WebSideStory, a leading provider of digital marketing and analytics solutions, today announced the results of operations for the second quarter ended June 30, 2006. Financial and operating highlights for the quarter include: * Record non-GAAP revenue of $16.8 million, an increase of 79% over the comparable period last year on an as-reported basis and 40% on an organic basis. Non-GAAP revenue includes $1.6 million in deferred revenue related to the company's merger with Visual Sciences. * GAAP revenue of $15.2 million. * Record bookings for both the WebSideStory and Visual Sciences divisions, signing more than 130 new contracts for various modules of the WebSideStory and Visual Sciences suites and growing the enterprise customer base to approximately 1,400 worldwide. * Strong year-over-year organic revenue growth from all product lines, including 37% growth in the WebSideStory Division and 93% growth in the Visual Sciences Division. * Non-GAAP earnings per share of $0.10, compared to previously issued guidance of $0.10 to $0.13 per share. Non-GAAP earnings per share excludes stock-based compensation expenses, amortization of intangibles and other non-cash items described below. GAAP loss per share of $0.13, with a reconciliation provided in the table below. * The company's 11th consecutive quarter of positive cash generation and non-GAAP profitability, including non-GAAP net income of $2.0 million, which includes deferred revenue related to the Visual Sciences merger and excludes stock-based compensation, amortization of intangibles and other non-cash items. On a GAAP basis, the company reported a net loss of $ 2.4 million for the quarter. * Cash and investments balance at quarter end of approximately $17 million. * WebSideStory Search 4.0 being recognized with the Software & Information Industry Association's prestigious CODiE Award for Best Enterprise Search Engine. WebSideStory Search 4.0 introduced a number of industry first capabilities into the market, including Active Ranking -- a patent-pending capability that enables marketers to automatically drive site search results based on the full spectrum of Web site behavioral data. "Second quarter 2006 was an exceptional sales execution and product delivery quarter. We generated record revenue, signed up a record number of new customers and achieved record new contract bookings for WebSideStory HBX Analytics, Visual Sciences and WebSideStory Search and Publish," said Jeff Lunsford, chairman and CEO of WebSideStory. "Our investments in innovative new products led to prestigious industry recognition. We experienced increased lead flow across all product suites as a result. We believe the strong momentum built in the second quarter will lead to solid revenue growth and margin expansion in the third quarter. We are especially pleased with the 93% growth generated by the Visual Sciences Division and with the innovative technology coming out of our HBX Analytics and WebSideStory Search development labs. We feel great about the health of our markets and the strength of our product and service lines. Our digital marketing solutions are part of a high-growth market sector which we believe will continue to fuel our expansion in the years ahead. We are also expanding our solution set to broaden our footprint within the enterprise and benefit from other product opportunities beyond the digital marketing stack." The company's guidance for the third quarter 2006 and full year 2006 is as follows: Financial Guidance Q3 2006 Full Year 2006 ----------------- ------------------ Revenue Guidance Low High Low High (millions) ------ ------ ------ ------ Estimated non-GAAP revenue range $17.9 $18.5 $68.0 $69.0 Deferred revenue related to Visual Sciences merger (1.4) (1.4) (5.0) (5.0) ------ ------ ------ ------ Estimated GAAP revenue range $16.5 $17.1 $63.0 $64.0 Earnings per share guidance Estimated non-GAAP EPS range $0.13 $0.14 $0.50 $0.52 Estimated amortization of intangibles (0.08) (0.08) (0.29) (0.29) Estimated stock-based compensation (0.15) (0.17) (0.55) (0.58) Deferred revenue related to Visual Sciences merger (0.07) (0.07) (0.25) (0.25) Estimated non-cash tax benefit 0.05 0.06 0.20 0.22 Estimated non-cash interest expense (0.01) (0.01) (0.05) (0.05) Effect of using non-GAAP dilutive shares (0.01) (0.01) (0.02) (0.03) ------ ------ ------ ------ Estimated GAAP EPS range $(0.14) $(0.14) $(0.46) $(0.46) Estimated shares used in per share calculations 20,200,000 20,200,000 20,065,000 20,065,000 Founded in 1996, WebSideStory, Inc. (NASDAQ:WSSI) is a leading provider of digital marketing and analytics solutions that improve online marketing, sales and business operations. Its WebSideStory division consists of web analytics, site search, web content management, and keyword bid management. WebSideStory also provides customer analytics solutions through its wholly owned subsidiary, Visual Sciences, LLC, a leading provider of streaming data analysis and visualization software. WebSideStory is headquartered in San Diego, California, and has European headquarters in Amsterdam, The Netherlands. For more information, contact WebSideStory. Voice: 858.546.0040. Fax: 858.546.0480. Address: 10182 Telesis Court, 6th Floor, San Diego, CA 92121. Web site: www.WebSideStory.com. WebSideStory is a registered trademark of WebSideStory. Visual Sciences is a registered trademark of Visual Sciences, LLC. Other trademarks belong to their respective owners.