TheStreet.com Posts Record Quarterly Revenue - TheStreet

TheStreet.com Posts Record Quarterly Revenue

Ad revenue increases 48%. Second-quarter net income is $3.6 million, compared with $3.2 million a year earlier.
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Updated from 7:31 a.m. EDT

TheStreet.com Inc.

(TSCM)

said Thursday that a 48% increase in advertising revenue lifted overall second-quarter revenue 20% from the same period a year earlier.

For the quarter ended June 30, TheStreet.com reported record revenue of $14.9 million, up from $12.4 million for the second quarter of 2006. The company's three revenue streams contributed to the increase, with advertising revenue up 48% over the prior year, while subscription revenue rose by 2% and other revenue, comprised primarily of syndication revenue, climbed 197%.

TheStreet.com provides financial commentary, analysis, research, news and financial ratings, and is the publisher of this Web site.

"This quarter further positioned TheStreet.com as a leader in the creation and distribution of a broadening category of financial content," said Thomas J. Clarke Jr., chairman and chief executive officer of TheStreet.com. "Looking forward our customers and advertisers can expect to see ongoing innovations at

Stockpickr.com and TheStreet.com Ratings, the continued evolution of our multimedia offerings, and the relaunch of a completely redesigned TheStreet.com Web site in early 2008. All of these content initiatives reflect our commitment to create additional premium advertising inventory and sponsorship opportunities."

As for earnings, TheStreet.com reported second-quarter net income of $3.6 million, or 12 cents a share, compared with $3.2 million, or 12 cents a share, reported in the same period last year. Non-GAAP earnings for the quarter, excluding stock compensation expenses of $500,000, were 14 cents a share.

Earnings before interest, taxes, depreciation and amortization totaled $3.5 million this quarter, an increase of 15% over last year. EBITDA excluding stock compensation was $3.9 million, an increase of 13% year over year. Free cash flow in the quarter fell to $1.9 million from $2.8 million a year earlier. As of June 30, cash, cash equivalents and restricted cash stood at $50.1 million.

Among the quarter's highlights, TheStreet.com reported a 206% year-over-year increase in nonfinancial advertising revenue in the quarter. Nonfinancial advertising revenue represented 39% of total advertising revenue in the quarter, up from 19% in the second quarter of 2006.

"We had a record 93 advertisers on the site in the quarter, an increase of 33% from last year," said Eric Ashman, chief financial officer for TheStreet.com, speaking on a conference call to investors. "These results reflect the initial impact of our decision to invest in increasing the size of our advertising sales team in

the first quarter."

During the quarter, TheStreet.com hired former

CNBC

producer and National Emmy Award winner Bill McCandless as its first executive editor of multimedia. McCandless has more than 15 years of local and network experience.

The company also acquired the URL www.mainstreet.com to function as a sister site to www.thestreet.com. The interactive site, currently under development, will have an advertising-sponsored revenue model with a lead-generation component and will provide mainstream news in the context of its impact on one's financial life.

The site, expected to launch in early 2008, will utilize a combination of evergreen content and current news, leveraging cross-promotion from TheStreet.com and TheStreet.com sales infrastructure.

Mainstreet.com is not intended to be a subset of TheStreet.com, but rather a "sister" site, with a revenue model that will be advertiser supported," said Clarke.

Additionally, the company's wholly owned subsidiary Stockpickr.com was named as one of 50 Best Websites 2007 by

Time.com

, the online site of

Time

magazine. Of 11 Websites in the News and Information category, Stockpickr.com was the only investing site featured on the list.

TheStreet.com also entered into an exclusive proprietary licensing agreement with

Charles Schwab

to provide monthly articles covering market commentary, technical analysis, stock fundamentals and trading techniques for inclusion in Schwab's online newsletter for active investors.

Other news from the company:

It said it expanded its reach among the nation's college students, signing a deal with The University Network to provide and distribute educational and personal finance video content across a network of high-definition televisions located throughout major campuses. The University Network reaches more than 4.3 million viewers nationwide.

It reached an agreement with Quattro Wireless, under which Quattro will develop and power TheStreet.com's upcoming mobile Web site, located via Internet enabled phone, at www.thestreet.com. The mobile site will provide users with TheStreet.com content, including video and market updates throughout the day.

It announced an expanded arrangement with Entrepreneur.com that will allow content sharing across each respective site. TheStreet.com will provide Entrepreneur with market and finance content, while Entrepreneur.com will provide Small Business content to be hosted at TheStreet.com.

It launched three new features on Stockpickr.com since it acquired it in April: StockBlogr is the first blog search engine devoted to accessing the top financial blogs on the Internet that offer investment advice, information about specific stocks and trading strategies; Street Answers, a free interactive search platform available at www.thestreet.com and www.stockpickr.com, that allows anyone to ask questions about stocks and investment ideas. In response, professional and self-directed money managers, traders and investors, who make up TheStreet.com's social networking community, share their research.

And Stockpickr Portfolio Ratings, free independent portfolio ratings that are available for the first time on all portfolios on Stockpickr.com by letter-grade, based on an average of the ratings of the individual stocks within the portfolio. Linked to TheStreet.com Ratings, portfolios within Stockpickr.com are rated with TheStreet.com's proprietary statistical models that use key financial metrics and indicators to rate stocks, for an overall quality score.

The board of directors also declared the company's quarterly cash dividend, payable to all shareholders of record at the close of business on June 15. The cash dividend of 2.5 cents a share was paid June 29.

Clarke also indicated that the company would likely be making accretive acquisitions in the next few months.