AQUANTIVE ANNOUNCES THIRD QUARTER RESULTS

 

SEATTLE – Nov. 2, 2006 – aQuantive, Inc. (NASDAQ: AQNT), a digital marketing company, today reported financial results for the third quarter ended September 30, 2006.  

2006 third quarter results were:  

           Revenue of $111.0 million, an increase of 41 percent over the third quarter of 2005. 

           Net income of $13.6 million, or $0.16 per diluted share.  Net income before stock-based compensation¹ was $16.3 million, an increase of 73 percent over the third quarter of 2005.

           Adjusted EBITDA² of $30.8 million, an increase of 51 percent over the third quarter of 2005. 

Brian McAndrews, president and CEO of aQuantive commented, “The market for interactive marketing service and technology is robust.  aQuantive achieved strong year-over-year growth domestically and internationally.  With the investments we continue to make in technology, recruiting and training, sales and international expansion, we anticipate continued strong growth in the fourth quarter and 2007.” 

aQuantive operates three business segments.  Unallocated corporate expenses, including amounts recorded for stock-based compensation expense, are centrally managed at the corporate level and are not included in the segment details.  Segment information is as follows: 

Digital Marketing Services 

aQuantive’s digital marketing services (DMS) segment recorded revenue of $67.7 million in the third quarter of 2006, compared to revenue of $48.5 million in the third quarter of 2005.  Operating income was $14.3 million in the third quarter of 2006, compared to $8.9 million in the third quarter of 2005. 

During the third quarter, Avenue A | Razorfish acquired two interactive agencies in international markets, Amnesia in Australia and NEUE DIGITALE in Germany, followed by the fourth quarter acquisition of e-Crusade in Hong Kong and Shanghai.  

Digital Marketing Technologies 

aQuantive’s digital marketing technologies (DMT) segment recorded revenue of $29.9 million in the third quarter of 2006, compared to revenue of $23.5 million in the third quarter of 2005.  Operating income was $12.2 million in the third quarter of 2006, compared to $10.6 million in the third quarter of 2005.  

Digital Performance Media

aQuantive’s digital performance media (DPM) segment recorded revenue of $13.4 million in the third quarter of 2006, compared to revenue of $6.8 million in the third quarter of 2005.  Operating income was $2.7 million for the third quarter of 2006, compared to $1.0 million in the third quarter of 2005.

Full Year 2006 Financial Guidance 

The Company will provide guidance for revenue, net income, net income before stock-based compensation¹ and adjusted EBITDA².  Stock-based compensation expense is expected to have a significant impact on our net income and earnings per diluted share, as noted below.  Actual stock-based compensation expense may differ from these estimates based on the timing and amount of options granted, the assumptions used in valuing these options and other factors. 

Accordingly, the Company reiterates its anticipation of full-year 2006 results as follows: 

           Revenue of $420 - $430 million

           Net income of $0.54 - $0.58 per diluted share

           Net income before stock-based compensation of $0.67 - $0.71 per diluted share

           Adjusted EBITDA of $1.28 - $1.33 per diluted share  

¹  Net income before stock-based compensation (i.e. net income before the after tax-impact of stock-based compensation expense) is a non-GAAP financial measure.  See the supplemental schedule attached to this press release for more information.

²  Adjusted EBITDA (i.e. earnings before interest expense, net interest and other income, income tax, depreciation, amortization and stock-based compensation) is a non-GAAP financial measure.  See the supplemental schedule attached to this press release for more information.    

Third Quarter 2006 Conference Call/Webcast Today at 1:30pm PST/4:30pm EST

aQuantive, Inc. will host a conference call and webcast to discuss third quarter 2006 financial results today at 1:30pm PST/4:30pm EST.  The conference call will be webcast from the Investor Relations section of the Company’s website at www.aquantive.com/investor.  Interested parties should log on to the webcast approximately 15 minutes prior to download any necessary software.  The webcast is not interactive. 

About aQuantive, Inc.

aQuantive, Inc., is a global digital marketing company, founded in 1997 to help marketers acquire, retain and grow customers across all digital media.  It is the parent company of Avenue A | Razorfish, the largest interactive agency in the U.S., and four international agencies, DNA, Amnesia, NEUE DIGITALE and e-Crusade; Atlas, a provider of integrated digital marketing technologies and expertise; and DRIVEpm, MediaBrokers and Franchise Gator, performance media and behavioral targeting businesses. Through its business units, aQuantive is positioned to bring value to any interaction in the digital marketplace.  Its stock (ticker symbol: AQNT) is listed on the NASDAQ exchange.  aQuantive’s website address is www.aquantive.com.   

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as "expects," "anticipates," "forecasts," and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Forward-looking statements also include any other passages that relate to expected future events or trends that can only be evaluated by events or trends that will occur in the future.  The forward-looking statements in this release include, without limitation, statements regarding expected financial performance for the full year 2006, including expected stock-based compensation expense for those periods. The forward-looking statements are based on the opinions and estimates of management at the time the statements were made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include, among others, the risk of unforeseen changes in client online marketing and advertising budgets, unanticipated loss of clients or delays in anticipated campaigns and projects, the potential failure to attract new clients due to the company's inability to competitively market its services, the risk of fluctuating demand for the company’s services, the potential failure to maintain desired client relationships or to achieve effective advertising campaigns for clients, potential deterioration or slower-than-expected development of the Internet advertising market either domestically or in international markets, quarterly fluctuations in operating results, timing variations on the part of advertisers to implement advertising campaigns, costs and risks related to acquisitions of technologies, businesses or brands, risks relating to international operations, the short term nature of the company's contracts with clients, which generally are cancelable on 90 days' or less notice, and the uncertainties, potential costs, and possible business impacts of new legislation or litigation involving the company. More information about factors that could cause actual results to differ materially from those predicted in aQuantive's forward-looking statements is set out in its annual report on Form 10-K for the year ended December 31, 2005, as supplemented in its quarterly report on Form 10-Q for the quarter ended June 30, 2006, both filed with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance upon these forward-looking statements, which speak only as to the date of this release.  Except as required by law, aQuantive, undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.