WebMD Health Corp. (Nasdaq: WBMD), the leading source of health information, today announced financial results for the three months ended June 30, 2010.
For the three months ended June 30, 2010:
- Revenue was $122.7 million, compared to $98.6 million in the prior year period, an increase of 24%.
- Earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA") was $34.3 million, compared to $20.0 million in the prior year period, an increase of 71%.
- Net income was $7.7 million or $0.13 per share, compared to a net loss of $(11.7) million or $(0.25) per share in the prior year period.
"WebMD is steadily establishing itself as an essential marketing channel for the nation's largest biopharma and consumer products companies," said Wayne Gattinella, President and CEO. "With advertising revenue growth of 32% and expanding operating margins, our core online business continues to outpace the growth of the online advertising markets overall."
Financial Summary
Revenue for the second quarter was $122.7 million, compared to $98.6 million in the prior year period, an increase of 24%. Specifically:
- Public portal advertising and sponsorship revenue was $100.6 million for the second quarter, compared to $76.0 million in the prior year period, an increase of 32%. Traffic to the WebMD Health Network continued to grow, reaching an average of 80.7 million unique users per month and total traffic of 1.8 billion page views during the second quarter, increases of 35% and 22%, respectively, from a year ago. 1.5 million continuing medical education (CME) programs were completed on the WebMD Professional Network during the second quarter.
- Private portal services revenue was $22.1 million for the second quarter, a decrease of $500 thousand from the prior year period. The base of large employers and health plans using WebMD's private Health and Benefits portals during the second quarter was 129 as compared to 137 in the prior year period.
Adjusted EBITDA for the second quarter was $34.3 million, compared to $20.0 million in the prior year period, an increase of 71%.
Net income was $7.7 million or $0.13 per share, compared to a net loss of $(11.7) million or $(0.25) per share in the prior year period. Net income in the current period included the after tax impact of a gain on investments of $3.6 million and a loss on convertible notes of $(6.6) million. Net loss in the prior year period included the after tax impact of a gain on convertible notes of $2.2 million, a loss from discontinued operations of $(13.3) million and non-controlling interest of $(0.4) million. Net income would have been $10.7 million in the current period as compared to a net loss of $(0.2) million in the prior year period excluding these items.
During the second quarter:
- WebMD received cash proceeds of $65.5 million from the sale of the Senior Secured Notes it received as consideration in the sale of HLTH's Porex business.
- WebMD received $286 million in cash from the sale of its auction rate securities investments and has retained the ability to receive the upside on the auction rate securities through April 2012.
- WebMD repurchased $32.4 million face amount and had conversions of $232.1 million face amount of the Company's 1.75% convertible notes.
- WebMD repurchased $12.9 million face amount and had conversions of $12.7 million face amount of the Company's 3 1/8% convertible notes.
- WebMD completed a tender offer to repurchase approximately 5.2 million shares for $242 million in cash.
As of June 30, 2010, WebMD had $535 million in cash and investments and had approximately $121 million in aggregate principal amount of its 3 1/8% convertible notes outstanding.
WebMD Mobile
WebMD's penetration into the mobile health information market continued to expand this quarter:
- WebMD Mobile for iPhone/iTouch has generated nearly two million downloads since launch and the newest release introduces an improved user interface and new features including local health listings.
- WebMD Mobile for the iPad launched during the quarter with over 400,000 downloads to date. WebMD Mobile for the iPad allows users to check their symptoms, access drug and treatment information, get first aid essentials and check local health listings on the go.
- Medscape Mobile for physicians has attracted over 450,000 users since launch and, with availability on both the iPhone/iTouch and Blackberry, it is becoming the premier clinical reference tool at the point of care.
Financial Guidance
WebMD is increasing its financial guidance for 2010 today.
- The range for revenue guidance increases to $515 million to $535 million (from $510 million to $525 million).
- The range for Adjusted EBITDA guidance increases to $158 million to $168 million (from $150 million to $158 million).
WebMD is providing a schedule (attached to this press release) to reflect these increases as well as updates for non-cash and other items primarily to reflect the impact of the sale of investments and convertible note conversions and repurchases completed by WebMD during the second quarter of 2010.
For the third quarter of 2010, WebMD expects:
- Revenue to be in excess of $133 million, an increase in excess of 19% from last year. Public portal advertising and sponsorship revenue is expected to grow in excess of 24%.
- Adjusted EBITDA to be in excess of 32% of revenue.
- Net income to be in excess of 9% of revenue.