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WebEx Reports Strong Third Quarter Results

WebEx Communications , a Web service provider that offers communications infrastructure for Internet-based conferences and meetings, yesterday announced impressive results for its third quarter, which ended September 30th, 2001.

Revenues for the quarter were $22.1 million, up 196 percent over the third quarter of last year when it reported revenue of $7.5 million.

The third quarter results also represent a 20 percent sequential increase over the second quarter of 2001 ($18.4 million).

In addition the substantial jump in revenue, San Jose, Calif.-based WebEx also reported an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) profit of $0.5 million (excluding equity-based compensation expense). This is compared to a loss of $3.1 million last quarter. Overall net loss for the quarter was $2.4 million or $0.06 per diluted share (excluding equity-based compensation expense), which compares favorably to last quarter's net loss of $5.1 million or $0.14 per diluted share.

"WebEx has achieved two important milestones during the quarter, EBITDA profitability and positive cash flow from operations exceeding $1 million," said Subrah Iyar, chairman and CEO of WebEx Communications. "I am pleased that we have now exceeded analysts' expectations for both revenues and earnings for the fifth consecutive quarter, especially in view of the difficult economic environment over the last few quarters."

In light of businesses reluctance to travel after the events of September 11th, the prospects look strong from WebEx and others in Web conferencing services market. Internet-based colloaborative meetings and sales presentations revenues have been increasing steadily over the past two years, according to industry analysts, but many companies that provide these services are reporting spikes of between 30 percent and 50 percent in the weeks following the World Trade Center attacks.

In a recent ASPnews article (see Conferencing ASPs Take Off After Tragedy), Lewis Ward, an analyst at Collaborative Strategies, said that he expected a a big bump in Q4, "that's going to drive Web conferencing on a growth path. The majority of that spike is on the service side, the ASPs." WebEx is listed as an ASPnews Top 20 ASP.