WebMD Health Corp. (WBMD, Financial) filed Quarterly Report for the period ended 2012-06-30.
Webmd Health Corp. has a market cap of $767.2 million; its shares were traded at around $15.14 with a P/E ratio of 95.5 and P/S ratio of 1.4. Webmd Health Corp. had an annual average earning growth of 32.8% over the past 5 years.
Sales and Marketing. Sales and marketing expense decreased to $31,822 and $61,925 for the three and six months ended June 30, 2012, respectively, from $32,270 and $64,564 in the prior year periods. As a percentage of revenue, sales and marketing expense was 28.2% in both the three and six months ended June 30, 2012, compared to 22.8% and 23.7% in the prior year periods. Included in sales and marketing expense was non-cash expense related to stock-based compensation of $2,304 and $4,465 during the three and six months ended June 30, 2012, respectively, compared to $2,188 and $4,579 in the prior year periods. Sales and marketing expense, excluding such non-cash expenses, was $29,518 and $57,460 during the three and six months ended June 30, 2012, respectively, or 26.2% and 26.2% of revenue, respectively, compared to $30,082 and $59,985, or 21.3% or 22.0% of revenue for the prior year periods. The decrease in absolute dollars was primarily attributable to a decrease in certain compensation related costs attributable to the lower revenue in the first half of 2012 compared to the prior year period. The increase as a percentage of revenue, excluding the non-cash expenses discussed above, for 2012 compared to 2011 was primarily due to the decrease in our revenue of 19.5% without a commensurate decrease in our sales and marketing expenses as certain of these expenses are fixed in nature.
General and Administrative. General and administrative expense was $21,746 and $50,768 for the three and six months ended June 30, 2012, respectively, compared to $22,006 and $44,827 in the prior year periods. As a percentage of revenue, general and administrative expense was 19.3% and 23.1% in the three and six months ended June 30, 2012, compared to 15.6% and 16.4% in the prior year periods. Included in general and administrative expense was non-cash stock-based compensation expense of $5,204 and $17,186, during the three and six months ended June 30, 2012, respectively, compared to $5,304 and $10,623 in the prior year periods. The increase in non-cash stock-based compensation expense during the six months ended June 30, 2012 compared to the prior year period was primarily due to the voluntary surrender of stock options by certain of our officers and directors and the related acceleration of the unrecognized stock-based compensation expense associated with those options during the March 2012 quarter. General and administrative expense, excluding such non-cash expense, was $16,542 and $33,582 in the three and six months ended June 30, 2012, respectively, or 14.7% and 15.3% of revenue, compared to $16,702 and $34,204, or 11.8% and 12.5% of revenue for the prior year periods. While our general and administrative expenses, excluding non-cash stock-based compensation expense, were slightly lower during the three and six months ended June 30, 2012 compared to the prior year periods, these expenses during the current year represented a higher percentage of revenue due to the 20.3% and 19.5% decreases in revenue, respectively.
Adjusted EBITDA. Adjusted EBITDA decreased to $14,238 and $25,489 during the three and six months ended June 30, 2012, respectively, compared to $45,289 and $83,147 in the prior year periods. As a percentage of revenue, Adjusted EBITDA was 12.6% and 11.6% for the three and six months ended June 30, 2012, respectively, compared to 32.0% and 30.5% in the prior year periods. This decrease as a percentage of revenue was primarily due to the lower revenue in 2012. Many of our expenses are fixed in nature and do not vary directly with revenue, and accordingly, our Adjusted EBITDA as a percentage of revenue will fluctuate primarily as a result of changes in our revenue.
Cash provided by operating activities from our continuing operations for the six months ended June 30, 2011 was $77,100, which related to net income of $41,140, adjusted for income from discontinued operations of $7,394, the gain on investments of $15,829, the non-cash income tax provision of $4,423 related to deferred income taxes, and other non-cash expenses of $33,908, which include depreciation and amortization expense, non-cash interest expense and non-cash stock-based compensation expense. Additionally, changes in operating assets and liabilities provided cash flow of $20,852, due to cash provided by a decrease in accounts receivable of $19,234 and an increase in accrued liabilities of $4,765, offset by an increase in prepaid expenses and other assets of $2,103 and a decrease in deferred revenue of $1,044.
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Webmd Health Corp. has a market cap of $767.2 million; its shares were traded at around $15.14 with a P/E ratio of 95.5 and P/S ratio of 1.4. Webmd Health Corp. had an annual average earning growth of 32.8% over the past 5 years.
