Over the years, Web.com (NASDAQ: WWWW) has built a strong offering of online marketing services for small and medium size businesses (SMBs). Of course, in light of the recession, business has been particularly tough. Yet, Web.com continues to manage things – and is finding ways to capitalize on the opportunities.
In Q1, the company posted revenues of $27.8 million, which compares to $30.9 million in the same period a year ago. Net income was $900,000 or 3 cents per share. Also, cash flows from operations came to $5.7 million.
In all, Web.com has a customer base of 265,000. More importantly, there has been strong improvement in the churn rate, which was 3.9% in Q1 (an all-time low).
And, to help boost things even more, Web.com has been pursing a targeted acquisition strategy. For example, the latest deal came last week with the purchase of Solid Cactus, which develops ecommerce solutions.
While the economy will probably remain a drag, Web.com should find good M&A opportunities to bulk up its customer base. So, when things come back, the company will be in a nice position to benefit.
So far in today's trading, the shares in Web.com are up 2% to $4.34.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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