Navisite 8-K NaviSite Reports Third Quarter Fiscal Year 2010 Financial Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:

Claudine Bianchi
978-946-7726
cbianchi@navisite.com

NaviSite Reports Third Quarter Fiscal Year 2010 Financial Results

Bookings of recurring revenue of $734K, up 47% from the prior year

Divested assets and deleveraged balance sheet by 54%

Andover, MA, June 10, 2010— NaviSite, Inc. (NASDAQ: NAVI), a leading provider of cloud-enabled enterprise hosting and application management services, today reported financial results for the third quarter of fiscal year 2010, which ended April 30, 2010.

NaviSite completed three asset sale transactions during the third quarter of fiscal year 2010, providing initial gross cash proceeds of $56.9 million with up to $4.5 million to be received in the future upon release of escrow balances. The following results of operations reported exclude the results of discontinued operations for the periods presented.

• Recurring hosting revenue was $31.0 million for the third quarter, an increase of 4% compared to $29.8 million for the third quarter of fiscal year 2009. The third quarter of fiscal year 2009 included $0.8 million of hosting revenue from NaviSite’s former Los Angeles data center, which lease NaviSite did not renew at the end of the third quarter of fiscal year 2009. Excluding the Los Angeles hosting revenue in the third quarter of fiscal year 2009, recurring hosting revenue increased 7%.

• Total revenue for the quarter ended on April 30, 2010, was $31.4 million an increase of 1.5% compared to $31.0 million in the third quarter of fiscal year 2009. Excluding the revenue from the non-renewal of the Los Angeles data center revenue increased 4% over the prior year.

• Gross margin improved to 37% for the third quarter of fiscal year 2010, representing a one-percentage-point increase from the 36% recorded in the third quarter of fiscal year 2009.

• Income from operations improved 2% for the third quarter of fiscal year 2010, increasing to $0.78 million compared to $0.77 million in the third quarter of fiscal year 2009.

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

• EBITDA, excluding impairment costs, stock-based compensation, severance, discontinued operations, related gain on discontinued operations, and other non-operational charges (“adjusted EBITDA”), for the third quarter was $6.0 million, a 6% decrease compared to $6.3M for the third quarter of fiscal year 2009. Excluding the impact from the non-renewal of our Los Angeles data center in fiscal year 2009 and the $0.56 million impact from the conversion of our UK data center lease to an operating lease at the end of the second quarter of fiscal year 2010, adjusted EBITDA increased 8% over the prior period in fiscal year 2009.

• Net loss from continuing operations in the third quarter was $0.7 million as compared to a loss of $1.8 million in the comparable period in fiscal year 2009. Net loss from discontinued operations for the third quarter was $1.8 million as compared to a loss of $0.6 million in the third quarter of fiscal year 2009. Net income available to common shareholders for the third quarter including the gain on sale of assets was $17.3m, or $0.47 per share, compared to a loss of $3.2 million, or $(0.09) per share, in the third quarter of fiscal year 2009.

• Cash generated from operating activities for the third quarter of fiscal year 2010 was $4.0 million, representing a decrease of 26% from the $5.4 million recorded in the third quarter of fiscal year 2009.

• Senior leverage ratio (Sr. Debt/trailing twelve months adjusted EBITDA) decreased from 3.3x at the end of fiscal year 2009 to 2.1x at the end of the third quarter of fiscal year 2010.

“With the sale of the two data centers and the former netASPx business, we made significant progress in our strategy to deleverage the balance sheet and focus our marketing and sales efforts to the enterprise customer,” said Arthur Becker, NaviSite’s Chief Executive Officer. “Our strong bookings, success in closing larger enterprise deals, low churn and investments in our proprietary enterprise cloud infrastructure are anticipated to translate into increased revenue and EBITDA growth in the coming quarters.”

Quarterly Operational Highlights

• Booked approximately $0.73 million of new monthly recurring hosting revenue (“MRR”) in the third quarter of fiscal year 2010, an increase of 47% from the $0.50 million booked in the third quarter of fiscal year 2009.

