Meanwhile, the company’s gross margins rose to 43 percent in the first quarter of 2007, up from 36 percent in the year earlier period and 42 percent in the previous quarter. Its net revenue reached 23.5 million dollars, up 25 percent year on year but down seven percent quarter on quarter, which achieved the expected goal.

Steve Zhang, president and CEO of Asiainfo, said healthy growth in core telecom software solution business whose net revenue grew 19 percent year on year led to the guidance-beating earnings in the first quarter.

By March 31, 2007, AsiaInfo had total cash and cash equivalents including restricted cash and short term investment of 166.3 million dollars, an increase of approximately 3.2 million dollars from that of the previous year. Accounts receivable increased to 42.2 million dollars from 35.2 million dollars at the end of 2006. Operating cash flow in the first quarter of 2007 was a net outflow of approximately three million dollars thanks to strong cash collection in the previous quarter.