Ken Nagy, CFA
Margin Climbs at CrowdGather
On September 13, 2011, CrowdGather, Inc. (CRWG), with its networks of forum communities on the Internet, reported financial results for its fiscal 2012 first quarter, ended July 31, 2011.
The first quarter performance resulted in a 1.2 percent year over year increase in revenue, with revenue increasing to $334,036 from $330,079 for the three months ended July 31, 2010.
However, net loss came in weaker, increasing 41 percent year over year to a net loss $871,235. This compares to a net loss of $615,897 for the comparable quarter of fiscal 2011.
The increase in net loss for the three months ended July 31, 2011 was mainly due to higher payroll expenses from the hiring of new personnel in relation to strategic objectives and from operating activities resulting from the integration of the Company’s acquisitions of online properties.
Still, it should be noted that gross margin was strong, resulting in a 24 percent year over year increase in gross profit from $181,350 to $225,296 for the first quarter of fiscal 2012. Gross margin jumped from 54.9 percent in the first quarter of last year, up to 67.5 percent for the three months ended July 31, 2011.
Along the same lines, CrowdGather has restructured its efforts into pursuing revenue mainly from its forum network and expects to deploy its ad server technology across its hosted forums in an effort to capture higher margin revenues.
Total assets jumped to $17.989 million as of July 31, 2011, a 74 percent increase over total assets of $10.354 million on July 31, 2010. Total assets consisted mainly of $4.457 million in cash, $8.829 million of intangible assets, and $4.360 of goodwill which is represented by domain names and other intellectual property.
Furthermore, during the quarter ended July 31, 2011, CrowdGather’s monthly page views across all properties increased roughly 79 percent year over year to approximately 150 to 155 million while monthly unique visitors jumped from 4.5 million in July 2010 to 15 million.
Similarly, based upon current statistics from Google Analytics, the Company’s network of forums is generating approximately 230 to 235 million monthly page views and 20 to 23 million monthly unique visitors.
Additionally, in an effort to expand its reach and prominence as a leading network for forum members, owners and advertisers, CrowdGather acquired the additional properties pbnation.com and writers.net during the first quarter and recently closed the acquisition of yuku.com.
CrowdGather intends to continue to seek other opportunities to acquire strategic properties that are expected to contribute to increased traffic growth for the Company.
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