The News

WebSideStory Announces Record Second Quarter 2005 Results

28/07/2005

Q2 Revenue Up 78% Over Last Year; Record Net Income

SAN DIEGO, CA (July 28, 2005) WebSideStory, Inc. (Nasdaq: WSSI), a leading provider of on-demand digital marketing applications, today announced results of operations for the quarter ended June 30, 2005. Financial and operating highlights for the quarter include:

   Signing over 115 new contracts for one or more components of the WebSideStory Active Marketing Suite, including significant contracts with Fox News, Adobe, Viacom, Guardian Newspapers, Bank of Hawaii, Victoria's Secret, and Cincinnati Bell;

   Quarterly revenue of $ 9,412,000, an increase of approximately 78% over the $ 5,293,000 reported in the same period in 2004;

   Quarterly net income of $ 1,284,000 and non-GAAP, pro forma net income (before stock-based compensation and amortization of intangibles) of $ 1,882,000, compared to losses of $(272,000) and $(48,000) over the same period in 2004, respectively;

   Quarterly earnings per share of $ 0.07 and non-GAAP, pro forma earnings per share (before stock-based compensation and amortization of intangibles) of $ 0.10, compared to losses of $(0.06) and $(0.01) over the same period in 2004, respectively. Earnings per share included stock-based compensation expenses of approximately $ 337,000, or $ 0.02 per share, and amortization of intangibles of approximately $ 261,000, or $ 0.01 per share. All per share numbers are expressed on a weighted average diluted share basis;

   Completing the acquisition of Avivo Corporation d.b.a. Atomz on May 4th, broadening the company's on-demand offerings into site search and web content management and greatly expanding its total addressable market; and

   Holding inaugural classes of Digital Marketing University at the bi-annual ActiveInsights customer forum in April, with record attendance of over 350 customers and partners.

"We are pleased to announce another quarter of solid top line growth and increasing profitability," said Jeff Lunsford, chairman and CEO. "Our strategy of offering an integrated suite of digital marketing applications is being well received by the market, as evidenced by our signing over 115 new contracts and bringing these customers into the WebSideStory family. We are proud to have achieved these results while operating with discipline and reaching the important milestone of 20% net income margins before stock-based compensation and amortization of intangibles."

    Financial Guidance
    WebSideStory provides the following guidance (in millions except per share data):
 
                                            Q3-05        Q4-05         Q1-06
     Revenue (millions)      $ 11.0-11.3   $ 11.9-12.3   $ 12.7-13.5
 
     Non-GAAP, pro forma earnings before stock-based compensation and
      amortization of intangibles per share
                                   $ 0.11-0.12   $ 0.13-0.14
 
     Stock-based compensation and amortization of intangibles per share
                                         $(0.03)         $(0.03)
 
     GAAP Earnings per share
                                    $ 0.08-0.09   $ 0.10-0.11
 
 
Note on the Use of Non-GAAP Financial Measures
Some of the financial measures in this press release, including the guidance on future periods, are presented on a pro forma basis. These pro forma numbers are considered non-GAAP financial measures within the meaning of SEC Regulation G. WebSideStory believes that this presentation is useful to investors, because it describes the operating performance of the company and helps investors gauge the company's ability to generate cash flow, excluding some non-cash charges that are included in the most directly comparable measures calculated and presented in accordance with GAAP. Company management uses these non-GAAP measures as important indicators of the company's past performance and to plan and forecast performance in future periods. Investors should not consider non-GAAP financial measures in isolation from, or in substitution for, financial information presented in compliance with GAAP.