iWeb Communities: Blog

This morning iWeb sent out a press release with the results for the first quarter of the 2009 fiscal year. Our growth, which is defined in revenue (or income) remains strong and consistent; our numbers have almost doubled compared to the first quarter of 2008; 92% growth, to be exact. 

As Martin and Eric, iWeb’s 2 co-founders, explain in the press release, this is the result of hard work, and the current economic situation means that we have to work hard to earn every new customer – but it also means that people are expecting more value for their hosting dollar, which is pretty much a good thing.

The press release also included talk about the re-engineering of our customer service department, which has started delivering results – the restructuring should be complete in September. As Eric explained during iWeb’s first ever conference call with Financial analysts, “supporting 20 000 customers is very different than supporting 5 000 customers”.  Indeed it is; it’s not just a question of simply adding more people – that would be too easy…

The press release also mentions that iWeb lost 1.2 M$, but only theoretically. Huh?

Here is how that works out: last year iWeb completed a financing deal with Investment Banking Giant Goldman Sachs, which included 10M$ USD in debt, due in 5 years. At the time, that meant more or less 10,6 Million in Canadian dollars. Because the exchange rate has changed in the last quarter (October, November and December), that 10 Million USD is now closer to 12 Million is CAD$ – except that the debt is only due in 5 years. So in reality nothing has changed, really, except the theoretical cost of repaying our debt, if the exchange rate does not change in the next 5 years. Accounting rules say that we have to declare this difference right away, which is the reason for our loss.

Without the theoretical loss, iWeb’s numbers are pretty much at break even (11 K$ profit, in fact), and EBITDA doubled to 1.6 M$.