As expected, Razorfish founders Jeff Dachis and Craig Kanarick have stepped down as CEO and chief strategic officer, respectively, of the New York-based i-shop they founded in 1995. The news came as once-profitable Razorfish posted its second consecutive quarterly loss on Thursday after markets closed. Jean-Philippe Maheu, formerly COO of Razorfish, has been promoted to CEO, while Dachis and Kanarick will continue to serve as co-chairman of the i-shop's board of directors.
According to Razorfish, first quarter revenues declined one-third from a year ago, to $42.7 million from $64.1million. The company registered a net loss of $24.9 million, or 25 cents per share, compared to a gain of $4.5 million, or 5 cents per share, a year ago. Pro forma net loss for the quarter was $6.6 million, or 7 cents per share, while a year ago, the company posted a pro forma net gain of $6.5 million, or 7 cents per share.
The quarter ended a little better than analysts had expected: According to First Call/Thomson Financial, the consensus was for Razorfish to show an 8-cents-per-share loss in the first quarter.
Next quarter, Razorfish said it expects revenues to range from $32 million to $37 million, with operating costs of $37 million. It predicted that pro forma net loss will range from break-even to 3 cents per share. The company ended the quarter with $30 million in cash. Next quarter, the i-shop -- which has cut its staff nearly in half since the beginning of the year, to 1,150 -- expects to burn through $10 million, although it should be cashflow positive by the end of June.
"Razorfish has one goal and objective, and that is to return to profitability," Maheu said, adding, too, that, "we continue to deepen our relationship with key clients." Maheu said Razorfish's client retention rate is 80 percent and that its client list currently includes Ford, Cisco, HBO and Sony. "We added 10 clients in Q1," he added, but he said the list remains confidential at this point.