Audible Announces 4th Quarter 2006 & Full Year Financial Results.

Company Reports 2006 Revenue of $82.2 Million, up 30% Year over Year

Results Include Positive Adjusted EBITDA for 4(th) Quarter 2006

NEWARK, N.J. -- Audible, Inc. (NASDAQ: ADBL; www.audible.com), the leader in spoken audio entertainment, information, and educational programming on the Internet, today announced unaudited financial results for the 4th quarter and full year ended December 31, 2006.

Audible reported consolidated 4th quarter net revenues of $23.3 million, up 27.6% over the prior year period and 16.3% over the prior quarter. Adjusted EBITDA (as defined below) of $0.8 million improved by $3.6 million over the 4th quarter of 2005 and $1.1 million over the prior quarter. Net loss for the 4th quarter 2006 was $0.7 million, or ($0.03) per share, which compares to a net loss of $2.2 million, or ($0.09) per share, in the 4th quarter of 2005 and a net loss of $2.5 million, or ($0.10) per share, in the 3rd quarter of 2006.

For the full year 2006, Audible reported net revenue of $82.2 million, up 30% year over year. Net loss for 2006 was $8.4 million or ($0.35) per share. This compares to a net loss of $0.6 million or ($0.03) per share, in 2005. The net loss in 2006 includes $5.9 million of stock-based compensation expense, an increase of $5.0 million compared to similar charges in 2005.

"The 4th quarter of 2006 delivered across-the-board improved financial results for Audible," stated Donald Katz, CEO and Chairman, Audible, Inc. "We saw a strong seasonal sales lift during the quarter, as well as positive results from focused promotional merchandising efforts."

"As we move with confidence into 2007," Mr. Katz continued, "we are committed to continuously improving our audio service as we also increase consumer awareness of our powerful listening products. We expect the results of our efforts will be stronger profitability in 2007 and beyond."

4(th) Quarter 2006 Key Financial and Operating Metrics 

Consolidated Net Revenue: Consolidated net revenue totaled $23.3 million in 4th quarter 2006, a 27.6% increase over the $18.3 million reported in the 4th quarter 2005.

Adjusted EBITDA: Adjusted EBITDA was $0.8 million based upon a net loss of $0.7 million excluding stock-based compensation of $1.8 million, depreciation and amortization of $1.3 million, income tax benefit (net) of $0.8 million and interest income (net) of $0.8 million. Adjusted EBITDA improved by $3.6 million over the 4th quarter 2005, and $1.1 million over the 3rd quarter of 2006.

Deferred revenue: Deferred revenue was $14.4 million at December 31, 2006, a $2.3 million or 19.2% increase over an adjusted $12.0 million at September 30, 2006 and a $7.2 million or 109% increase over the $6.6 million balance at December 31, 2005. (The changes in deferred revenue exclude a $0.7 million prior period adjustment made as of January 1, 2006 in accordance with SAB 108.)

Total New AudibleListener Members: 70,400 new AudibleListener members were acquired during the 4th quarter 2006, a 13.3% increase year over year.

Full Year Key Financial and Operating Metrics

Consolidated Net Revenue: Consolidated net revenue was $82.2 million, up 30% year over year from the $63.2 million reported in 2005.

Adjusted EBITDA: Adjusted EBITDA was negative $1.1 million based upon a net loss of $8.4 million, excluding stock-based compensation of $5.9 million, depreciation and amortization of $5.0 million, asset impairment of $0.1 million, income tax benefit (net) of $0.8 million and interest income (net) of $3.0 million.

Cash, Cash Equivalents, and Short-Term Investments: Audible's cash, cash equivalents and short term investments totaled $66.2 million at the end of December 31, 2006 versus $67.2 million at December 31, 2005.

Total New AudibleListener Members: AudibleListener members acquired in 2006 were 285,300, up 25% versus the prior year. There were approximately 383,000 AudibleListener members on December 31, 2006, including approximately 142,000 basic AudibleListener members.

Ongoing Audit of Financial Results and Internal Controls

The company is undergoing an audit of its financial results for the year 2006, and an audit of its internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. These audit procedures are not yet complete as of the date of this press release. There can be no assurance that our financial results as disclosed in this press release will not change following the completion of the audits or that our internal controls will be found to be effective.

Conference Call

Senior management will host an investor teleconference at 5:00 p.m. EDT today, to discuss 4th quarter results as well as related financial and operational developments. A live webcast of the conference call is available at www.audible.com/ir for audio streaming access to the call. To participate in the call, the dial-in number is 800-238-9007 or [phone]. Passcode 5495299.

Use of Non-GAAP Measures

In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the company presents financial measures that are non-GAAP measures, specifically adjusted EBITDA. Adjusted EBITDA is net (loss) income excluding interest, taxes, depreciation, amortization, impairment and stock based compensation. The company believes that this non-GAAP measure, viewed in addition to and not in lieu of the company's reported GAAP results, provides useful information to investors regarding its performance and overall results of operations. These metrics are an integral part of the company's internal reporting to measure the performance of the company and the overall effectiveness of senior management. Reconciliations to comparable GAAP measures are available in the accompanying schedules and on the company's Web site with this press release. The GAAP financial measures presented are consistent with the company's historical financial reporting practices. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies, and are not identical to corresponding measures used in our various agreements or public filings. Management also presents total cash sales. The measure total cash sales is defined as change in deferred revenue plus consolidated net sales. Management believes that total cash sales is a useful measure when understanding the increase in deferred revenue.

About Audible, Inc.:

Audible (www.audible.com) is the leader in spoken audio information and entertainment on the Internet. Content from Audible is downloaded and played back on personal computers, CDs, or AudibleReady[R] computer-based and wireless mobile devices. Audible has 127,000 hours of audio programs from more than 390 content partners that include leading audiobook publishers, broadcasters, entertainers, magazine and newspaper publishers, and business information providers. Audible is the preeminent provider of spoken-word audio products for Apple's iTunes Store. Among Audible's key business relationships are Apple Inc., Amazon.com, Palm, Inc, Creative Labs, Inc., SanDisk, and XM Satellite Radio.

Audible, www.audible.com, AudibleListener, and AudibleReady are registered trademarks of Audible, Inc. and all are part of the family of Audible, Inc. trademarks

Other product or service names mentioned herein are the trademarks of their respective owners.

Forward-Looking Statements 

The statements in this press release which are not historical facts may be deemed to contain forward-looking statements about Audible. Actual results may differ materially from those anticipated in any forward-looking statements as a result of certain risks and uncertainties, including, without limitation, Audible's limited operating history, history of losses, uncertain market for its services, and its inability to license or produce compelling audio content and other risks and uncertainties detailed in Audible's Securities and Exchange Commission filings. No forward-looking statement can be guaranteed. Forward-looking statements speak only as of the date on which they are made and Audible, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

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