The prepaid card marketer NetSpend Holdings (NTSP) reported higher revenue in the first quarter, but it reported a loss due to expenses from litigation.
NetSpend's revenue rose 13%, to $91.4 million, in the first quarter from a year earlier. It had a net loss of $5.8 million, compared to net income of $7.8 million a year earlier. The loss includes pre-tax litigation related losses of $25.3 million.
NetSpend said May 1 that a jury awarded Alexsam $18 million in royalties stemming from patent infringement litigation Alexsam began in 2003. The figure does not include prejudgment interest and attorney fees, which NetSpend estimates at $6 million. NetSpend plans to request a reduction of the awarded amount. It also plans to appeal the jury's verdict and other rulings.
"We had positive results in the first quarter with all key metrics trending up as we experienced a strong tax season and completed the launch of 7-Eleven," said Dan Henry, NetSpend's chief executive, in a press release. "During the quarter, we launched online programs with BET and PayPal. We also made significant progress on executing our retail expansion plans with the signing of many new agreements."