NEW YORK AQuantive said clients are pouring money into online marketing initiatives, helping boost its revenue and profits.
The Seattle-based parent company of Avenue A/Razorfish reported first-quarter revenue of $65 million, up 187 percent from a year earlier, thanks to client spending growth and the Razorfish acquisition. Net income was $6.4 million, or 9 cents a share, up 55 percent from Q1 2004.
While aQuantive’s growth was driven by acquisitions, the company said it recorded 61 percent organic revenue growth excluding results from businesses it bought.
The quarter was much stronger than Wall Street analysts following the company expected. The consensus forecast called for aQuantive to have sales of $58 million and 5 cents per share profit.
The growth of the Web advertising industry benefited all of aQuantive’s operating units. The Avenue A/Razorfish unit had revenue of $39.1 million, compared to $9.9 million in the year-ago quarter. Operating income more than doubled year over year to $4.5 million.
Brian McAndrews, aQuantive’s CEO, said the company made progress improving Avenue A/Razorfish’s profits and cross-selling services to pre-acquisition customers of Avenue A and Razorfish. He said 20 clients are considering adding either media or creative services.
The company’s technology unit, which includes ad serving, saw revenue of $20.6 million, up 72 percent from the $12 million brought in a year earlier. Operating income was $10.3 million, compared to $4.2 million in Q1 2004.
In its relatively new performance media segment, which includes the DrivePM ad network, aQuantive had revenue of $5.3 million and $888,000 in operating income. With search advertising increasingly competitive, McAndrews said more marketers would turn to services like DrivePM, which buys cheap inventory from publishers and resells it to advertisers, often on a price-per-click basis, using behavioral data gleaned through the Atlas ad server to target placements.
AQuantive said it would not have to expense stock options in the second half of the year, citing a recent Securities and Exchange Commission ruling. This, combined with rising demand for online marketing, will push up the company’s forecast. It expects revenue for the year between $265 million and $275 million, with net income of 36 cents to 40 cents per share.
AQuantive Rides Rising Online Tide
