Jupitermedia Q3 Results

Posted on 11/9/2007 by Jim Pickerell | Printable Version | Comments (0)

Jupitermedia’s Q3 2007 revenues were $34.766 million, up from $33.784 million in the same period last year and from $34.7 million in Q2 2007. Revenues for the Online Images division, which represents 77% of the company’s total business, were $26.824 million, up from $26.177 million in the same quarter last year, but down from $27.383 million in the previous quarter. The decrease was primarily due to lower revenues from third party distributors. Total revenues for the first 9 months of 2007 were up $1.5 million from the first 9 months in the previous year.

While revenues were up almost $1 million for the quarter and $1.5 million for the 9 months, the costs of revenue were up $2.4 million for the quarter and over 7 million for the 9 months.

Jupitermedia's Chairman and CEO Alan M. Meckler stated, “In the third quarter we initiated a rigorous review of our operating expenses that we expect will result in annual expense reductions of $2.0-$3.0 million on a prospective basis. Additionally, we have identified opportunities to streamline various capital projects and content production that we expect will result in a reduction of over $3.0 million in annual cash expenditures. Combined, this restructuring is expected to improve our annual after-tax cash flows by approximately $4.0 million and possibly more."

Three Categories Of Revenue

Jupiter divides the Jupiterimages revenue into three categories: Single Images & CDs, Subscriptions and Distributors & Other. The single image revenue was $13,197, down $369,000 from a year ago and $739,000 from Q2 2007. Revenue in this category has declined almost 8% since its peak of $14.3 million in Q1 2007. This category includes the single images sales of Stockxpert as well as the traditional RM and RF sales.

Given that the RM category has grown 30% in the first 9 months of 2007 and that Stockxpert sales are also growing, revenues from traditional RF sales are definitely in a decline.

Meckler reminded analysts that he had previously indicated that the image division’s growth was handicapped by the growth of microstock. He now believes that the microstock handicap is behind then and that RM, Subscription (particularly Jupiterimages Unlimited) and Stockexpert are in growth mode. Nevertheless, revenues from the image division have been declining slightly, quarter by quarter since a peak in Q1 2007.

Meckler made the point that on a year-over-year basis revenues in the image division increased 2.5%, but that does not take into account the increases in deferred revenues. Deferred revenues result from increased subscription bookings. When a long-term subscription is sold only the proportional share of the revenue that is used in the current quarter is counted as revenue for the quarter. The rest is counted in future quarters as the subscription is used up. Deferred revenue a year ago was $11 million and in the current quarter it was $12.5 million. When the increase in deferred revenues is factored in, the revenues for the image division increased to 9.3% on a year-over-year basis. The deferred revenue was $11 million on Sept. 30, 2006 and $12.8 million on Sept. 30, 2007.

Gross revenue in the subscription category has been growing steadily with $6.8 million in Q1 2007 to $7.049 in Q2 and $7.146 in Q3. The biggest subscription success story is JupiterimagesUnlimited. It has grown over 300% for the first nine months of 2007 compared to the same period last year.

Revenue from distributors was $6.481 million and grew a little over $200,000 from the same quarter a year ago and little less than $100,000 from Q2 2007.

In Q4 2007 Jupitermedia expects revenues of $35 to $36 million and diluted earnings per share of approximately $.02.

For more historic charts see Q1 report.

Copyright © 2007 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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