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AQuantive Continues Growth in Q2

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NEW YORK AQuantive has reported strong results across all of its businesses, including sharply higher revenue and operating income at Avenue A/Razorfish.

The Seattle-based firm said second-quarter revenue was nearly $106 million, up 37 percent from a year earlier. Net income was $12.3 million, or 15 cents per diluted share, up 59 percent from the same period in 2005.

AQuantive's digital marketing services unit, which includes Avenue A/Razorfish and U.K. agency DNA, generated $64 million in revenue, a 33 percent increase year over year. Operating income was nearly $13 million, up from $7.2 million in Q2 2005.

The results did not include Amnesia, an Australian Web shop purchased last month.

WR Hambrecht analyst Denise Garcia said aQuantive was outgrowing the overall Internet advertising market, achieving nearly 30 percent organic growth.

"The company's strategic acquisitions and product mix remain in high demand both domestically and internationally," she wrote in a research note. "We continue to believe that the company will outperform industry growth rates, as its guidance suggests, because of its international expansion activities and continued organic growth."

CEO Brian McAndrews said the aQuantive, which ended the quarter with $307 million in cash, would consider making further acquisitions. "We do see a real opportunity in growing geographically for the Avenue A/Razorfish business," he said. "We expect that to continue."

Amnesia will provide a "foothold" for Avenue A/Razorfish to expand into Asia, he added.

The company also saw good results from its technology and performance media groups. The digital marketing technologies unit, which includes the Atlas ad server, had $30 million in revenue, up 32 percent from a year earlier. Operating income was $12.5 million, compared to $10 million in the year-ago period.

The performance media segment, which includes the Drive PM and newly acquired Franchise Gator, had revenue of $12 million, up 83 percent. Operating income was $2.5 million, up from $1.2 million.

For the year, aQuantive expects revenue of $420-430 million and net income of 54-58 cents per share.