Media Metrix narrows 2Q losses

Media Metrix Inc. (Nasdaq: MMXI) easily hurdled analyst estimates in the second quarter.

In results released after market close Monday, the Web traffic measurement company posted a net loss of $1.95 million, or 12 cents a share, not including interest income and amortization. First Call's survey of three analysts predicted a loss of 17 cents a share, for the quarter ended June 30.

Second quarter revenue rose to $4.3 million, up 34 percent sequentially and up 130 percent from pro forma revenue in the same period a year ago. Media Metrix credited the acquisition of Digital Knowledge and overall demand growth for boosting revenue.

Clients increased to 420 from 352 in the first quarter. Media Metrix reported a 95 percent retention rate, with average contract value rising 35 percent on renewals.

"The strong revenue performance for the second quarter was heavily driven by new customers, as well as strong upgrades from existing customers," said Tod Johnson, chairman and chief executive officer. "Market conditions look good; there is great potential for new business and for client renewals and upgrades."

Research and development expenses took up 23 percent of revenues in the second quarter, up from 21 percent in the first quarter. Sales and marketing expenses took up 43 percent of revenues in the second quarter, while general and administration costs were 30 percent of revenues.

Gross margin for Media Metrix increased to 50 percent from 46 percent in the previous quarter, but don't expect that to continue. Media Metrix plans to increase to expand internationally, including Germany, France and Great Britain.

Shares of Media Metrix gained 1 1/8 to 39 1/2 in regular trading prior to the quarterly report. All three analysts surveyed by Zack's Investment Research maintain the equivalent of a "moderate buy" rating on Media Metrix.>