Fusion Corporate Partners

Content and social media company Demand Media has reported financial results for the quarter ended September 30, 2011.

Financial Summary

GAAP

• Revenue increased 25% to $81.5 million, compared with $65.4 million in Q310.
• Loss from operations of $(3.3) million compared with income from operations of $0.9 million in Q310.
• Net loss of $(4.1) million compared with a net loss of $(0.3) million in Q310. Net loss per share of $(0.05) compared with $(0.64) in Q310.
• Cash flow from operations grew 36% to $22.1 million, from $16.3 million in Q310.

Non-GAAP (see the full statement Non-GAAP measures)

• Revenue ex-TAC increased 26% to $78.1 million, from $62.2 million in Q310.
• Adjusted OIBDA grew 33% to $21.7 million, or 27.7% of Revenue ex-TAC, compared with $16.3 million, or 26.2% of Revenue ex-TAC, in Q310.
• Adjusted Net Income of $5.0 million increased 12% compared with $4.5 million in Q310. Adjusted Net Income per share – diluted of $0.06, grew 20% compared with $0.05 in Q310.
• Discretionary Free Cash Flow increased 116% to $19.9 million compared with $9.2 million in Q310.
• Free Cash Flow of $6.0 million compared with $(4.0) million in Q310.

“We reported another strong quarter as we continue to build Demand Media’s foundation for long-term growth,” said Richard Rosenblatt, Chairman and CEO of Demand Media. “The Company is uniquely positioned to deliver data-driven professional content through its robust content publishing platform. We are now in the process of optimizing that platform while increasing our investment in video content and enhancing the quality, engagement and user experience of our sites.”

• Content & Media Revenue increased 27% to $50.7 million, compared with $39.8 million in Q310.
• Traffic acquisition costs (TAC), which represent the portion of Content & Media revenue shared with Demand Media partners, of $3.4 million, or 6.7% of Content & Media revenue, compared with $3.2 million, or 7.9% of Content & Media revenue, in Q310.
• Content & Media Revenue ex-TAC grew 29% to $47.4 million, from $36.7 million in Q310.
• Registrar Revenue increased 20% to $30.7 million compared with $25.5 million in Q310.
• Investment in Intangible Assets of $13.9 million increased 5% from $13.3 million in Q310.