WebMD Health's revenue increases 11% to $162.7 million in fourth quarter 2014

WebMD Health Corp. (NASDAQ: WBMD), the leading source of health information, today announced fourth quarter and full year financial results for 2014.

"We are pleased to report financial results for 2014 that are at the high end of our revenue and earnings expectations," said David Schlanger, Chief Executive Officer, WebMD. "We deliver our content and tools on the platforms that our users and advertisers are interested in, and the result has been strong growth in both our mobile traffic and revenue. In 2014, 34% of our advertising revenue was delivered on a mobile device."

Financial Highlights
For the three months ended December 31, 2014:

• Revenue was $162.7 million, compared to $146.3 million in the prior year period, an increase of 11%. Advertising and sponsorship revenue was $127.0 million compared to $120.2 million in the prior year period. Private portal services revenue was $28.6 million compared to $21.9 million in the prior year period. Information services revenue was $7.1 million compared to $4.2 million in the prior year period.
• Earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA") was $48.1 million, compared to $40.6 million in the prior year period, an increase of 18%.
• Net income was $16.3 million or $0.38 per diluted share, compared to $10.8 million, or $0.25 per diluted share in the prior year period. Net income in the current year period would have been $15.2 million, or $0.36 per diluted share, without the effect of a $1.1 million after tax gain on discontinued operations resulting from the resolution of tax indemnification liabilities related to the 2009 sale of Porex. Net income in the prior year period would have been $11.8 million, or $0.27 per diluted share, without the effect of an after-tax loss on convertible notes of $1.0 million.

For the twelve months ended December 31, 2014:

• Revenue was $580.4 million compared to $515.3 million in the prior year period, an increase of 13%. Advertising and sponsorship revenue was $454.0 million compared to $417.0 million in the prior year. Private portal services revenue was $103.2 million compared to $82.1 million in the prior year. Information services revenue was $23.3 million compared to $16.2 million in the prior year.
• Adjusted EBITDA was $158.6 million compared to $122.9 million in the prior year, an increase of 29%.
• Net income was $42.1 million or $1.00 per diluted share compared to $15.1 million or $0.31 per diluted share in the prior year. In the current year, net income would have been $40.9 million, or $0.97 per diluted share, without the effect of the $1.1 million after tax gain on discontinued operations noted above. In the prior year, net income would have been $18.9 million, or $0.39 per diluted share, without the effect of an after-tax loss on convertible notes of $3.0 million and after-tax severance expenses of $0.8 million.

Traffic Highlights
Traffic to the WebMD Health Network during the fourth quarter reached an average of 190 million unique users per month generating 3.70 billion page views for the quarter, increases of 22% and 17%, respectively, from the prior year period.

Balance Sheet Highlights
During the quarter, WebMD used: $25.1 million in cash to repurchase 676 thousand shares of its common stock under its stock repurchase program. Under the repurchase program, WebMD may repurchase shares from time to time in the open market, through block trades or in private transactions, depending on market conditions and other factors.

As of December 31, 2014, WebMD had: approximately $707 million in cash and cash equivalents; $952 million in aggregate principal amount of convertible notes outstanding; and approximately 37.2 million shares of its common stock outstanding (including approximately 900 thousand unvested shares of restricted stock).

Subsequent to the end of the fourth quarter, WebMD used $3.2 million in cash to repurchase 84 thousand shares. As of today, approximately $32 million remains available for repurchases under its stock repurchase program.

Financial Guidance
Today WebMD issued financial guidance for the first quarter and full year 2015.

For the full year ending December 31, 2015, WebMD expects:

• Revenue to be approximately $615 million to $635 million, an increase of approximately 6% to 9% from the prior year.
  • Approximately $486 million to $502 million of revenue is expected to be from advertising and sponsorship, an increase of 7% to 11% from the prior year. Growth in advertising and sponsorship will be driven by growth in revenue from biopharma customers of approximately 12% to 15% in 2015.
  • Approximately $105 million to $108 million of revenue is expected to be from private portals services, an increase of 2% to 5% from the prior year.
  • Approximately $24 million to $25 million of revenue is expected to be from information services, an increase of 3% to 7% from the prior year.
• Adjusted EBITDA to be approximately $180 million to $190 million, an increase of approximately 13% to 20% from the prior year.
• Net income to be approximately $50.5 million to $59.5 million.

For the first quarter of 2015, WebMD expects:

• Revenue to be approximately $141 million to $143 million, an increase of approximately 5% to 7% from the prior year period.
• Adjusted EBITDA is expected to be approximately $37 million to $38 million, an increase of approximately 11% to 14% from the prior year period.
• Net income to be approximately $8.5 million to $9.5 million.

"The external environment for biopharma advertisers, our largest customer base, is robust and sales activity with these customers has been strong in recent quarters," said Mr. Schlanger. "As a result, we expect revenue from biopharma to grow 12% to 15% in 2015."

SOURCE WebMD Health Corp.