Ninetowns (NINE) says its total net revenue for the first quarter of 2005 increased to US$7.7 million, as compared to US$4.9 million for the first quarter of 2004, representing a 59.1% increase.

Gross margin for the first quarter of 2005 was 92.6%, as compared to 98.8% for the first quarter of 2004. Operating margin for the first quarter of 2005 was 70.1%, compared to 74.5% for the first quarter of 2004. Net income for the first quarter of 2005 increased to US$5.9 million, compared to US$3.3 million for the first quarter of 2004, representing an 80.2% increase.

Diluted EPS for the first quarter of 2005 was US$0.16, as compared to diluted EPS for the first quarter of 2004 of US$0.12.

Total net revenue for the first quarter of 2005 was US$7.7 million, representing a 59.1% increase, compared to US$4.9 million for the first quarter of 2004. While the first quarter is typically a slower quarter due to the week-long Chinese New Year holiday, total net revenue for the first quarter was within the prior guidance of US$7.1 million to US$7.9 million.

Net revenue from sales of enterprise software for the first quarter of 2005 was US$6.4 million, representing 83.1% of total net revenue, as compared to 96.4% and 87.0% for the first and fourth quarter of 2004, respectively. Net revenue from software development services for the first quarter of 2005 was US$1.3 million, representing 16.9% of total net revenue, as compared to 3.5% and 12.9% for the first and fourth quarter of 2004, respectively.

Net income for the first quarter of 2005 increased to US$5.9 million, representing an 80.2% increase compared to net income of US$3.3 million for the first quarter of 2004. Net income for the fourth quarter of 2004 was US$5.2 million.

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