the capabilities of wireless data services are next generation network technologies such as GSM GPRS (General Packet Radio Service) and CDMA 1xRTT, and advanced 2-way SMS.
In the third quarter InfoSpace carrier partners Verizon Wireless and Cingular Wireless announced that their wireless networks in certain key markets has been upgraded to 1xRTT and GPRS technologies, respectively. InfoSpace continues to develop key technologies to help its carrier partners to take full advantage of these as well as other next generation wireless technologies.
SMS technology is also developing and gaining wider adoption, particularly in North America. Until recently, wireless carrier networks in North America were only capable of handling one-way, or `push' SMS services. Now, two-way SMS technology is becoming more commonplace in the U.S. AT&T, Verizon and several others have launched two-way SMS so far this year.
In Sept., InfoSpace announced the availability of speech-enabled SMS Alerts. Speech-enabled alerts enable carrier partners to roll out new and exciting services that drive additional usage and revenue over their current generation network infrastructure. Speech-enabled alerts allow users to configure one-way SMS alerts using their voice, eliminating the need to provision the alerts using a PC or WAP-enabled phone. This will make alert services available to the millions of owners of legacy phones that do not have WAP browsers or two-way SMS capability, providing carriers with increased revenue opportunities and an opportunity to facilitate the migration of legacy users to more advanced handsets and services.
InfoSpace also announced earlier this month that it had been awarded a new patent for location-based services. The new patent protects key components of the technology behind the location-based services component of InfoSpace's wireless platform. This new patent is in addition to four others previously awarded for its mobile commerce and infrastructure technologies and the more than 50 patents pending.
Merchant
Merchant Services continues to demonstrate solid growth due to increased transactions processed, new merchant sign ups and new reseller agreements. During the second quarter more than $700 million in transactions were processed through InfoSpace's commerce services. Also, InfoSpace continues to see strong growth in the number of transactions processed. The number of transactions processed grew to 9 million, up from 8 million reported last quarter.
Additionally, InfoSpace announced the company signed up a record number of new merchants to process transactions on the Authorize.Net(TM) payments platform in Aug.
InfoSpace also showed strong momentum in its strategy to offer the platform enabling financial institutions, independent sales organizations (ISOs) and resellers to roll out payments services to customers under their own brand. During the third quarter, InfoSpace announced that it would power payments solutions for Wells Fargo Bank and Dydacomp, a leading provider of multi-channel catalog management and e-commerce software. In addition, InfoSpace announced that it signed an agreement to power a new payments solution for Union Bank of California.
Wireline
InfoSpace's Wireline Services business continues to focus on enabling narrowband and broadband companies to offer network-based services under their own brands. During the quarter more than 4.3 billion queries, or requests, were made to InfoSpace's wireline services.
A solid example of traction in the broadband space was Verizon Online's selection of InfoSpace's platform to deliver a comprehensive set of broadband and dial-up applications and services for the Internet service provider's dynamic new destination pages. The first phase of Verizon Online's destination pages launched as scheduled in mid-September (http://start.verizon.net), and will include new services and applications, with more to come over the coming months.
Corporate
During the quarter, InfoSpace completed a buy back of approximately 21.7 million shares that decreased the number of shares outstanding.
Also, during the quarter InfoSpace added two new senior managers to the InfoSpace management team. Jan Claesson joined the Company as executive vice president, wireless, and York Baur, as executive vice president, wireline and broadband. Claesson and Baur, both former Microsoft Corporation executives, bring more than 35 years of senior management experience to InfoSpace.
InfoSpace also announced the appointment of Gen. Richard D. Hearney to its Board of Directors. Hearney, a highly decorated retired Marine Corps officer, brings a tremendous amount of business and general management experience to InfoSpace. Hearney also served as vice president, business development of Western Europe for McDonnell Douglas Corporation. Hearney is currently president and CEO of Business Executives for National Security (BENS), a non-partisan organization of business leaders who apply lessons of their successful businesses to making our country safer and more secure.
Deloitte & Touche, one of the nation's leading professional services firms, awarded InfoSpace the 2001 Washington State Technology Fast 50, a ranking of the 50 fastest-growing technology companies in Washington State, which ranks qualified companies based on five-year percentage revenue growth from 1996-2000. During this period, InfoSpace's winning five-year percentage revenue growth was 107,704 percent. Larry Hile, partner for Deloitte & Touche, said, "With its dramatic increase in revenue, InfoSpace has shown it has the vision, drive, and determination to come out on top." InfoSpace's Fast 50 representation makes the company eligible to be included in the national Technology Fast 500, a ranking of the 500 fastest-growing technology companies across the U.S. Finalists for the Fast 500 will be announced later this fall and the final ranking will be announced Dec. 3 in Forbes ASAP magazine.
To drive continued growth, InfoSpace has reorganized the Company to reflect its decision to align its engineering resources along business lines. This focused product approach will allow InfoSpace to reduce its work force by approximately 200 positions.
Note: InfoSpace has scheduled a conference call for 2 p.m. PT to discuss third quarter 2001 financial results. Interested parties may access a live broadcast of the conference call over the Internet through the Company's website at www.infospace.com in the Investor Relations section.
A replay of the conference call will be available in the Investor Relations section of the Web site www.infospace.com approximately one hour after the call until Friday, Oct. 26 at 6 p.m. PT.
About InfoSpace, Inc.
InfoSpace, Inc. (Nasdaq:INSP) provides an integrated technology platform and suite of applications that enable partners to deliver consumer and commerce services across the Internet to any device over current and next-generation wireless, broadband and narrowband networks. The Company's array of products includes consumer services, such as communication, entertainment, gaming and speech applications, as well as commerce services, including payments, promotions and shopping. Together, the InfoSpace platform and applications comprise a highly flexible and scalable end-to-end solution that can be rapidly deployed under a partner's brand. InfoSpace's partners and affiliates include leading companies worldwide, such as Verizon, AT&T Wireless, Cingular Wireless, ALLTEL, Virgin Mobile, Charles Schwab, Intel, Lucent, Nortel, AOL, Microsoft, Lycos, NATIONAL DISCOUNT BROKERS and Bloomberg, among others.
This release contains forward-looking statements relating to the development of InfoSpace, Inc.'s products and services and future operating results, that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect InfoSpace's actual results include the progress and costs of the development of our products and services and the timing of market acceptance of those products and services. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in InfoSpace's Annual Report on Form 10-K, in the section entitled "Factors Affecting Our Operating Results, Business Prospects and Market Price of Stock." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. InfoSpace undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. |
