Skype posts a profit in 2010, IPO now on the way?
Skype has said they are waiting on the IPO so that they can focus on making their business more profitable and monetize some of their massive membership ranks. Lucky for them, their strategies are working as they continue to see subscriber and revenue growth.
In a recent SEC filing, Skype reported 663 million registered users. The number represented an increase over the 474 million it had in 2010. While its membership is impressive, the paid subscribers are probably of most interest to potential IPO participants. In that area, the company claimed that in 2010 it added about 8.8 million a month compared to the 7.3 million a month it added in 2009. The company billed 12.8 billion minutes in 2010 which is two billion more than the 10.7 billion it billed in 2009. Of course, free calls were close to doubled jumping from 113 billion Skype-to-Skype minutes in 2009 to 194.3 billion in 2010. While paying customers did increase, the average revenue per customer declined a dollar from $98 to $97.
Since the IPO preparation calls for profits, it might be helpful to look beyond membership metrics and see the real bottom lines. Revenue rose from $718.9 million in 2009 to $859.8 million. Even better, Skype had an operating profit of $20.6 million in 2010, which is a welcome change from its $352.2 million loss in 2009.
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