Boston, MA 05/15/2014 (wallstreetpr) – Will Boingo Wireless Inc (NASDAQ:WIFI) posted its first quarter 2014 results with higher net loss of $5.4 million compared to $1.1 million same period in 2013. The Company reported weak operating margin despite a top-line growth.
High operating costs compress the margin
Revenue increased by 14.3% to $26.5 million versus $23.1 million in 1Q2013 due to increase in retail subscription (+3%) and advertising revenue (+386%). It offset the decline in revenue from wholesale and single use retail subscriptions.
Wholesale revenue decreased by 3.7% due to lower partner usage fees, which was partly offset by increase revenue from new DAS projects. But, retail subscriptions increased with growing average monthly subscribers. Monthly churn rate remained high with 12.3% with the growing demand for value added services and new features.
High operating costs related to network access, network operations and selling costs compressed the Company’s operating margin. During 1Q2014, adjusted EBITDA decreased to $3.1 million, from $3.6 in 1Q2013.
Positive operating cash flow
Will Boingo Wireless Inc (NASDAQ:WIFI) financed its near-term business from the cash provided from its operating activities. Despite net loss in 1Q2014, the Company generated $8.1 million of cash from its operation, but, higher capital expenditure of $11.8 million further compressed the net cash balance. As a result, Boingo has a cash and cash equivalents of $13.5 million and $37.3 million of marketable securities as of March 31, 2014.
The emergence of mobile data, DAS networks and military broadband will continue to remain key drivers for its business. The recent contracts for DAS and Wi-Fi networks with Air Force, Miller Sports, Orange County and the University of Houston will further help to build long term growth.
Therefore, Will Boingo Wireless Inc (NASDAQ:WIFI) expects revenue growth at a range of $116 to $121 million with adjusted EBITDA of $24-$27 million in FY2014. The increasing costs continue to squeeze the Company’s bottom line with a net loss of $14-$11.0 million.
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