San Diego, California - (The Hosting News) - November 3, 2005 - Website analytics company, WebSideStory, Inc., has announced results of operations for the quarter ended September 30, 2005 - which have exceeded both revenue and earnings guidance.

Some financial and operating highlights for the most recent quarter include:
* Addition of 110 new customers contracted to use one or more applications in the WebSideStory Active Marketing Suite;
* Revenue of $11,337,000, an increase of approximately 98% over the $5,735,000 reported in the same period in 2004;
* 58% revenue growth for the combined WebSideStory and Atomz (Avivo Corporation) in Q3 of 2005, as compared to the pro forma combined revenue of the two separate companies for Q3 of 2004;
* Quarterly earnings per share of $0.09 and non-GAAP earnings per share of $0.13 (before stock-based compensation and amortization of intangibles), compared to earnings of $0.00 and $0.08 over the same period in 2004, respectively. Earnings per share in the third quarter of 2005 included stock-based compensation expenses of approximately $219,000, or $0.01 per share and amortization of intangibles of approximately $582,000, or $0.03 per share. All per share numbers are expressed on a weighted average diluted share basis;
* Signing 25% of new bookings for the Search and Publish applications with current HBX customers, demonstrating cross-sales from the Atomz acquisition;
* Signing five new Stream partners, bringing the list of WebSideStory product integration partners to 26;
* Launching the HBX Reporting API (application program interface), with the first third party using HBX as an infrastructure component delivering analytics data through its user interface going live in the quarter; and
* Signing 12 customers to join the beta program for the Bid module of the WebSideStory Active Marketing Suite, which is expected to become generally available in December.

Jeff Lunsford, chairman and CEO of WebSideStory commented on the positive results, ''We are pleased to announce another strong quarter with record financial results, exceeding Q3 revenue and earnings guidance and entering this quarter on a trajectory that allows us to raise Q4 earnings guidance.

In the quarter, we saw good traction for the WebSideStory Active Marketing Suite and began to significantly expand our R and D capacity to position us for a competitive future. We were especially pleased to see that 25% of new bookings for Search and Publish came from existing HBX customers, validating our strategy of delivering an integrated suite of digital marketing tools focused on improving site performance and improving the efficiency and effectiveness of digital marketing professionals.

Also in the quarter, we determined the need to restate how we were accounting for a five-year-old sublease. The net effect of this recalculation is that the company was approximately $177,000 more profitable than previously reported in 2004, and will be approximately $82,500 more profitable than previously reported in year-to-date 2005.

Looking forward, expenses we had previously forecasted in the remainder of 2005 and into 2006 will no longer be incurred as they will have been fully accrued in the restated balance sheet. Sublease-related charges of $590,000 and $410,000 will be added to our financials in the years 2001 and 2003, respectively. Please note that the prior accounting treatment of this lease was fully described in our S-1 filed for the IPO and that this restatement does not result in any change in cash flow for the business during the years in question.''

The Company has also made certain adjustments to its accounting for rental expense to correct for an error in its accounting treatment of a sub-lease under the Company's lease for its headquarters building in San Diego, California. Historically, the Company has recorded rental expense on the entire leased facility on a straight-line basis over the entire term of the lease, resulting in a consistent rental expense each period. The sub-lease in question was entered into in 2001, amended in 2003, and expires at the end of 2006. From the time that the Company first entered into the sublease in 2001, it has recorded its rental expense net of sub-lease income for each period over the term of the sub-lease. Both the rental expense under the lease and the sub-lease income were fully disclosed in the Company's prior financial statements. However, under FASB Technical Bulletin 79-15, "Accounting for Loss on Sublease Not Involving the Disposal of a Segment" and Statement of Financial Accounting Statements 146, "Accounting for Costs Associated with Exit of Disposal Activities," the Company should have recorded a one-time expense and a liability related to the projected shortfall between the Company's rent obligation under the lease and the rental income to be received over the term of the sub-lease.

An archived version of the company's most recent conference call with investors and analysts is available at: www.websidestory.com.