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Health Grades ( HGRD) reported on April 23, 2009 that its Q1 FY09 earnings increased 41.5% year-over-year on higher revenues, boosted by strong performances by its Internet and Provider Services business groups. Net income attributable to the company rose to $1.64 billion or $0.05 per share from $1.16 billion or $0.03 per share in the previous year's quarter. The latest quarterly earnings were in line with the most recent consensus estimate.

Total revenue surged 35.6% to $12.39 million from $9.14 million in the year-ago quarter. Ratings and advisory revenue advanced 35.6% to $12.38 million from $9.13 million, driven by strong growth from the Provider Services and Internet Business Group products. Provider Services revenue, including sales of hospital marketing products and quality improvement products, was approximately $8.00 million, an increase of $1.00 million or 15.0% over the same period of 2008. This increase reflects the sales of company's marketing products to new hospital clients, client retention, and increased sales to existing clients. Internet Business Group revenue was $3.80 million, an increase of $2.10 million or 124.0%, led by an increase in Internet advertising and sponsorship revenue. Finally, Strategic Health Solutions revenue increased 24.0% to $0.60 million. Cost of ratings and advisory revenue climbed 21.5% to $1.91 million from $1.57 million. Sales and marketing spiked 38.5% to $3.29 million, while product development expenses grew 27.3% to $2.15 million. General and administrative costs advanced 26.8% to $2.51 million from $1.98 million.

Looking forward to FY09, Health Grades reiterated its total revenue outlook of approximately $48.00 million or a 20.0% increase over total revenue in 2008. In addition, the company anticipates its operating margin to be in the range of 17.00% to 21.00%.