Revenues for its first quarter ended March 31 were up 74 percent to $44.5 million, compared with the $25.6 million reported for the first quarter of 1997.
The net loss was $29.9 million, or 67 cents per share, including a previously announced $7 million charge for in-process research and development it gained related to the acquisition of iSTAR Internet. For the same period a year ago, PSINet reported a net loss of $9.3 million or 23 cents per share.
Analysts were expecting a loss of 57 cents a share, according to First Call.
"We are pleased to have exceeded earnings expectations again this quarter and to report strong revenue growth across all business units," said company CEO William Schrader, in a prepared statement.
The commercial ISP's recently completed acquisitions of other Internet service providers is expected to add more than $30 million of annualized revenue, said the company. Those additions will also allow it to further expand its market presence in Europe and Canada.
At the end of the quarter, the company's cash position had declined to $39.4 million, compared with $54 million a year ago. Earlier this month, PSINet said it received the proceeds from a $600 million debt offering and will use the proceeds to continue building out the business.
"The proceeds of this offering will enable PSINet to implement its plan to make strategic investments in and acquisitions of companies that are complementary to our core business," company CFO Edward Postal said in a prepared statement.
During the quarter, the ISP provided service to 33,300 corporate customers, an increase of 6,900 customers, or 26 percent over the fourth quarter of 1997. The average new contract value was flat at $5,500 for the first quarter of 1998, compared with the fourth quarter of 1997, while business account retention rate increased to 80 percent, up from 76 percent in the fourth quarter.
The company's stock has climbed nearly 230 percent since the end of 1997, to yesterday's close of 14, compared with a 52-week low of 4-1/4 in late December. In today's trading, PSINet shares inched up a half a point, to close at 14.5.
PSINet in January rejected U.S. Internetworking's unsolicited $400 million bid for the Internet service provider. The following month, U.S. Internetworking halted its attempt to acquire at least 51 percent of PSINet's shares.