Financial news site TheStreet.com announced Q3 revenue of $16.1 million, up 24 percent over last year’s $12.9 million. Excluding a big one-time tax credit, the company earned $3.8 million ($.13 per share), up 22 percent from last year’s $3.1 million ($.11 per share). Some highlights:
– Advertising revenue hit $4.6 million in the quarter, up 23 percent from last year’s $3.7 million. Non-financial advertising now represents 49 percent of this total, up from 30 percent.
– Revenue from interactive marketing services, associated with its Promotions.com acquisition, came to $2.3 million since August 2nd. Note that this accounts for much of the year-over-year difference in revenue.
– Paid services revenue came in at $9.2 million, flat compared to last year. Of this $8.3 million was subscription revenue, which was down 3 percent. The company is making progress on shifting its business model, as this side of the business accounted for 57 percent of the total, down from last year’s 71 percent.
Conference Call: As noted, much of the company’s top-line growth this quarter came via acquisition. COO Eric Ashman acknowledged that market conditions caused nervous financial advertisers to pull back in the quarter, although he assured that “these advertisers have come back to TheStreet (NSDQ: TSCM) in the fourth quarter”. CEO Thomas Clarke later reiterated that Q4 advertising growth would see a sequential acceleration due to the timing of these ad buys. Non-financial advertisers made up for some of the weakness, which Clarke believes is a function of its expanding user base, now up to 6.3 million uniques. Looking forward, Clarke explained how a coming redesign of TheStreet.com will fuel increased growth: “We get very little, if any, traffic from search… that is low-hanging fruit for us”. He stated that the current design isn’t at all optimized for search and that comparable sites get up to 20 percent of their traffic this way.