Bellevue-based Motricity’s stock has skyrocketed 172 percent in the past two months, bolstered by big projects with new international carriers and a bullish endorsement by Mad Money’s Jim Cramer. In the company’s earnings report released today, the company did not disappoint. Revenues increased 35 percent to $37.9 million, compared to the year-ago period, and it turned a profit compared to both the previous and year-ago periods.
Most of the revenue bump came from professional services, meaning that Motricity was being paid to complete technical work on new projects for carriers. For instance, Motricity reported that third-quarter professional services revenue increased 78 percent compared to the year-ago quarter, mostly reflecting large implementation projects for AT&T (NYSE: T) and XL Axiata. It said it completed AT&T’s AppCenter launch last week on Oct. 28.
However, growth was slower from “managed services revenue,” which reflects shared revenues from data services, like storefronts and content aggregation. The revenue will likely increase naturally as Motricity rolls out new services with carriers, but it will also be contingent upon services being popular among subscribers. Managed services revenue for the quarter increased 19 percent compared to the prior year period.
Third quarter net income was $3.3 million, compared with a net loss of $1.8 million for the same period in 2009, and a net loss of $11.6 million for the second quarter of 2010 (which was impacted by a one-time charge of $17.5 million for stock-based compensation related to the IPO). Earnings per share totaled 7 cents a share for the third quarter of 2010 as compared to losses of $1.31 and $1.95 for the third quarter of 2009 and second quarter 2010, respectively.
Motricity expects the past year’s growth to be sustainable over the long term. The company expects in its two-to-three year financial model, annual revenue growth up to 30 percent. For the fourth quarter, Motricity expects revenue to be in the range of $35 million to $36 million. It specified that professional services revenue will likely fall from the extraordinary third quarter, but “will remain at higher than historical levels due to ongoing international implementation services.” The company’s stock fell 50 cents, or roughly 2.4 percent, in after hours trading to $20.50 a share.