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Website Pros Inc. Reports Operating Results (10-Q)

August 04, 2010 | About:
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10qk

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Website Pros Inc. (WWWW) filed Quarterly Report for the period ended 2010-06-30.

Website Pros Inc. has a market cap of $88.8 million; its shares were traded at around $3.34 with a P/E ratio of 7.2 and P/S ratio of 0.8. Website Pros Inc. had an annual average earning growth of 43.3% over the past 5 years.WWWW is in the portfolios of Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Subscription Revenue. Subscription revenue decreased 6% to $24.0 million in the three months ended June 30, 2010 from $25.4 million in the three months ended June 30, 2009. Subscription revenue decreased approximately $3.0 million due to decreases in our average revenue per subscriber as compared to the prior year, which was slightly offset by $950 thousand from an increase in the average number of customers during each period. There was also an additional $547 thousand of subscription revenue due to our recent acquisition. The decrease in average revenue per subscriber was mainly due to the addition of lower revenue subscribers from our Do-It-Yourself website building and hosting products.

Net subscribers decreased by 454 customers during the three months ended June 30, 2010 as compared to an increase of 1,937 during the three months ended June 30, 2009. The average monthly turnover decreased to 2.9% during the three months ended June 30, 2010 from 3.7% during the three months ended June 30, 2009. The average revenue per subscriber was $28.70 during the three months ended June 30, 2010 from $31.85 during the three months ended June 30, 2009. Due to the current economic conditions and lower marketing spend, gross subscriber additions were down to 25,877 in the three months ended June 30, 2010 from 35,274 in the three months ended June 30, 2009.

Professional Services Revenue. Professional services revenue decreased 21% to $820 thousand in the three months ended June 30, 2010 from $1.0 million in the three months ended June 30, 2009. Professional services revenue decreased $185 thousand and $91 thousand in eCommerce store design services and search engine optimization services, respectively, which was offset by an increase of $45 thousand in other custom design services.

Cost of Subscription Revenue. Cost of subscription revenue increased 3% to $9.7 million in the three months ended June 30, 2010 from $9.4 million in the three months ended June 30, 2009. During the three months ended June 30, 2010, we had incremental expenses of $255 thousand associated with the additional revenue derived from our most recent acquisition of Solid Cactus. Our gross margin on subscription revenue decreased from 63% during the three months ended June 30, 2009 to 60% during the three months ended June 30, 2010. The decrease in gross margin was principally driven by the shift in the subscription revenue mix to lower margin products. Furthermore, as we anticipate revenue growth in the future, we have chosen to maintain a certain level of capacity and not to reduce costs in proportion to the decrease in revenue.

Cost of Professional Services Revenue. Cost of professional services revenue decreased 16% to $485 thousand in the three months ended June 30, 2010 from $575 thousand in the three months ended June 30, 2009. The decrease was primarily the result of a decrease of $108 thousand in employee compensation and benefits.

Read the The complete Report

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10qk
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