Constant Contact continues to drive revenue growth for Endurance International Group, which reported mixed results on Tuesday amidst a transition that includes a search for a new CEO.
The company announced 2017 Q2 revenue of $292.3 million, a 0.5 percent year-over-year gain, and earnings per share of $-0.29. The quarterly revenue beat analyst estimates by $2.9 million, while EPS missed by $-0.11, according to the announcement.
Endurance also reported adjusted EBITDA of $82.5 million, from over 5.2 million subscribers with an average revenue of $18.52 per month. GAAP revenue was up 1 percent, and adjusted EBITDA was up 7 percent from Q2 2016. Cash flow from operations was down 9 percent. Its net loss increased from $33.4 million a year earlier to $35.4 million.
The company lost about 87,000 subscribers from the end of Q1 on March 31, though founder and CEO Hari Ravichandran attributed the change to normal churn and seasonal variation in an earnings call. While quarterly ARPS for email marketing rose over $1.50 to $61.88, it declined by $0.09 for web presence, making email marketing the source of one-third of Endurance’s revenue and “hosting and related add-ons” the source of 49 percent.
Endurance revised its fiscal 2017 guidance upward for GAAP revenue, from a 4 to 5 percent increase to 5 to 5.5 percent, and adjusted EBITDA from a 12 to 14 percent increase to 14 to 16 percent. Its free cash flow for the year is now expected to increase by 25 percent rather than 35 percent. It also announced it has refinanced term loans, extending their maturity from 2019 to 2023, in a move it expects to reduce annual interest payments.
“Our second quarter performance reflected our continued drive toward meeting our 2017 operational and strategic goals,” commented Ravichandran. “We are pleased with our overall results. Performance in our web presence segment was in-line with expectations while we focused on targeting high-value hosting subscribers. Constant Contact demonstrated steady revenue growth and margin expansion. Our year to date performance, along with our outlook for the remainder of the year, have reinforced our belief that our plans for 2017 are setting a strong foundation and positioning us for profitable growth and strong cash flows in future years.”
The company said in the announcement that during the second half of 2017 it will roll out a new Bluehost WordPress product, enhance cross-selling opportunities and progress toward a relaunch of its site builder.
Endurance announced in April that it is looking for a new CEO to replace Ravichandran.