Napster Losses Continue, Despite Slight Revenue Growth

May 18th, 2007 | By | Category: Digital Music

Napster big kitty in small pondNapster today reported financial results for its fourth quarter and fiscal year ended March 31, 2007. Losses continue at the company, despite increased revenues.

Net revenue for the fourth quarter of fiscal 2007 grew to $29.1 million, up from $28.4 million in the third quarter of fiscal 2007. Net loss for the fourth quarter of fiscal 2007 was $8.5 million, or $1.3 million less than the same quarter of fiscal 2006.

Net revenue for the fiscal year ended March 31, 2007 was $111.1 million, up 17% from $94.7 million in fiscal 2006. Net loss for fiscal 2007 was $36.8 million, compared to net loss of $54.9 million in fiscal 2006.

At the end of March 31, 2007, Napster’s total worldwide paid subscriber base was 830,000, including university subscribers, Napster Mobile subscribers, Napster Japan subscribers and the AOL Music Now subscribers who transitioned in March 2007. The number of paid subscribers grew 47 percent from the third quarter of 2007 and 37 percent year over year.

Napster ended fiscal 2007 with a total of $66.5 million of cash, cash equivalents and short-term investments.

“We believe that Napster is very well positioned strategically in the market, and with the successful integration of the former AOL music subscribers into Napster we expect revenue will increase to approximately $31 million in the June quarter. Our fourth quarter cash burn from operations decreased to approximately $3.3 million, excluding our one-time payment to AOL, and we expect that quarterly cash burn will further decline in fiscal 2008, reflecting our focus on lowering expenses while maintaining our revenue growth trajectory,” said Nand Gangwani, Napster’s chief financial officer.

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