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Linktone (ticker: LTON) reported Q2 2005 earnings results today. Key stats from the quarter:


Q2 Results:
(all percentage changes and comparisons are year on year, unless stated otherwise)

  • Gross revenue rose 44.0% to $17.5 million, and rose 16.0% sequentially.
  • Net revenue rose 43.4% to $16.6 million vs consensus estimate of $15.05 million.
  • Gross margin was 66.1% vs 68.1%.
  • Operating expenses rose 69.8% to $7.8 million.
  • Product development expenses rose 128.4% to $1.5 million.
  • Sales and marketing expenses rose 58.3% to $3.4 million.
  • Stock-based compensation expenses were flat at $534,147.
  • Other G&A expenses rose 88.8% to $2.4 million.
  • Operating income fell 3.5% to $3.2 million.
  • Operating margin was 19.1% vs 28.4%, and 21% in Q1.
  • Net income rose 5.9% to $3.7 million, and rose 16.0% sequentially.
  • Net margin was 22.4% vs 30.4%, and 22.0% in Q1.
  • Earnings per ADS of $0.14 vs $0.13.
  • Adjusted earnings per ADS of $0.15 vs $0.15, above consensus of $0.13.

Revenue Breakdown

  • 2.5G and audio-related service revenue rose 30.2% sequentially to $6.9 million.
  • 2.5G revenue was 40% of gross revenue vs 35% in Q1.
  • MMS, WAP and Java game revenue was 13% of gross revenue vs 14% in Q1.
  • Audio-related service, IVR, and RBT revenue was 27% of gross revenue vs 21% in Q1.
  • SMS revenue rose 6.1% sequentially to $10.4 million representing 59% of gross revenue vs 65% in Q1.

Q3 Guidance

  • Diluted earnings per ADS of $0.14.
  • Adjusted earnings per ADS of $0.15 in-line with consensus.

Balance Sheet as of June 30, 2005

  • Cash and equivalents of $69.5 million.
  • Short-term investments of $7.4 million.

LTON chart.

Lton819

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Source: Linktone beats by $0.02 on adjusted basis; guides in-line; expenses rise (LTON 2Q05 earnings results)