aQuantive Announces Record Fourth Quarter and Annual Financial Results; Revenue, Net Income and EBITDA exceed Guidance

Business Wire, Feb 15, 2006

SEATTLE -- Conference Call and Webcast at 1:30pm PST/4:30pm EST Today

aQuantive, Inc. (Nasdaq:AQNT), a digital marketing company, today reported financial results for the fourth quarter and year ended December 31, 2005.

2005 fourth quarter results were:

--Revenue of $87.5 million, an increase of 44 percent over the fourth quarter of 2004.

--Net income of $11.6 million, or $0.15 per diluted share, an increase of 63 percent over the fourth quarter of 2004.

--EBITDA(1) of $25.9 million, or $0.33 per diluted share, an increase of 94 percent over the fourth quarter of 2004.

2005 annual results, which include contributions from all acquisitions made during 2004 and 2005, were:

--Revenue of $308.4 million, an increase of 95 percent over 2004

--Operating income of $61.0 million, an increase of 130 percent over 2004

--EBITDA of $79.1 million, or $1.03 per diluted share, an increase of 122 percent over 2004

"2005 was another tremendous year for aQuantive. We experienced rapid growth and excellent financial results across all of our operating units," said Brian McAndrews, president and CEO of aQuantive. "As we enter 2006, I believe that we are in the early stages of a major shift from analog to digital in the media and advertising worlds. And aQuantive is in a great position to play a key role in that transformation. We intend to make appropriate investments in people and technology in order to capitalize on this great opportunity."

aQuantive operates three business segments. Segment information is as follows:

Digital Marketing Services

Avenue A | Razorfish, aQuantive's digital marketing services (DMS) segment, recorded revenue of $53.9 million in the fourth quarter of 2005, compared to revenue of $36.7 million in the fourth quarter of 2004. Operating income was $11.4 million in the fourth quarter of 2005, compared to $3.8 million in the fourth quarter of 2004.

Annual DMS revenue was $189.8 million in 2005, compared to revenue of $87.7 million in 2004. Operating income was $31.9 million in 2005, compared to $13.0 million in 2004.

In December 2005, Avenue A | Razorfish acquired DNA, a U.K.-based interactive agency, marking its first significant entry into international digital marketing.

Digital Marketing Technologies

Atlas, aQuantive's digital marketing technologies (DMT) segment, recorded revenue of $25.7 million in the fourth quarter of 2005, compared to revenue of $18.9 million in the fourth quarter of 2004. Operating income was $11.9 million in the fourth quarter of 2005, compared to $9.2 million in the fourth quarter of 2004.

Annual DMT revenue was $92.3 million in 2005, compared to $60.9 million in 2004. Operating income was $42.9 million in 2005, compared to $26.1 million in 2004.

Digital Performance Media

DRIVEpm and MediaBrokers, aQuantive's digital performance media (DPM) segment, recorded revenue of $7.9 million in the fourth quarter of 2005, compared to revenue of $5.1 million in the fourth quarter of 2004. Operating income was $1.9 million for the fourth quarter of 2005, compared to $645,000 in the fourth quarter of 2004.

Annual DPM revenue was $26.4 million in 2005, compared to $9.4 million in 2004. Operating income was $4.9 million in 2005, compared to a net loss of $70,000 in 2004.

2006 Financial Guidance

In 2006, the Company will provide guidance for revenue, net income, Adjusted EBITDA(2) and net income before share-based compensation(3), for comparability with historical results, due to the adoption of Statement of Financial Accounting Standards No. 123R "Share Based Payment" in January 2006. Share-based compensation expense is expected to have a significant impact on our net income and earnings per diluted share, as noted below. Actual share-based compensation expense may differ from these estimates based on the timing and amount of options granted, the assumptions used in valuing these options and other factors.

Accordingly, the Company forecasts full year 2006 results as follows:

--Revenue of $375 -- $395 million

--Net income before share-based compensation of $0.57 -- $0.61 per diluted share

--Adjusted EBITDA of $1.19 -- $1.25 per diluted share

--Net income of $0.40 -- $0.44 per diluted share

The Company anticipates first quarter results as follows:

--Revenue of $82 -- $85 million

--Net income before share-based compensation of $0.08 -- $0.10 per diluted share

--Adjusted EBITDA of $0.19 -- $0.23 per diluted share

--Net income of $0.04 -- $0.06 per diluted share

(1) EBITDA (i.e. earnings before interest expense, net interest and
    other income, income tax, depreciation and amortization) is a
    non-GAAP financial measure. See the supplemental schedule of
    EBITDA reconciliation to GAAP net income for the three and twelve
    months ended December 31, 2005 and 2004.

(2) Adjusted EBITDA (i.e. earnings before interest expense, net
    interest and other income, income tax, depreciation amortization
    and share-based compensation) is a non-GAAP financial measure. See
    the supplemental schedule attached to this press release for more
    information.

(3) Net income before share-based compensation (i.e. net income before
    the after tax impact of share-based compensation expense) is a
    non-GAAP financial measure. See the supplemental schedule attached
    to this press release for more information.