Web Hosting Provider Hostopia Announces 1Q Results 2007

Hostopia reports on their financial results for the first quarter ended 2007; reports 29th consecutive quarter of higher revenues

Aug. 14, 2007 - (TopHosts News Brief) - Hostopia.com Inc. (TSX: H) released its unaudited financial results for the first quarter ended June 30, 2007 (in U.S. dollars).

- Q1 revenue increased 15.9% year over year, 6.8% sequentially from Q4
- 29th consecutive quarter of increasing revenue
- 15th consecutive quarter of positive operating income
- Acquired leading wireless syncing technology from Nexthaus, Inc.
- Added 3,000 end users and 375,000 email accounts
- Subsequent to the end of the quarter, entered into a patent license
agreement with j2 Global Communications, Inc. for fax-to-email
services.

“We are pleased with our first quarter financial and operational results,” Colin Campbell, Hostopia’s CEO, said in a company press release. “The company showed good revenue growth, driven by the 375,000 email accounts we migrated in the quarter. Operationally we also made significant progress preparing for a very large United Kingdom website migration that will be largely completed in our second quarter. These migrations on their completion will help accelerate our revenue growth and improve our profitability over the remainder of the year.”

For Financial Results of First Quarter of Fiscal 2008, revenues increased 15.9% to $6.3 million in the three months ended June 30, 2007, compared to the same period last year, marking the 29th consecutive quarter of higher revenues.

Gross profit of $5.4 million increased by $660,000 in the first quarter compared to last year as higher revenues were partially offset by a 1.5% decline in gross margin. Income before interest and income taxes was $385,000, down $411,000 from the first quarter of last year.

Over the remainder of the year, as revenues continue to grow, both from existing and expanding customer base as well as additional product offerings, Hostopia expects quarterly income before interest and taxes will improve back towards and then through the level achieved in fiscal 2007.

Mr. Campbell added: “Our investment in Website Experts and Nexthaus, while lowering profitability in the short-term, positions us for strong long-term revenue and profit growth. We intend to keep investing in the business both organically as well as by opportune acquisitions of businesses with technology or end-users. I am also very excited by the opportunity presented by our recently acquired ability to sell j2 Global’s patented fax-to-email applications to our current
and future customers.”

For more information, visit http://www.hostopia.com.