AOL Inc reported quarterly revenue above analysts' expectations, boosted by demand for its real-time bidding platform that helps advertisers place video and display ads on other digital properties.
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Shares of the company, whose businesses include the Huffington Post news website and the TechCrunch blog, were up 4 percent in premarket trading on Friday.
Advertising has become a major revenue stream for AOL as the company moves away from dial-up subscription service, helped by acquisition of automated advertising platforms such as Adap.tv.
Revenue in AOL's ad platform business rose 21 percent to $279.8 million, accounting for 45 percent of total revenue.
Ad sales across AOL's brands grew 8 percent as a surge in search ads more than offset continued weakness in display ads.
Total revenue rose 7.2 percent to $625.1 million, topping the average analyst estimate of $594.6 million.
Subscription revenue fell 6 percent to $141.6 million as the number of domestic subscribers fell 11 percent.
Net income attributable to AOL fell to $7 million, or 9 cents per share, in the first quarter ended March 31 from $9.3 million, or 11 cents per share, a year earlier.
Excluding items, the company earned 34 cents per share.
Analysts on average had expected a profit of 32 cents per share, according to Thomson Reuters I/B/E/S. (Reporting by Abhirup Roy and Subrat Patnaik in Bengaluru; Editing by Joyjeet Das and Saumyadeb Chakrabarty)