Minneapolis, Minnesota - (The Hosting News) - October 27, 2005 - eCommerce outsourcing company, Digital River, Inc., has reported revenue of $53.2 million for the quarter ended September 30, 2005. This is a 35 percent increase from revenue of $39.4 million in the third quarter of 2004.

The performance exceeded the company's third quarter revenue guidance of $52.5 million, provided on July 27, 2005.

In the third quarter, net income was $12.4 million, or $0.31 per share on a diluted basis, including $4.7 million of income tax expense. These results represent an increase of 52 percent compared to net income of $8.1 million, or $0.22 per diluted share with no income tax expense in the third quarter of 2004. This performance exceeded the GAAP diluted net income per share guidance of $0.27, provided by the Company on July 27, 2005.

The Company's net effective tax rate for the quarter ended September 30, 2005, was approximately 28 percent, reflecting adjustments made in connection with the Company's 2004 U.S. federal income tax return. Absent these adjustments, the Company's total income taxes for the quarter would have been $5.8 million, net income would have been $11.3 million, and GAAP diluted net income per share would have been $0.28.

Net income for the third quarter of 2005, prior to the amortization of acquisition-related expenses and $4.5 million of non-cash income taxes, was $18.9 million, or $0.50 per share, excluding the impact of the Company's contingent convertible notes. These results represent a 79 percent increase compared to net income, on a similar basis, of $10.6 million, or $0.29 per diluted share, in the third quarter of 2004. This performance exceeded the pro forma diluted net income per share guidance of $0.48, provided by the Company on July 27, 2005.

Joel Ronning, CEO of Digital River, commented on the earnings, ''In the third quarter, we again exceeded our revenue and earnings expectations. Our business continues to scale and our strategic growth initiatives are paying off. Revenue generated through international markets, strategic marketing services and our oneNetwork online sales channel contributed to our solid third quarter performance.''

For further details about Digital River, visit the corporate site at: www.digitalriver.com.