Embedded browser company Spyglass Inc has turned in first-quarter 1998 numbers that show continued improvement in both revenue growth and the reduction of operating losses on a consecutive basis. Net loss for the quarter was $3.6m, or $0.28 per share, on revenue that rose 10% year-over-year – and 34% sequentially – to $4.3m. The results included a $496,000 acquisition charge related to the purchase of AllPen Software Inc in November (CI No 3,292). Net of the charge, net loss per share would have been $0.24, when Wall Street was expecting a loss of $0.32. While the $0.24 operating loss was slightly worse than last year’s first quarter numbers, it represents a vast improvement over the fourth-quarter loss of $0.38 per share. Licensing revenues increased 27% over the prior quarter and services – which now accounts for 40% of total revenue – saw 46% growth from the prior quarter. Spyglass says it is on the right track, with a more diversified source of revenues and a wider customer base, when only six quarters ago the company had one product – its Mosaic web browser. The expanded product line, an increase in licensing fees (up to 100%) during the first quarter and an ongoing reduction in cost structure (no staff reductions are planned) are expected to fuel Spyglass’ long-term recovery. Service fees should also see increases and the company reckons it can leverage its R&D spending in such a way as to make more of it billable in the service business. Just how fast the right moves can get the Naperville, Illinois company back into the black remains to be seen. It admits the increase in license fees shouldn’t have any significant effect on revenues until the June quarter. Analysts aren’t expecting a return to profitability until the fourth quarter 1999 and Spyglass says it’s comfortable with that timetable. In the meantime, more acquisitions are likely, and would probably be handled as stock transactions despite the fact that the company has $24.9m in cash on its balance sheet. Spyglass shares rose $0.375 to close at $6.125.