* Revenue increases 74% year-over-year * Earnings highest in company history
SANTA BARBARA, Calif., Feb. 14, 2007 (PRIME NEWSWIRE) -- Warp 9, Inc. (OTCBB:WNYN), the premier provider of robust and scalable e-commerce platforms and services, today announced financial results for its second fiscal quarter ended December 31, 2006.
Total revenue for the quarter was $903,754, an increase of 74% from the year ago quarter's $518,146. The dramatic increase in revenue was primarily due to an increase in recurring monthly fees from our e-commerce software as a result of a larger customer base that is experiencing higher sales volumes, and a general increase in professional services from having more customers.
The cost of revenue for the three-month period ended December 31, 2006 was 23% of gross revenue as compared to 31% of gross revenue for the three-month period ended December 31, 2005. This decrease in cost of revenue is due to the increased sale of higher profit margin products and services. Total operating expenses for the three month period ended December 31, 2006 decreased by $83,759 to $569,800 from $653,559 in 2005.
For the three months ended December 31, 2006, our consolidated net income was $108,376 as compared to a consolidated net loss of ($395,762) for the three months ended December 31, 2005. We achieved a consolidated net income because of the elimination of costs previously associated with the Roaming Messenger operation, and an increase in holiday season revenues along with a general increase in customers for Warp 9 e-commerce products and services.
Harinder Dhillon, Warp 9's CEO, while acknowledging the seasonality of the quarter, nonetheless expressed optimism that the revenue growth on a year-to-year comparison would continue. "We are pleased to report the overall improvement in revenue and in net earnings, and we expect that Warp 9 revenue growth will continue."
Mr. Dhillon concluded by commenting on the quality of earnings, noting that the reductions in expenses have resulted in a fundamental reset of the company's overall expense structure, but emphasized: "The most important factor in the recent improvement in quality of the financial picture is that we are selling more of a more profitable blend of products and services; the marketplace has been very receptive to what we are providing."
About Warp 9
Warp 9, Inc. is the premier provider of robust e-commerce platforms and services for the catalog and retail industry. Its comprehensive and scalable suite of software platforms are designed to help online retailers maximize the Internet channel by applying Warp 9's advanced technologies for online catalogs, e-mail marketing campaigns, and interactive visual merchandising. With a proven track record and years of experience in the industry, Warp 9 helps businesses leverage the Internet channel to lower costs and increase sales. Offered on a fully managed software-as-a-service model, Warp 9 products allow customers to focus on their core business, rather than technical implementations. Warp 9 powers some of the most successful e-commerce sites for companies like Magellan's, 1-800-Flowers, and Spiegel. For more information, please visit the Company's website at http://www.warp9inc.com.
Safe Harbor Statement
Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.