The company forecast this quarter’s revenue ahead of consensus and raised the lower end of its year outlook.
Revenue in the three months ended in June rose 21%, year over year, to $112 million, yielding EPS of 12 cents.
Analysts on average had been modeling $109.4 million and a 2-cent loss per share.
For the current quarter, the company forecast revenue in a range of $115 million to $117 million, which is above the average $115 million estimate of analysts.
For the full year, the company raised its outlook to a range of $445 million to $454 million, better than the $439 million to $454 million the company had projected back on May 1st. Analysts have been modeling $446 million for the year.
ReachLocal management will host a conference call with analysts at 5 pm, Eastern time, and you can catch the webcast of it here.
Update: Following the call, CEO Zorik Gordon said he was happy with results across the board, and that the company was seeing improved returns from deploying its sales team internationally. He said the company saw an 87% greater return on investment for its local ad sales people in overseas territories than in North America, something he attributed to the higher level of competition for local ad sales in the much more mature market.
Reflecting upon Groupon (GRPN), and the local commerce efforts of Amazon.com (AMZN) and Google (GOOG), Gordon noted that they were all very different from ReachLocal’s advertising business. “Those particular merchants really focus on a type of deal that we don’t go after,” said Gordon. ReachLocal tends to target doctors, lawyers, plumbers — things you need immediately, as opposed to discounts on spas, restaurant meals, and concert tickets.
“What’s interesting about those models is the merchant only pays when they get a sale, so, it’s a great model,” Gordon remarked of the Groupon consignment approach that it will at some point be something needs-based vendors such as doctors want to approach, “but it will obviously be a lot different from what Groupon is doing now.”
As far as the broader economic outlook, Gordon said “Everybody’s being cautious about their guidance because we’ve been living with this for three or four years: the year starts off great, and then it just gets worse and worse as it goes along.”
The company saw a little increase in “volatility,” meaning the increase in economic pressure, during the quarter.