Q9 Networks Reports Record Third Quarter 2005 Results

HostReview.com
Friday, September 9, 2005; 04:07 PM

Q9 Networks Inc. (www.Q9.com), a Canadian provider of outsourced Internet infrastructure and related managed services, today announced its financial results for the third quarter ended July 31, 2005.

Revenue for the third quarter 2005 was $10.00 million, an increase of 52% from third quarter 2004 revenue of $6.59 million and a 13% increase over second quarter 2005 revenue of $8.83 million (all figures expressed in Canadian dollars).

Co-location revenue for the third quarter 2005 was $4.53 million, managed bandwidth revenue was $1.62 million and managed services revenue was $3.59 million.

EBITDA for the third quarter 2005 was $2.92 million, up 278% or $2.15 million over the same period last year and a $0.47 million or 19% improvement over the second quarter 2005. Please see the attached EBITDA definition and reconciliation to net income (loss) for the period.

Net income for the third quarter 2005 was $0.69 million compared to a net loss of $1.30 million for the third quarter 2004 and net income of $0.17 million for the second quarter 2005. Basic and diluted earnings per share for the third quarter 2005 were $0.03 compared to a loss per share of $0.06 in the same quarter 2004.

Cash flow generated from operations for the third quarter, 2005 was $2.86 million, marking the Company's eighth consecutive quarter of positive cash flow. The Company ended the quarter with cash, cash equivalents and short-term investments of $74.11 million and no long-term debt outstanding.

Based on preliminary plans, the Company expects that it will commission an additional 1,100 normalized cabinet equivalents over the next 12 months through the expansion of its existing Toronto data centre and the construction of a new downtown facility.

"I am delighted to report yet another record-breaking quarter," says Osama Arafat, CEO, Q9 Networks. "Demand across all service offerings increased during the period. Existing customers accounted for a significant portion of our incremental revenue growth, once again demonstrating their high regard for our services and their willingness to outsource ever-larger components of critical infrastructure to a trusted provider. With strong momentum entering the fourth quarter, 2005 is shaping up to be an excellent year for Q9."