Boingo Wireless Inc. is making connections.
The 11-year-old Santa Monica company, which installs Wi-Fi networks for shopping malls, restaurants and airports, recently signed a deal with Wendy’s Co. to set up Wi-Fi service at the Dublin, Ohio-based fast-food chain’s restaurants. Also this month, Boingo bought an online advertising company and added to the scope of its contract for promotion by a division of Mountain View Internet giant Google Inc.
Analysts said they expect Boingo, with revenue streams from subscribers, advertising and network installation, will be making even more deals in the future.
“I wouldn’t be surprised if we saw one or two of those kinds of major partnerships a month for the rest of the year,” said Jon Hickman, an analyst with Ladenburg Thalmann Financial Services Inc. in New York.
But the company reported disappointing earnings earlier this month. Boingo posted second quarter net income of $1.6 million, down 11 percent from the same period a year ago. Revenue rose 6 percent to $24.3 million. That was $1 million less than projected.
Stock of the company, which went public last year, fell over the last six weeks from $10.98 to close at $6.79 on Aug. 22.
The disappointing earnings, however, are offset by the company’s future prospects as consumer demand increases for smartphone Wi-Fi access, according to analysts.
Boingo was founded by Sky Dayton in 2001 and has 149 employees. Until now, most of its subscribers have been using the service for Internet access while traveling with their laptops. But future demand, company executives believe, will come from people who want to use Wi-Fi instead of their data plan that comes with their smartphones.
The Wendy’s deal places Boingo and its ad customers in 6,500 restaurants. The chain will provide the service for free.
The fast-food company is the largest addition to Boingo’s client roster, which includes the Krispy Kreme Doughnuts Inc. and malls owned by Westfield Group. The company’s airport clients include John F. Kennedy Airport in New York, Los Angeles International Airport and San Francisco International Airport.
But in a conference call on the earnings, the company acknowledged that installation of Wi-Fi spots has been going slower than expected and ad revenue has been underwhelming.
In the call, Chief Executive David Hagan mentioned that deals have been signed at the international airports in Beijing and Berlin. He also noted a partnership with SK Telecom Co. Ltd., a Seoul, South Korea, wireless provider, that gives Boingo customers access to 75,000 hot spots in that country.
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