Leading Web hosting service provider reports: fourth quarter EBITDA increases 54% with a 16% increase in revenue

ANDOVER, Mass., Nov 03, 2008 (BUSINESS WIRE) NaviSite, Inc. (NAVI) a leading provider of enterprise hosting solutions and application services, today reported financial results for the fourth quarter and full fiscal year 2008 that ended on July 31, 2008.

— Total revenue for the quarter ended in July 31, 2008 was $40.2 million representing a year-over-year increase of 16% and sequential increase of 2%. Total revenue for the full fiscal year 2008 was $154.6 million representing a 22% increase over revenue of $126.2 million in fiscal year 2007.
— Recurring hosting revenue was $34.4 million for the fourth quarter representing a year-over-year increase of 22% and a sequential increase of 4%. Recurring hosting revenue for the full fiscal year was $131.3 million representing an increase of 24% over the revenue of $105.8 million in fiscal year 2007.
— EBITDA, excluding impairment costs, stock-based compensation, severance, costs related to discontinued operations, and other non-operational charges (“EBITDA”), for the fourth quarter was $10.1 million representing a year-over-year increase of 54% and a 17% sequential increase. EBITDA for the full fiscal year 2008 was $34.2 million representing an increase of 48% over EBITDA of $23.1 million in fiscal year 2007. EBITDA for the fourth quarter of fiscal year 2008 includes a $1.6m settlement gain.
— Income from operations for the fourth quarter was $1.4 million representing a 45% year-over- year increase. Income from operations for the full fiscal year 2008 was $5.0 million representing an increase of 122% over income from operations of $2.3 million in fiscal year 2007.
— Net loss attributable to common shareholders for the fourth quarter was $1.2 million, or $(0.04) per share, representing a reduction of 93% from the loss of $17.1 million reported in the fourth quarter of fiscal year 2007. Net loss attributable to common shareholders for the full fiscal year 2008 was $11.3 million or $(0.33) per share compared to a loss of $25.9 million or ($0.85) per share for the fiscal year 2007. Net loss for the fourth quarter of fiscal year 2008 includes a $1.6m settlement gain.

“We are pleased with the results in the fourth quarter where significant progress was made driving organic hosting revenue growth and in the achievement of a record quarter of EBITDA .” said Arthur Becker, Chief Executive Officer of NaviSite. “Despite a slowing economic climate and a challenging environment for professional services, demand for our Enterprise Hosting services was robust as shown by our $1.0m of new hosting recurring bookings and the 4% sequential growth in our hosting revenue.”

— Booked approximately $1.0 million of new monthly recurring hosting revenue (MRR) in the fourth quarter bringing the full fiscal year 2008 new MRR bookings total to $3.8 million which represents a 19% increase over $3.2 million recorded in fiscal year 2007
— Signed $34.3 million of total hosting contract value with an average contract term of 35 months during the fourth quarter for recurring applications services and enterprise hosting business
— Signed professional services contracts with a total value of $4.2 million during the fourth quarter compared to $3.7million in the third quarter of fiscal year 2008 and $6.5 million in the same period of FY07.
— Customer churn, defined as the loss of a customer or a reduction in a customer’s monthly revenue run rate from our overall active customer pool, was 1.2% per month during the quarter compared to 1.3% in the prior quarter and 2.5% a year ago.

Guidance:
NaviSite will provide guidance for the first quarter of fiscal year 2009 on its earnings call.