TheStreet.com Reports Second-Quarter 2006 Financial Results

Business Wire, July 27, 2006

NEW YORK -- TheStreet.com, Inc. (Nasdaq: TSCM), a leading provider of financial commentary, analysis and news, today announced its financial results for the second quarter 2006, which included a year-over-year net revenue increase of 60%, with advertising and subscription revenue increasing 76% and 57%, respectively.

"Our strategy has been to grow both sides of our business -- advertising and subscriptions - so that each one would be a strong revenue driver for the company," said Thomas J. Clarke, Jr., chairman and chief executive officer of TheStreet.com. "It is rewarding to see the success of each revenue stream reflected in our second- quarter results.

Second-Quarter 2006 Results

--Net income for the quarter was $3.2 million, a $5.5 million improvement over the same period last year and a $0.7 million improvement from last quarter.

--Basic earnings per share for the quarter were $0.12, a $0.21 improvement over the same period last year and a $0.02 improvement from last quarter.

--Net revenue was $12.4 million in the second quarter, a 60% increase over the same period last year and an 11% increase from last quarter.

--Total cash flow for the quarter was $6.0 million, a $5.0 million improvement over the $1.0 million cash flow for the same period last year, and a $0.2 million improvement from last quarter's cash flow of $5.8 million.

--Deferred revenue, a key metric of the Company's subscription business performance, was $13.2 million, a 45% increase over the same quarter last year and an increase of 6% from last quarter.

--Cash, restricted cash and marketable securities stood at $45.9 million as of June 30, 2006, a 55% increase over the same period a year ago and a 15% increase from last quarter. The Company has no bank debt.

Revenue Streams

--Subscription revenue for the quarter totaled $8.4 million, a 57% increase over the same period last year and an increase of 10%, or $0.8 million, from last quarter's $7.6 million. The number of paid subscribers to the Company's premium services increased by approximately 3,800, or 4%, during the quarter.

--Advertising revenue for the quarter totaled $3.7 million, a 76% increase over the same period last year and a 14% increase from last quarter. In the second quarter, page views increased 98% over the year-ago period and decreased 3% from the previous quarter. The average number of unique visitors per month in the quarter was 4.4 million, a 57% increase over the year-ago period and a 3% sequential decrease.

--Subscription bookings for the quarter totaled $9.2 million, an increase of 39% over the $6.6 million in the same period last year and a decrease of 9% from last quarter's $10.1 million.

Operating Expenses

--Second-quarter operating expenses were $9.6 million, a 54% increase over the $6.3 million recorded in the same period last year and a 9% increase from last quarter's $8.9 million.

Recent Company Highlights

--The Company's top five advertisers include two non-financial firms, consistent with the Company's increased appeal to advertisers outside of the financial space. Non-financial advertising revenue increased 47% over the same period a year ago.

--Farnoosh Torabi, formerly of New York 1 News, was hired as TheStreet.com's first full-time video correspondent. The Company continues to increase the amount of video content it makes available and now offers 11 program categories with multiple advertising sponsors.

--The Company became a major provider of ticker-based news headlines for MSN's Money channel. MSN Money also hosts a summary of the Company's popular article, The Five Dumbest Things on Wall Street This Week.

--The Company launched a new free advertising supported newsletter called "The Daily Booyah," which features content from our "RealMoney with Jim Cramer" radio show and from Jim Cramer's television show, Mad Money.

--The board of directors declared the Company's second quarterly cash dividend, payable to all shareholders of record at the close of business on June 15, 2006. The cash dividend of $0.025 per share was paid on June 30, 2006.

--TheStreet.com was named a finalist for a 2006 Gerald Loeb Award for Distinguished Business and Financial Journalism in the News Services and Online Content category. The nomination recognized TheStreet.com's extensive coverage of the Securities and Exchange Commission's investigation into several brokerage firms leaking information in their morning "squawk box" calls. The nomination included five articles written by Matthew Goldstein, a senior writer for TheStreet.com. This marked the Company's fourth Loeb nomination within the past three years.

--Wedbush Morgan Securities, Inc., a leading regional investment banking and brokerage firm, initiated coverage of TheStreet.com.

--TheStreet.com joined the Russell 3000(R) Index on June 16, 2006.

TheStreet.com will conduct a conference call today, July 27, 2006, at 11:00 a.m. EST to discuss these results. The Company welcomes all interested parties to listen to the Web cast of its call at http://www.vcall.com/IC/CEPage.asp?ID=106956