TheStreet.com reported Q3 results. The headline looks nice–until you note that the Promotions.com acquisition boosted revenue by about 15%. Subscription revenue declined year over year. Organic advertising revenue growth continued to decelerate. Organic EBITDA margin appears to have dropped.
- Total revenue $16.1 million up 24%. However, excluding $2.3 million of revenue from Promotions.com, organic revenue was $13.8 million, up only 7%.
- Subscription revenue declined 3% to $8.6 million. Subscription revenue has grown consistently (if slowly) in prior quarters: 2% in Q2 and 15% in Q1
- Total advertising revenue grew 85% to $6.9 million, but again this was boosted by Promotions.com. Organic growth was 24%, a sharp deceleration from 56% growth in Q1 and 48% growth in Q2.
- Non-financial advertising revenue grew 97% and now accounts for 49% of the business. Presumably the vast majority of the this came from Promotions.com. This growth also suggests that financial advertising grew even slower than the 24% organic ad growth.
- EBITDA ex stock comp was $4.5 million, up 32%. Assuming Promotions.com has, say, a 25% EBITDA margin, this suggests organic EBITDA of about $3.9 million, up only 15%. This suggests the core organic EBITDA margin is declining.
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