• by Paul Gough , August 9, 2002

24/7 Real Media Inc. declared itself on the road to profitability as it released Q2 earnings that showed a narrower loss and signs of growth.

The New York-based company reported a $4.24 million loss, or 8 cents a share, in Q2 2002 compared to a $53.82 million loss, or $1.23 per share, a year ago. The loss broke down to $28.82 million from continuing operations and $25 million from discontinued operations, which includes 24/7 Mail that was sold in May to Naviant Inc.

Taking 24/7 Mail into account, Q2 revenues were $10.58 million compared to $11.68 million in Q2 2001. But excluding 24/7 Mail and using a quarter-to-quarter yardstick, the company's revenue increased 7.8% from $9.5 million in Q1 to $10.2 million in Q2.

24/7 Real Media Inc. said it had managed to lower its loss in continuing operations to $3.1 million in Q2 compared to $3.7 million in Q1.

"We're well on our way to turnaround," CEO David J. Moore said in a conference call announcing the results Thursday afternoon. He and other 24/7 Real Media executives credited strong sales in some areas, aggressive cost-cutting and the sale of 24/7 Mail for $4 million, including $1 million in cash in Q2.

"Improvement has come in all areas of the business," said CFO Norman Blashka. The Open AdStream Central product grew rapidly in Q2, offsetting a drop in revenue from Open AdStream Local that occurred because of high sales in Q1. COO Tony Plesner said both products have been taking customers away from their rivals, particularly the DoubleClick ad-serving technology. ABC Television, eMarketer and Vivendi Universal Net USA's sites were among those that switched during Q2, 24/7 Real Media said.

Revenues for 24/7 Website Results search-engine marketing jumped 36% from Q1 with deals with Ask Jeeves and Terra Lycos. 24/7 Real Media expects revenue growth between 5% and 10% in Q3 during what it terms a traditionally weak quarter but also slightly higher operating expenses associated with the launch of its Open Advertiser product for agencies and advertisers.

"We're in a position to look forward to growing revenues," Blashka said.

Moore said 24/7 Real Media's sales have proven that its strategy of becoming a "one-stop shop" for customers was correct. He pointed to the customers choosing 24/7 Real Media products over the competition. Open Advertiser is being used by two dozen agencies in Europe and should be in the United States by year's end. Executives said initial feedback has been positive. Moore said 24/7 Real Media was poised for continued growth.

"Any residual rumors of our demise are greatly exaggerated," he said. "We' re here to stay."

The earnings statement came out after the market's close. 24/7 Real Media closed at 22 cents a share unchanged in NASDAQ trading Thursday.