Feb 27, 2009 : iWeb Revenue Grows by 92 Percent in Q1

📅 February 27, 2009 - Canadian web hosting provider iWeb (iweb.com 👉 Total Reviews: 10
🙌 Average Rating: 1.8 / 10
👍 Good Reviews: 1
👎 Bad Reviews: 9
👈 Official Responses: 0) reported on Friday it has released its financial results for the quarter ended December 31, 2008, which revealed the company's revenue increased from 92 percent to $6.1 million for the quarter ended December 31, 2008.

The web host has seen significant growth in the past few years. It recently expanded its network by more than 500 percent in the past year, growing from 9Gbps to 50Gbps, to meet the bandwidth demand of its customers.

The company's first quarter highlights include an adjusted EBITDA increase to $1.6 million, new annual recurring revenues of $2.8 million generated during the first quarter, operating income at break-even, and a net loss of $1.2 million.

"Our revenues are continuing their rapid growth, constantly reaching new heights," says Eric Chouinard, iWeb president and CEO. "Since November, our monthly billing has exceeded $2 million. With new annual recurring revenues of $2.8 million generated in Q1 and a more favorable CAD/USD exchange rate, we are maintaining the pace of our growth plan.

According to Philip Tousignant, chief financial officer at iWeb, the company is still above the break-even point and its adjusted EBITDA has doubled since last year to $1.6 million, which accounts for 26 percent of the company's revenue.

That said, the financial review shows that iWeb has endured a significant loss for the quarter, following the booking of financial expenses resulting from external market conditions.

These costs amount to $1.4 million for the last quarter, the most important aspect of which is the unrealized exchange loss on the long-term debt of $10 million.

"Since the long-term debt is in USD, it is affected by the current exchange rate," says Tousignant. "During the quarter, the CAD/USD exchange rate rose from 1.06 to 1.225, causing the unrealized loss of $1.6 million on long-term debt."

Income for the first quarter of fiscal 2009 originated from iWeb's three main service offerings, including dedicated servers accounted for 85 percent, colocation services accounted for 8 percent, and shared web hosting accounted for 7 percent.

Seventy-eight percent of revenues for the quarter were generated in US dollars, which is a considerable advantage for iWeb given the weakness of the Canadian dollar to the US dollar.

Compared to the same period of the previous year, this has had a positive impact of $720,000 on earnings.

Finally, iWeb's gross profit margin for the quarter was 52 percent of revenue, compared to 54 percent for the first quarter of fiscal 2008.

The complete interim financial statements and management report can be viewed here.