On 24/7 Real Media's (Nasdaq: TFSM ) earnings conference call, the CEO of the company, David Moore, said: "Complexity is our friend." The company is a leader in helping other companies maximize their impact with online advertising -- and, no doubt, online advertising is far from easy. After all, Microsoft (Nasdaq: MSFT ) recently launched its own online advertising system, AdCenter, so advertisers have yet another option to work with.
As seen in the first quarter, 24/7 Real Media is enjoying the complexity. Revenues increased 48% over the past year to $42.9 million. Keep in mind that the company has not made any significant acquisitions during this time. In other words, 24/7 Real Media is seeing robust organic growth. What's more, the performance came during a traditionally weak part of the year.
The company did sustain a loss of $0.16 per share, which compares to a $0.01 per-share loss in the same period a year ago. But as is the case with many tech companies, 24/7 Real Media is now expensing its stock options. Looking at pro forma operating income, the company posted $3.6 million, which is a $0.04 gain over the comparable period.
24/7 Real Media has three key lines of business. The media division helps clients develop campaigns and target the right messages across a network of more than 850 publishers. Next, the search division allows clients to manage their paid search campaigns, such as crafting advertising messages, bidding on search engines -- such as Yahoo! (Nasdaq: YHOO ) , Google (Nasdaq: GOOG ) , and MSN -- as well as tracking performance. Of course, this is a red-hot area. Revenues in this segment increased 85% to $17.8 million in the first quarter.
Finally, the technology division licenses 24/7's technology to sales organizations that want to manage their own campaigns.
Something else that's critical: Advertisers want a global footprint. And that's what 24/7 Real Media offers, with operations in Europe and the Pacific Rim.
So far, it looks like the surge in online advertising will continue to grow at a rapid clip, and the growth is ramping up overseas. With its strong platform, 24/7 Real Media is poised to continue its growth. It raised its full-year guidance for 2006 to $190 million to $200 million in revenue and pro forma operating income at $0.35 to $0.36. Yes, raising guidance seems to be a nice habit for this company, or any company for that matter, to develop.
Microsoft is a Motley Fool Inside Value pick. Take the newsletter dedicated to getting top-shelf stocks at bargain-basement prices for a 30-day free spin.
Fool contributor Tom Taulli does not own shares mentioned in this article.
RSS Headlines
Fool UK