August 8, 2008, 12:00 AM

Keynote Systems’ Q3 revenue grows 18%, as mobile business grows 81%

Fiscal Q3 revenue at Keynote Systems, which monitors web site and mobile performance, increased 18% over Q3 a year ago to $20.5 million from $17.4 million, the company reports. Net loss was $407,000 vs. a net loss of $1.3 million a year ago.

Katie Evans

Managing Editor, International Research

Revenue at Keynote Systems Inc., which monitors web site and mobile performance, increased 18% year-over-year to $20.5 million from $17.4 million for the fiscal third quarter ended June 30, the company reports. Net loss was $407,000 vs. a net loss of $1.3 million a year ago.

This year’s loss included $1.1 million in stock-based compensation expenses, an $849,000 charge for amortization of intangible assets, and a $140,000 charge for estimated income tax expense required under generally accepted accounting principles, or GAAP. Non-GAAP net income was $1.3 million, the same as a year ago.

Keynote’s worldwide customer base reached approximately 2,800 in Q3. Keynote reports that it measures approximately 13,900 Internet pages, compared to 11,100 Internet pages in the same quarter a year ago.

“During the quarter, we reported revenue of $20.5 million, achieving the highest quarterly level in the company’s 13-year history,” says Umang Gupta, chairman and CEO. “Our mobile business grew 81%, compared to third quarter 2007, and reached a record of $8.3 million in revenue.”

For the nine months ended June 30, Keynote posted revenue of $55.9 million, up 11.9% from $49.9 million during the same period last year, as net loss nearly doubled to $2.5 million from $1.2 million. The wider loss was partly due to a 27% increase in sales and marketing expense to $19 million from $15 million.

“Our Internet revenue in combination with strong mobile revenue growth is expected to result in approximately 12% total revenue growth in fiscal 2008 revenues when compared to 2007,” Gupta says.

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