Internet service provider EarthLink Inc. has posted its Q1 FY2003 financial results, for the period that ended March 31, 2003. The company posted 6.1 percent year over year growth, although it ended the quarter with a net loss.
EarthLink reported revenues of US$353.7 million for the quarter, up 6.1 percent from Q1 2002. The company also posted EBITDA excluding facility exit costs of $22 million. Net earnings before facility exit costs and acquisition-related amortization were $1.5 million. Net loss after facility exit costs and acquisition-related amortization was $61.9 million.
EarthLink CEO Garry Betty lauded his company’s efforts to streamline call center operations and increase network efficiencies. “EarthLink began 2003 the same way it ended 2002 — hitting or exceeding our financial targets and growing our subscriber base while enhancing our online experience with new products and services,” he said.
EarthLink’s subscriber base grew 2.9 percent to about 5.0 million paying customers. 112,000 of the new customers are broadband subscribers, bringing EarthLink’s total broadband subscribed base to 891,000. Narrowband (dial-up) users dropped 5.1 percent year over year, and monthly customer churn dropped from 4.1 to 4.0 percent year over year.
Broadband subscribers make up less than 20 percent of EarthLink’s overall user base but they actually represent 23 percent of EarthLink’s total revenues — $81.4 million, all told. Broadband revenues were down 3.5 percent to $253.5 million, reflective of the declining user base. Web hosting revenues, advertising, content and commerce revenues totalled about $18.9 million.
EarthLink ended the quarter with cash and marketable securities in the vicinity of $497.7 million. The company repurchased 3.4 million shares of its common stock for $17.5 million during the quarter, and more recently bought back 9 million shares from Sprint Corp. for $53.1 million.
EarthLink expects its user base to grow to 5.1 to 5.3 million subscribers by year’s end, primarily through the continued growth of its broadband services. The company expects to exist 2003 with $1.44 – $1.5 billion in revenues, and hopes to post break-even GAAP net income by the fourth quarter.
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