Homestore.com ended its first full year as a publicly traded company with 213% year-over-year growth in pro forma revenues, substantial increases in professional subscribers and unique visitors to its online network, and more than $345 million in cash on its balance sheet.
It is a pleasure to report another quarter of strong revenue growth and cash profitability at Homestore.com, said Stuart Wolff, the company’s chairman and chief executive officer. We have accomplished a great deal in the past 12 months, including the announcement of two exciting transaction platforms, the ongoing build-out of our ASP strategies and a long-term agreement with AOL that gives tremendous exposure to our consumer content. All of this is a great tribute to the hard work and execution of the entire Homestore.com team as we look forward to another strong year of growth in 2001, he added.
The company said revenues for the fourth quarter increased to $79.0 million, up 182% from pro forma revenues of $28.0 million for the fourth quarter of 1999, and up 27% from revenues of $62.2 million for the third quarter of 2000. The company’s gross profit margin was 73% in the fourth quarter compared to a pro forma gross profit margin of 71% in the fourth quarter of 1999, and 74% in the third quarter of 2000. Pro forma net income for the fourth quarter was $3.3 million, or $0.04 per share. That compares to pro forma net loss of $16.2 million, or $0.23 per share, for the fourth quarter of 1999 and pro forma net income of $554,000, or $0.01 per share, for the third quarter of 2000.
Pro forma net income and loss exclude the effects of non-cash charges for (i) amortization of intangible assets, (ii) stock-based charges, (iii) in-process research and development, (iv) litigation settlement, and (v) other expense representing accretion of distribution obligation. To enhance comparability, pro forma operating results assume that the acquisitions of SpringStreet.com(TM) and HomeFair.com(TM), as well as the reorganization of the company’s corporate structure, occurred on January 1, 1999.
On a GAAP basis, the company’s revenues for the fourth quarter of 2000 were $79.0 million, compared to $27.4 million for the fourth quarter of 1999 and $62.2 million for the third quarter of 2000. The net loss for the current quarter was $34.2 million, or $0.41 per share, compared to a net loss of $30.0 million, or $0.43 per share, for the fourth quarter of 1999, and $27.1 million, or $0.33 per share, for the third quarter of 2000.
Subscriptions generated approximately 52% of total revenues in the quarter. The improvement was due to an increase in the number of professionals on the Homestore.com(TM) family of Web sites as well as an increase in the average revenue per subscription, which was primarily due to increased sales of ASP products, most notably Top Presenter 2. The number of professional subscriptions rose to approximately 145,000 at December 31, 2000, an 11% increase from the total at September 30, 2000. Renewals also contributed to the increase in professional subscriptions with the renewal rate consistent with prior quarters at approximately 70%.
Advertising produced approximately 48% of total revenues in the quarter. Growth in advertising revenue was primarily driven by an increase in advertising and sponsorship deals during the quarter, including Bank of America, Budget Group, and Kodak. Also contributing to the increase in advertising revenue was the company’s expanded relationship with America Online, in which AOL sold advertising on the company’s behalf.
The average monthly number of unique users visiting the Homestore.com network rose to approximately 4.3 million, up 102% from the fourth quarter of 1999 and up 3% from the third quarter of 2000(1). Each unique user spent an average of 19.7 minutes per month on the network, up 11% from the fourth quarter of 1999, and down 16% from the third quarter of 2000.(1) Page views were 605 million for the quarter, up 67% from the fourth quarter of 1999, and down 13% from the third quarter of 2000. The decreases in average minutes per visit and page views from the third quarter of 2000 were consistent with the seasonally slower fourth quarter. One billion homes were viewed on the Homestore.com network during the period. The cumulative number of homes viewed since the company’s inception is now approximately 8.1 billion.
