AOL, Inc. released the results from its first quarter, posting diluted earnings of 11 cents on and basic net income of 12 cents per share on $583.3 million in revenue, an 8% increase year over year. Analysts had been expecting earnings of 45 cents per share on $577.7 million in revenue.
Breaking down AOL’s results
The company grew its ad revenue 16% year over year, with the main driver being its Third Party Platform, which recorded 55% revenue growth. AOL’s global display revenue fell 3% due to about $10 million missing from brands which are either shut down or de-emphasized. Excluding those impacts, the segment grew 4%. AOL also posted a 1% decline in global search revenue, with the main driver being a decline in AOL core search queries, which was partially offset by more queries from search marketing.
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AOL subscription revenues fell 10% year over year. Domestic monthly average churn rate was 1.5% in the first quarter, compared to AOL, Inc. (NYSE:AOL) 1.9% in the same quarter a year ago.
AOL’s earnings impacted by restructuring
The company noted that this is the fifth consecutive quarter of revenue and profit growth and the seventh consecutive quarter of growth in unique visitors. The company also grew its multi-platform users by 26% year over year and noted that this is the first time in three years in which it has posted first quarter adjusted OIBDA growth.
AOL’s Brand Group segment posted declining revenue due to the absence of revenue from Patch. Revenue from the Membership Group segment included the 10% subscription revenue decline, as the number of domestic AOL subscribers fell 9%. Increases in average revenue per user and the decline in churn rate partially offset the decline in subscription revenue.
AOL Platforms saw a 43% year over year increase due to big growth in Third Party Platform, which includes Adap.tv. Excluding that segment, revenue from Platforms grew about 19% year over year as AOL posted growth in premium ad formats.