PhotoWorks’ Q1 revenue grows 8%, first year-over-year Q1 growth in 8 years

PhotoWorks Inc., an Internet-based digital photo-processing company, reported that digital revenue totaled $3.3 million in the first quarter, up 44% from $2.3 million in the first quarter of 2006. Traditional film processing revenue totaled $933,000, up 43.1%. Total revenue equaled $4.3 million, up 8% over $4 million a year earlier. The company says Q1 was the first time in more than eight years that a first quarter had higher revenue than the corresponding quarter a year earlier.

PhotoWorks reports that 83% of revenue came from the sale of non-print products, such as customer-created books, cards and calendars, which have a higher margin than photo printing. Average order was $42.73.

The company reported a net loss of $2.3 million compared to a net loss of $328,000 in the first quarter of fiscal year 2006. The company says the majority of the loss reported in Q1 2007 was due to a non-recurring, non-cash beneficial conversion of $1.8 million as a consequence of a bridge note converting to stock during the quarter.

PhotoWorks web-based services allow PC and Mac users to create hardbound photo books, customized greeting cards, calendars, prints and other photography-sourced products straight from their computers.