WebMD Health Corp. (WBMD)
Q1 2009 Earnings Call Transcript
May 5, 2009 4:45 pm ET
Risa Fisher – VP of IR
Marty Wygod – Chairman, WebMD; Chairman and Acting CEO, HLTH Corporation
Mark Funston – EVP and CFO
Wayne Gattinella – CEO and President
Anthony Petrone – Maxim Group
Mark Mahaney – Citigroup
Jerin Hayman [ph] – UBS Financial
Jennifer Watson – Goldman Sachs
Josh Patersons [ph] – Westwind Capital [ph]
Mark May – Needham & Company
Corey Tobin – William Blair
William Morrison – ThinkEquity
Good afternoon and welcome to the HLTH Corporation and WebMD HLTH Corp’s March 2009 quarterly conference call. Today’s call is being recorded.
I will now turn the call over to Risa Fisher, Vice President of Investor Relations.
Previous Statements by WBMD
» WebMD Health Corporation Q2 2009 Earnings Call Transcript
» WebMD HLTH Corp. Q4 2008 Earnings Call Transcript
» WebMD Health Corp. Q3 2008 Earnings Call Transcript
The releases issued today include reconciliations between GAAP and non-GAAP financial measures to be presented in this call. The explanatory paragraph in those releases concerning forward-looking disclosures and related risks and uncertainties also apply to forward-looking disclosures made during this call including those regarding our guidance on future financial results and other projections or measures of HLTH and WebMD's future performance. Information concerning the risks and uncertainties can be found in HLTH and WebMD's SEC filings.
I would now like to turn the call over to Marty Wygod, Chairman of WebMD and Chairman and Acting CEO of HLTH Corporation.
Thanks, Risa. Good afternoon and thank you for joining us today. Joining me on the call today are Wayne Gattinella, CEO and President of WebMD; Mark Funston, CFO of HLTH and WebMD; and Tony Vuolo, COO of WebMD.
I am pleased that in this challenging economic environment, WebMD is continuing deliver strong results. WebMD saw 16% growth in online advertising revenue during a period where most companies are seeing declines. WebMD continues to solidify its leadership position as the most recognized and trusted brand of health information.
Some of our competitive advantages include the strength of the WebMD brand, the size and quality of our audience, the sophisticated and unique set of services we offer our advertisers, and the sizable technology investment and expertise we have built over many years.
As Wayne will shortly discuss, we have recently launched a number of new products that are seeing strong reception in the marketplace. We expect to have a number of additional customers for these products implemented in the latter part of the year. The size and the breadth of the overall market opportunity is substantial. And I am confident that as a result of the momentum and strategic position, WebMD will create substantial value for our shareholders over the long term.
I would like to turn it over to Mark Funston and then Wayne Gattinella to review the first quarter financial and operating results respectively. And then we will take your questions at the end. Thank you.
Thank you, Marty. Please note that WebMD has decided to divest and seek buyer for its Little Blue Book print directory business as it is not strategic to the rest of WebMD’s business. The Little Blue Book business is now reflected as a discontinued operation in WebMD’s and HLTH’s financial statements in the current and prior year periods. The Little Blue Book business was expected to generate $1.5 million and $10 million in revenue for the first quarter and full year 2009, respectively. Adjusted EBITDA for this business was expected to be a loss of $300,000, and earnings of $2 million for the first quarter and full year 2009, respectively.
As a result of our decision to divest the print directory operation of the Little Blue Book, we will no longer present a stand-alone publishing segment in our financial statement. WebMD’s magazine and other print products are reflected in Print revenue. Content syndication and other revenues are now included in advertising and sponsorship revenue. HLTH’s results also present the ViPS and Porex businesses as discontinued operations in the current and prior year periods, reflecting the sale of ViPS in July 2008 and the ongoing process to divest Porex.
I will now review WebMD’s first quarter results. WebMD revenue for the March 2009 quarter was $90.3 million compared to $80.7 million last year, an increase of 12%. First quarter revenue from continuing operations was at the upper end of our guidance range after adjusting for the $1.5 million in revenue we were anticipating from Little Blue Book, which is now reflected as discontinued operations. Looking at the revenue increase of 12%, advertising and sponsorship revenue which represents 73% of revenue increased 16% to $65.4 million. Private portal licensing revenue which represents 26% of revenue increased 5% to $23 million. Print revenues decreased $384,000 to $1.9 million.
WebMD’s adjusted EBITDA for the March 2009 quarter was $18.7 million or $0.32 per share compared to $16.3 million or $0.28 per share, an increase of 14%. Adjusted EBITDA of 20.7% for the first quarter of 2009 was 40 basis points higher than last year and was above our prior financial guidance after adjusting for the classification of the Little Blue Book business as a discontinued operation.