Web.com (WWWW) reported its earnings for announced results for the fourth quarter and full year ended December 31, 2012. on Friday and had investors buying shares of the company rose over 12% to $18.19

Fourth Quarter and Recent Business Highlights:

  • Web.com’s total net subscribers were 3,009,000 at the end of the fourth quarter of 2012, an increase of 18,000 from the end of the third quarter.
  • Web.com’s average revenue per user (ARPU) was $13.77 for the fourth quarter of 2012, representing a sequential increase of 2.1% from $13.49 in the third quarter of 2012 and growth of 7.1% from the $12.86 pro forma ARPU in the fourth quarter of 2011.
  • Customer churn remained approximately 1% for the third quarter of 2012, consistent with the previous record low level.
Summary of Full Year 2012 Financial Results:

  • Total revenue, calculated in accordance with GAAP, was $407.6 million for 2012, compared to $199.2 million for 2011.
  • Non-GAAP revenue, which adds back the impact of the fair value adjustment to acquired deferred revenue, was $491.4 million for 2012, compared to $234.4 million in 2011.
  • Operating loss, calculated in accordance with GAAP, was $36.0 million for 2012 and included an $86.1 million negative impact related to the fair value adjustment to acquired deferred revenue and deferred expenses as well as $3.1 million in restructuring charges and corporate development expenses. For 2011, the company reported a GAAP operating loss of $40.8 million, which included a $36.0 million negative impact from the fair value adjustment to acquired deferred revenue and deferred expenses as well as $22.6 million in restructuring charges and corporate development expenses.
  • GAAP net loss from continuing operations was $122.2 million, or $2.61 per diluted share, for 2012 and included the above-mentioned impact related to the fair value adjustment to acquired deferred revenue and deferred expenses, restructuring charges and corporate development expenses, a $42.0 million loss related to the extinguishment of debt, and an income tax benefit of $16.7 million. GAAP net loss from continuing operations was $12.5 million, or $0.41 per diluted share, in 2011, which included the above-mentioned impact from the fair value adjustment to acquired deferred revenue and deferred expenses, restructuring charges and corporate development expenses, as well as a $50.1 million income tax benefit.
  • Non-GAAP operating income was $135.9 million for 2012, compared to $50.2 million for 2011 and representing a record annual non-GAAP operating margin of 28%.
  • Non-GAAP net income from continuing operations was $79.8 million for 2012, or $1.59 per diluted share, compared to $35.3 million, or $1.05 per diluted share for 2011
  • Adjusted EBITDA was $144.5 million for 2012, compared to $54.2 million for 2011 and representing a record 29% annual adjusted EBITDA margin
  • Cash flow from operations was $78.0 million for 2012 compared to $14.9 million for 2011.…


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