The company reported a net loss of $274,870, or two cents per share, for the first quarter ending March 31, compared to a net loss of $656,000, or nine cents per share, for the first quarter of 1996.
Wall Street analysts were expecting a profit of three cents per share, according to First Call.
Revenue for the first quarter was $8.4 million, up from $3.2 million recorded for the corresponding quarter a year earlier.
The increase in revenues during the quarter is attributable to growth in active customers, combined with higher usage hours per customer and higher revenue per usage hour.
In Australia and New Zealand, the company's active customer base increased 10 percent to approximately 119,500 customers in the first quarter of 1997, from approximately 108,600 in the fourth quarter of 1996.
During the quarter, the company launched its OzEmail Phone, a service allowing telephone calls to be made from existing tone-dial phones over the Internet, and expanded its OzEmail Fax network.
In March, OzEmail's partnership with British Sky Broadcasting was terminated, and Softbank Interactive Marketing purchased OzEmail's Web advertising business, Web Wide Media. Softbank Interactive will integrate Web Wide Media's worldwide operations in exchange for giving OzEmail a substantial minority stake in Softbank Interactive.