We are pleased to have beaten our projections for the quarter despite the current economic environment and we have taken actions to aggressively reduce expenses to ensure that we meet our goal of attaining positive quarterly cash earnings this year. We remain an agile business that has proven its ability to quickly and successfully react to evolving market and customer needs. I look forward to executing our vision to become the leading creator of private marketplaces that connect large buyers to networks of enabled suppliers, stated VerticalNet’s President and CEO Mike Hagan.
Revenues for the quarter ended March 31, 2001 were $36.7 million, an increase of 185 percent over the $12.9 million reported for the same period of the prior year. VerticalNet’s cash loss was $28.2 million, or $(0.30) per share, compared to $13.6 million, or $(0.18) per share reported for the quarter ended March 31, 2000. Cash loss excludes non-cash expenses and other nonrecurring items. At March 31, 2001, after giving effect to the Microsoft transaction described below, pro forma cash and marketable securities was $107.3 million and pro forma deferred revenues were $88.9 million. Deferred revenues were $57.3 million at December 31, 2000.
Historical comparative financial information included in this release and the attached financial information excludes the results of VerticalNet’s Exchanges division (NECX), which was sold to Converge on January 31, 2001.
Markets and Solutions
Revenues from VerticalNet’s Markets division were $27.8 million for the quarter ended March 31, 2001. In conjunction with the Microsoft alliance then in effect, VerticalNet launched 5,029 new storefronts during the first quarter and, as of March 31, 2001, the total number of live storefronts had grown to 23,519, compared to 3,302 at March 31, 2000. Storefront customers grew to 21,943 at quarter-end from 2,273 at March 31, 2000.
First quarter revenues from VerticalNet’s Solutions division were $8.9 million. In addition, at March 31, 2001, the division had $14.9 million in deferred revenues and $91.3 million in backlog. Although the softening economy has negatively impacted IT spending across the board, which has resulted in a sequential decrease in our backlog, we remain enthusiastic about our long-term revenue visibility. As a result of our focused efforts to increase the bench strength of our sales force, as illustrated by our recent addition of Chris Larsen to our senior management team in the role of EVP of Global Field Operations, and efforts to grow our product offerings, we are already seeing a significant increase in our pipeline. Furthermore, we are optimistic about the potential relationships that may grow through our Converge relationship, noted Hagan.
As previously announced, VerticalNet’s largest win to date is Converge, the world’s leading high technology consortium, which has contracted with VerticalNet to use our technology as part of the technical foundation for its exchange platform under a $108 million, 3-year agreement. Approximately $5.9 million in revenue was recognized from this relationship during the quarter ended March 31, 2001.
