WebMD Health Corp. (WBMD)
Q2 2009 Earnings Call Transcript
July 30, 2009; 4:45 pm ET
Marty Wygod - Chairman of WebMD, Chairman & Acting Chief Executive Officer of HLTH Corporation
Mark Funston - Chief Financial Officer of HLTH & WebMD
Wayne Gattinella - Chief Executive Officer & President
Tony Vuolo - Chief Operating Officer
Risa Fisher - Vice President of Investor Relations
Mark Mahaney - Citigroup
James Mitchell - Goldman Sachs
Corey Tobin - William Blair & Company
Mark May - Needham
Robert Coolbrith - ThinkEquity
Previous Statements by WBMD
» WebMD Health Corp. Q1 2009 Earnings Call Transcript
» WebMD HLTH Corp. Q4 2008 Earnings Call Transcript
» WebMD Health Corp. Q3 2008 Earnings Call Transcript
Good afternoon. This is a joint conference call to discuss HLTH and WebMD’s second quarter financial results. The earnings release issued today by HLTH is available at www.hlth.com in the Investor Relations section. The earnings release issued today by WebMD is available at www.wbmd.com also in the Investor Relations section.
The releases issued today include reconciliations between GAAP and non-GAAP financial measures to be presented in this call. The explanatory paragraphs 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’d now like to turn the call over to Marty Wygod, Chairman of WebMD, and Chairman and Acting CEO of HLTH Corp.
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.
Before we discuss the results of WebMD, I’d like to cover the status of the pending merger between HLTH and WebMD. As previously announced, HLTH and WebMD entered into a definitive merger agreement on June 17, 2009. In this transaction, HLTH will merge into WebMD on a tax free post stock transaction.
On July 10, 2009, WebMD filed a Registration Statement with the SEC containing a preliminary joint proxy statement prospective relating to the merger. We have received initial comments from the SEC and believe that we’re on track to seek the required stockholder approvals at the HLTH and WebMD stockholder meetings on September 25, 2009.
Turning to WebMD, I am pleased with WebMD’s results this quarter. At a time when many Internet and media companies are continuing to see declines in advertising revenues, we’re experiencing strong growth. I expect the second half of the year to have continued strong revenue growth with significant margin expansion. Advertiser demand for our high quality and highly engaged audience is increasing.
The complexity and size of the potential contracts in our pipeline of consumer and physician programs continues to increase. The strength of the WebMD brand, the size and quality of our audience, the sophisticated set of services we offer our advertisers and our technology platform and expertise clearly differentiate us from others in the marketplace and provide a solid foundation for growth.
We believe that over the next few years, we’re very well positioned to capture the opportunities that will likely arise as the federal government and the healthcare industry place much greater emphasis on prevention and wellness. With a significant reach in trust that we have with the nation’s physicians and consumers, as well as with our private portal decision support applications and data assets.
We have the information and tools to encourage healthy lifestyle decisions that can reduce the incidents and costs associated with preventable diseases and conditions. Very small reductions in preventable diseases like Type 2 Diabetes or High Blood Pressure take out billions of dollars in healthcare costs.
WebMD can be an integral part of the solution to make savings like this very possible. I’d like first to turn us over to Mark Funston and then Wayne Gattinella to review the second quarter financial and operating results, respectfully and then, we will take questions at the end.
Thank you very much. Mark.
Thank you, Marty. Please note that, as previously announced, the Little Blue Book business is reflected as discontinued operations in WebMD’s and HLTH’s financial statements in the current and prior year periods. WebMD is currently in the process of divesting the Little Blue Book business.
HLTH and WebMD filed form 8-K’s on July 2, which include audited financial statements that reflect the Little Blue Book business as discontinued operations for all periods covered in their most recent form 10-K. HLTH’s results also continue to 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 second quarter results. WebMD revenue for the June 2009 quarter was $98.6 million compared to $86 million last year, an increase of 15%. To breakdown the 15% revenue increase for you, public portal advertising and sponsorship revenue, which represent 77% of total revenue, increased 18% to $76 million. Private portal services revenue, which represents 23% of total revenue, increased 4% to $22.6 million.
Public portals advertising and sponsorship revenue now includes print, which is predominantly advertising in WebMD, the magazine and content syndication and other revenue as the total of these other revenues are not significant to current or prior year periods.