Demand Media, Inc. (NYSE:DMD),  reported financial results for the quarter ended September 30, 2011 after the market closed today.

Shares of Demand Media which fell over 9% in trading today are back up over 17% in after market trading since the earnings were released at $8.30 a share.

Demand has a 52 week low of  $5.24 and closed today at $7.06

Here are the highlights:

Q311 Financial Summary:

GAAP

• Revenue increased 25% to $81.5 million, compared with $65.4 million in Q310.

• Loss from operations of $(3.3) million compared with income from operations of $0.9 million in Q310.

• Net loss of $(4.1) million compared with a net loss of $(0.3) million in Q310. Net loss per share of $(0.05) compared with $(0.64) in Q310.

• Cash flow from operations grew 36% to $22.1 million, from $16.3 million in Q310.

Non-GAAP¹

• Revenue ex-TAC increased 26% to $78.1 million, from $62.2 million in Q310.
• Adjusted OIBDA grew 33% to $21.7 million, or 27.7% of Revenue ex-TAC, compared with $16.3 million, or 26.2% of Revenue ex-TAC, in Q310.
• Adjusted Net Income of $5.0 million increased 12% compared with $4.5 million in Q310. Adjusted Net Income per share – diluted of $0.06, grew 20% compared with $0.05 in Q310.
• Discretionary Free Cash Flow increased 116% to $19.9 million compared with $9.2 million in Q310.
• Free Cash Flow of $6.0 million compared with $(4.0) million in Q310.

“We reported another strong quarter as we continue to build Demand Media’s foundation for long-term growth,” said Richard Rosenblatt, Chairman and CEO of Demand Media. “The Company is uniquely positioned to deliver data-driven professional content through its robust content publishing platform. We are now in the process of optimizing that platform while increasing our investment in video content and enhancing the quality, engagement and user experience of our sites.”

Q311 Financial Highlights:

• Content & Media Revenue increased 27% to $50.7 million, compared with $39.8 million in Q310.

• Traffic acquisition costs (TAC), which represent the portion of Content & Media revenue shared with Demand Media partners, of $3.4 million, or 6.7% of Content & Media revenue, compared with $3.2 million, or 7.9% of Content & Media revenue, in Q310.

• Content & Media Revenue ex-TAC grew 29% to $47.4 million, from $36.7 million in Q310.

• Registrar Revenue increased 20% to $30.7 million compared with $25.5 million in Q310.

• Investment in Intangible Assets of $13.9 million increased 5% from $13.3 million in Q310.

“With consistent traffic trends to our Owned & Operated properties in Q3, we are pleased to report that we achieved our financial objectives in a challenged economic environment and generated $6.0 million of free cash flow during the quarter,” said Demand Media’s President and CFO Charles Hilliard.

Q311 Business Highlights and Recent Developments:

Content

• In October 2011, YouTube announced an original Channels initiative launching in 2012. Demand Media will be partnering with YouTube on three of these channels: eHow Home, eHow Pets & Animals, and LIVESTRONG.

• eHow.com is a top 20 website in the US, and had 71.5 million unique users worldwide in September 2011, according to comScore.

• LIVESTRONG.COM‘s traffic and engagement continues to grow, with 9.5 million unique US users in September 2011, up 87% year-over-year, according to comScore. In September, the Company re-launched LIVESTRONG.COM to deliver distinct content for men and women and to introduce a new advisory board comprised of well-known nutritionists, fitness gurus and doctors.

• Cracked.com was the most visited humor site in the US in September 2011, and its audience spent more time on the site than the other top five comedy sites combined, according to comScore. Cracked’s Facebook fans have grown to more than 1.8 million today.

Advertising

• Demand Media has integrated IndieClick, which the Company acquired in August 2011, into its brand advertising sales capabilities. IndieClick helps advertisers reach the highly sought after 18-34 year old demographic through innovative ad formats – including rich media, video, mobile and social media – that are integrated onto carefully selected destinations.

Social

• The Company has integrated RSS Graffiti, which it acquired in August 2011 to expand its social content capabilities. During September 2011, over 800,000 brands, online publishers and individuals shared nearly 80 million pieces of content with their friends and fans using the RSS Graffiti social publishing application, up from over 600,000 brands, online publishers and individuals, and more than 60 million pieces of content in July 2011.

Share Repurchase

• On August 19, 2011, the Company announced a $25 million repurchase program authorized by its Board of Directors. Through September 30, 2011, the Company repurchased approximately 456,000 shares of common stock for approximately $3.6 million.