Web hosting company Exodus Communications (EXDS) announced slightly better than expected first-quarter earnings on Thursday.
Net loss, excluding goodwill amortization and other charges, was $42.3 million, or 23 cents a share, 3 cents ahead of the consensus estimate of analysts polled by
. Including goodwill and one-time charges, net loss for the quarter was $58.4 million, or 32 cents a share, compared to a net loss of $52.9 million, or 30 cents a share, in the fourth quarter of 1999, and a net loss of $23.2 million, or 14 cents per share, in the year-ago quarter.
The Santa Clara, Calif.-based company said net revenue was $134.1 million, a 346% increase over the year-ago quarter and a 32% increase over the previous quarter. For the first time, Exodus posted an EBITDA (earnings before interest, taxes, depreciation and amortization) profit.
"Given that they launched six new IDCs
Internet Data Centers in the last two quarters, EBITDA profit shows very good management," said
analyst Marlowe Burke. Wit SoundView hasn't done any underwriting for Exodus.
"32% revenue growth for a company of this size is very good," Burke added.
Exodus' customer base grew by 24% in the quarter compared to the previous period. The company added 540 new customers in the quarter, among them
, to reach a total of 2,830. The company continued its global expansion with the opening of a new IDC in Frankfurt, Germany, and plans to open one in Paris and one in Amsterdam this year. Exodus said it continues to host 40% of the world's top Web sites.
Burke said there is ample room for growth for Exodus and other Web hosting companies since only 20% of large enterprises outsource their websites.
Last month, Exodus invested $637.5 million in
Mirror Image Internet
, a subsidiary of
. Mirror Image competes with the likes of
. Both companies reduce online congestion by storing copies of frequently requested Web pages within service provider networks and, thus, closer to end users. Exodus will use Mirror's technology to speed the delivery of the content it hosts.
Also in the quarter, Exodus acquired
, an e-commerce testing company, and the Professional Services Division of
Network-1 Security Solutions
, an Internet security consulting group. The acquisitions increase the range of services Exodus can offer its customers beyond Web hosting. Thursday, Exodus closed down 4 3/16 at 107 11/16. The stock hit a 52-week high of 179 5/8 on March 23.