Digital media services and advertising delivery provider DG FastChannel today issued guidance for the third quarter and full year.
The company expects its Q3 revenue to be in the range of $51-53m and EBITDA of $23-24m. For the full year the Company is comfortable with revenues of approximately $230 to $234m and EBITDA of approximately $105 to $107m.
The stock market did not like the news. Analysts had been expecting Q3 revenues to be about 20% higher at $61m, and full year numbers about 7% higher at $246m. Analysts had also been anticipating higher EBITDA numbers.
The stock is down more than 30% this morning, after falling almost 10% late last week.
Commenting on the results, company Chairman and CEO Scott Ginsburg said “While DG FastChannel’s pricing has remained stable and the HD business is strong, we are seeing normal seasonality in our SD volumes following a particularly strong Q2. This seasonality is being exaggerated by the strong rebound in spending from the second to third quarter in 2009, which masked the normal seasonality. In addition, the shift in our customer mix as we transition the Company’s Pathfire long-form platform from a wholesale to a full service business model has put short term pressure on revenues, but we expect that our new customer acquisitions will start to contribute in the fourth quarter. We remain confident that for the full year 2010, the Company expects to report approximately 22% year-over-year revenue growth and approximately 36% EBITDA growth.”
The company also announced a $30m stock repurchase program. According to Ginsburg “this share repurchase program is a good use of our cash, reflecting our strong belief in the value and opportunity for DG FastChannel.”
You can read the full DG FastChannel press release here.
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