Shares of ReachLocal (RLOC) shot up 32% to $23.66 in Wednesday trading, after the LA-based company posted better-than-expected quarterly results.
For the unfamiliar, ReachLocal had one of the hottest IPOs of 2010, selling 4.17 million shares for $13 each, raising about $54.2 million.
(Editor's note: There's still time to get tickets to hear Zorik Gordon, founder and CEO of ReachLocal, deliver his keynote at Vator Splash LA on Thursday, May 26. Go to the registration page to reserve your tickets and see the agenda!)
Revenue in the last quarter grew 32 percent to $84.1 million, from $63.6 million in Q1 2010. Direct local revenue expanded a similar 37 percent to $64.5 million, from $47.2 million in the same period last year.
ReachLocal’s earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $1.2 million, a 624 percent surge from Q1 2010, when earnings came in at a $228,000 loss.
As for key metrics, the number of active advertisers using ReachLocal’s platform has increased 11 percent to 17,400 and the number of active campaigns have increased by 23 percent to 24,300, meaning the average number of campaigns per advertiser has gone up slightly.
In addition to the promising figures above, ReachLocal unveiled a new partnership with Google that will help the company accelerate its global expansion. The company says international markets make up 20 percent of its business, so the partnership with Google is vital in maintaining and growing ReachLocal’s work abroad.
On top of all this good news for ReachLocal, the company was also featured in a major update from Facebook yesterday, which brings the social network’s Groupon-like deals service to all users in five tester cities. Facebook Deals, by virtue of its unfathomably vast knowledge base of user interests and behavior, could prove to be bigger and more influential than Groupon and any of its clones. Since ReachLocal has been working at local Web advertising for several years, it made sense for the business to be included as one of the launch companies.
“We are firm believers that deals commerce is the next disruptive form of advertising,” said Rich Razgaitis, general manager of ReachDeals. “By virtue of Facebook participating in the space, it lends more credence to how disruptive deals commerce has become.”
ReachLocal’s investors appear to think so as well. The company’s stock is currently up 5.12 points (28.5 percent) to 23.11 and its market cap is listed at $641.2 million.
Looking forward to the second quarter, ReachLocal estimates it will continue to grow revenues, though at a lessened pace, to as much as $94.5 million. EBITDA is estimated to float in the $1 million to $2 million range. For the full fiscal year 2011, the company forecasts revenues as high as $400 million and EBITDA between $9 and $11 million.