Highlight of Business Operations:
Cost of Operations. Cost of operations increased to $54,243 and $107,714 for the three and six months ended June 30, 2012, respectively, from $51,152 and $99,601 in the prior year periods. As a percentage of revenue, cost of operations was 48.1% and 49.0% for the three and six months ended June 30, 2012, compared to 36.2% and 36.5% for the prior year periods. Included in cost of operations was non-cash expense related to stock-based compensation of $1,873 and $4,630 during the three and six months ended June 30, 2012, respectively, compared to $1,856 and $3,959 in the prior year periods. Cost of operations excluding such non-cash expense was $52,370 and $103,084 for the three and six months ended June 30, 2012, respectively, or 46.5% and 46.9% of revenue, compared with $49,296 and $95,642, or 34.9% and 35.0% of revenue for the prior year periods. The increase in absolute dollars was primarily attributable to an increase of approximately $4,800 and $10,700 of expenses for the three and six month periods, respectively, associated with the operations and maintenance of our network, including efforts to drive and support the increased traffic to our Websites, expenses related to the development of new content and the development of tools and features designed to increase the engagement of visitors to our Websites, and costs associated with the creation and delivery of our advertising and sponsorship programs. The increase in these expenses was partially offset by a decrease of $1,700 and $3,300 for the three and six month periods of distribution expense related to the phase out of our affiliate partner sites and other distribution partners. The increase as a percentage of revenue, excluding the non-cash expenses discussed above, for the three and six months ended June 30, 2012 compared to the prior year periods, was due to the decrease in our revenue of 20.3% and 19.5%, respectively, combined with the increase in our cost of operations as certain of these expenses are fixed in nature and do not vary directly with revenue.Sales and Marketing. Sales and marketing expense decreased to $31,822 and $61,925 for the three and six months ended June 30, 2012, respectively, from $32,270 and $64,564 in the prior year periods. As a percentage of revenue, sales and marketing expense was 28.2% in both the three and six months ended June 30, 2012, compared to 22.8% and 23.7% in the prior year periods. Included in sales and marketing expense was non-cash expense related to stock-based compensation of $2,304 and $4,465 during the three and six months ended June 30, 2012, respectively, compared to $2,188 and $4,579 in the prior year periods. Sales and marketing expense, excluding such non-cash expenses, was $29,518 and $57,460 during the three and six months ended June 30, 2012, respectively, or 26.2% and 26.2% of revenue, respectively, compared to $30,082 and $59,985, or 21.3% or 22.0% of revenue for the prior year periods. The decrease in absolute dollars was primarily attributable to a decrease in certain compensation related costs attributable to the lower revenue in the first half of 2012 compared to the prior year period. The increase as a percentage of revenue, excluding the non-cash expenses discussed above, for 2012 compared to 2011 was primarily due to the decrease in our revenue of 19.5% without a commensurate decrease in our sales and marketing expenses as certain of these expenses are fixed in nature.
General and Administrative. General and administrative expense was $21,746 and $50,768 for the three and six months ended June 30, 2012, respectively, compared to $22,006 and $44,827 in the prior year periods. As a percentage of revenue, general and administrative expense was 19.3% and 23.1% in the three and six months ended June 30, 2012, compared to 15.6% and 16.4% in the prior year periods. Included in general and administrative expense was non-cash stock-based compensation expense of $5,204 and $17,186, during the three and six months ended June 30, 2012, respectively, compared to $5,304 and $10,623 in the prior year periods. The increase in non-cash stock-based compensation expense during the six months ended June 30, 2012 compared to the prior year period was primarily due to the voluntary surrender of stock options by certain of our officers and directors and the related acceleration of the unrecognized stock-based compensation expense associated with those options during the March 2012 quarter. General and administrative expense, excluding such non-cash expense, was $16,542 and $33,582 in the three and six months ended June 30, 2012, respectively, or 14.7% and 15.3% of revenue, compared to $16,702 and $34,204, or 11.8% and 12.5% of revenue for the prior year periods. While our general and administrative expenses, excluding non-cash stock-based compensation expense, were slightly lower during the three and six months ended June 30, 2012 compared to the prior year periods, these expenses during the current year represented a higher percentage of revenue due to the 20.3% and 19.5% decreases in revenue, respectively.
Adjusted EBITDA. Adjusted EBITDA decreased to $14,238 and $25,489 during the three and six months ended June 30, 2012, respectively, compared to $45,289 and $83,147 in the prior year periods. As a percentage of revenue, Adjusted EBITDA was 12.6% and 11.6% for the three and six months ended June 30, 2012, respectively, compared to 32.0% and 30.5% in the prior year periods. This decrease as a percentage of revenue was primarily due to the lower revenue in 2012. Many of our expenses are fixed in nature and do not vary directly with revenue, and accordingly, our Adjusted EBITDA as a percentage of revenue will fluctuate primarily as a result of changes in our revenue.
Cash provided by operating activities from our continuing operations for the six months ended June 30, 2011 was $77,100, which related to net income of $41,140, adjusted for income from discontinued operations of $7,394, the gain on investments of $15,829, the non-cash income tax provision of $4,423 related to deferred income taxes, and other non-cash expenses of $33,908, which include depreciation and amortization expense, non-cash interest expense and non-cash stock-based compensation expense. Additionally, changes in operating assets and liabilities provided cash flow of $20,852, due to cash provided by a decrease in accounts receivable of $19,234 and an increase in accrued liabilities of $4,765, offset by an increase in prepaid expenses and other assets of $2,103 and a decrease in deferred revenue of $1,044.
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