Salon Group reports Q2 earnings: robust revenue gains, though total numbers remain small
Revenues remain low at Salon, only $1.563 million in quarter, but growing, along with traffic
The last time I managed a property as small as Salon was at a B2B, and my message to the owner was “why are we bothering?” But at least Salon can report good growth – very good actually.
But if they are to get into the black they will need to get serious about adding more real estate. That is, places they can sell advertising, monetize traffic.
Here is the earnings release for Q2:
NEW YORK, NY – November 14, 2013 — Salon Media Group, Inc. (OTCQB: SLNM) today announced its results for the three months and six months ended September 30, 2013. Net revenue from continuing operations for the quarter ended September 30, 2013, was $1.6 million, an increase of 83% from the same period last year. For the six months ended September 30, 2013, net revenue was $2.8 million, an increase of 63% versus the same period last year.
Continued robust traffic at Salon.com resulted in $1.4 million in advertising revenues for the three months ended September 30, 2013, a 75% increase compared to the same period last year. For the six month period, ad revenues were $2.6 million, or an increase of 73% compared to the same period in the prior year. The improvement in the current quarter stemmed primarily from increased advertising sold by Salon’s internal sales team, which rose 125% to $0.9 million for the three months ended September 30, 2013 as compared to the three months ended September 30, 2012. This compares to the June 2013 quarter when the growth in advertising stemmed primarily from a dramatic increase in remnant ad sales which were $0.6 million for the June 2013 quarter.
Operating expenses for the three months ended September 30, 2013 rose 21% to $2.0 million compared to the same period last year. The $0.3 million increase resulted primarily from higher stock compensation costs and commissions paid to the advertising sales team. The company’s loss from operations for the September 2013 quarter declined to $0.5 million, a 43% reduction from the $0.8 million loss for the same period last year.
Overall, Salon has been able to achieve revenue growth without a corresponding increase in operating expenses. Excluding the impact of discontinued operations, operating expenses for the six months ended September 30, 2013 declined 2% to $3.9 million compared to the same period last year. The $0.1 million decrease resulted primarily from tight control of expenses. Controlling the increase in expenses helped to narrow the company’s loss from continuing operations to $1.2 million for the six months ended September 30, 2013, a 52% reduction from the $2.4 million loss for the same period last year.
An important factor in increasing advertising revenues in future periods is growth in Salon’s audience, as measured by monthly unique traffic growth. Salon.com’s traffic in the second quarter ended September 30, 2013 increased 8% compared to the same 2012 quarter and was consistent with June 2013 quarter, according to data compiled by Google Analytics. However, unique visitors in the quarter ended September 2012 included traffic to an affiliated website that has since been shut down. Excluding the traffic from the affiliated website, unique visitors to the Salon.com website in the quarter ended September 2013 increased 67% compared to the September 2012 quarter, pointing to consistent growth in readership at the core brand.
Salon also experienced a 90% increase in mobile browser traffic in the September 2013 quarter, compared to the same quarter last year. With 40% of users visiting the Website from mobile devices, a significant shift is underway in the platforms from which users access our content. The entire company is focused on providing the best possible experience on mobile, from content delivery to unique advertising implementations.
Social referral traffic was also strong, growing 9% in the September 2013 quarter versus the June 2013 quarter, and 88% compared to the same period in the prior year. Facebook continues to be the largest social referral, and grew 9% compared to the June 2013 quarter and 83% versus the September 2012 quarter. Twitter also saw rapid growth in referrals with an increase of 19% compared to the June 2013 quarter, and 152% compared to the September 2012 quarter.
“Salon has continued to make progress in the September quarter towards achieving a sustainable and profitable business,” said Cynthia Jeffers, CEO and CTO of Salon Media Group. “The recent strong growth in advertising revenue was the result of our innovative advertising campaigns, a focus on improving the user experience across platforms, and our ongoing pursuit of excellence in journalism.”