Gross Margin improved from 27.4% in Q2/13 to 30.9 in Q3/13 - a big prorgress in only three months
Comparing our COGS and operating expenses to the prior quarter, Q3 cost of revenue as a percent of revenues decreased from last quarter resulting in improved gross margin percentage from 27.4% to 30.9%. This improvement was in part due to the shift in revenue to the higher margin Network business.
Revenues in 2013
Q1/2013: 21.8 million (reported)
Q2/2013: 22.7 million (reported)
Q3/2013: 23.5 million (reported)
Q4/2013: 27.0 million (result of the last guidance of 95 million, if you subtract from this 95 million the revenues of Q1 - Q3).
CEO in the last Conference Call to the margins in O&O business
"O&O has faced monetization headwinds for about two years now due to the decline in RPC as the large ad supplier. So you are seeing that trend in year-over-year comparisons. Third quarter is seasonally weak, but we expect a seasonally strong fourth quarter. As we look to 2014, we believe that the addition of real-time shopping content opens up an entirely new dimension to our O&O business.
For example, we are bidding on millions of active key words today, but less than 3% of those keywords are for products. We think there is an enormous opportunity to expand our SEM activities, once we integrate our shopping data into our O&O sites which will begin early in the New Year.
This additional traffic to our site has the potential to really expand our reach in a material way, which would lead to greater revenues for our O&O division and would also serve to reduce our reliance on third-party ad suppliers.´"
Source: Read the complete transcript of the last conference call direct by Seeking Alpha.
CFO Ken on the last Conference Call: "We expect the gross margin percentage in Q4 to be slightly lower as Q4 is seasonally strong for the lower margin O&O business, and as the Q3 margin also included a onetime benefit..."