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

• Signed $15.7 million of hosting contract value, with an average contract term of 21 months during the third quarter of fiscal year 2010 for recurring enterprise-hosting business, an increase of 39% compared to bookings of $11.3 million in recurring hosting-contract value in the third quarter of fiscal year 2009.

• Customer churn, defined as the percentage loss of a customer or a reduction in a customer’s monthly recurring revenue from our active customer pool, was 1.0% per month during the quarter, compared to 1.0% a year ago.

Conference Call Scheduled for June 10, 2010

NaviSite, Inc. Chief Executive Officer Arthur Becker, President Brooks Borcherding and Chief Financial Officer Jim Pluntze will host a conference call on Thursday, June 10, 2010, at 5:00 p.m. Eastern Time to discuss the company’s financial results for its third quarter fiscal year 2010.

UPDATE NaviSite’s conference call can be accessed by dialing 866.730.5766 (International: +1.857.350.1590) and entering passcode 47752833. A replay of the call will be accessible following the conference call by dialing 888.286.8010 (International: +1.617.801.6888) and using passcode 22840574.

EBITDA

EBITDA is not a recognized measure for financial-statement presentation under United States generally accepted accounting principles (“GAAP”). NaviSite believes that the non-GAAP measure of EBITDA, as adjusted, provides investors with a useful supplemental measure of our actual and expected operating and financial performance by excluding the impact of interest, taxes, depreciation and amortization. We also exclude impairment costs, stock-based compensation, severance, discontinued operations, related gain on discontinued operations, and other non-recurring charges from our non-GAAP measure, as such items may be considered to be of a non-operational nature. EBITDA does not have any standardized definition and therefore may not be comparable to similar measures presented by other reporting companies. We use EBITDA, as adjusted, to assist in evaluating our actual and expected operating and financial performance. These non-GAAP results should not be evaluated in isolation from, or as a substitute for, our financial results prepared in accordance with GAAP. A table reconciling our net loss, as reported, to EBITDA, as adjusted, is included in the condensed consolidated financial statements in this release. We believe that using EBITDA, as adjusted, as a performance measure, together with net income (loss), will help investors better understand our underlying financial performance.

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

About NaviSite

NaviSite, Inc. (NASDAQ: NAVI) is a leading worldwide provider of enterprise-class, cloud-enabled hosting, managed applications and services. With over 20 years experience, the Company provides a full suite of reliable and scalable managed services, includingApplications Services, industry-leadingEnterprise Hosting, andManaged Cloud Services for enterprises looking to outsource IT infrastructures and lower their capital and operational costs. Nearly 1,400 customers depend on NaviSite for customized solutions, delivered through a global footprint of over a dozen state-of-the-art data centers supported by approximately 600 professionals. For more information on NaviSite services, please visitwww.navisite.com.

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This release contains forward-looking statements that address a variety of subjects, including NaviSite’s expected future operating and financial results, such as profitability, revenue growth and EBITDA, the success and performance of our product and service offerings and our strategic business plans for growing our customer base. All statements other than statements of historical fact — including, without limitation, those with respect to our goals, plans and strategies set forth herein — are forward-looking statements. The following important factors and uncertainties, along with general economic conditions, changes in economic conditions and others, could cause actual results to differ materially from those described in these forward-looking statements. Our success — including our ability to improve our gross profit, to improve our cash flows, to expand our operations and revenue and to reach and sustain profitability — depends in part on our ability to execute on our business strategy and the continued and increased demand for, and market acceptance of, our products and services. We may not remain compliant with our agreement with our senior secured lenders, including financial covenants. Our financial forecasts may not be achieved, including those as to expected EBITDA and revenue. We may be unable to raise the necessary funds to meet our payment obligations to our lending group under our senior secured credit facility and other creditors. We may not be able to expand our operations in accordance with our business strategy. We may experience difficulties integrating technologies, operations and personnel in accordance with our business strategy. Our products, technologies and resources may not successfully operate with the technology, resources and applications of third parties. We derive a significant portion of our revenue from a small number of customers, and the loss of any of those customers could significantly damage our financial condition and results of operations. Competition has increased, and technological changes made, in the markets in which we compete. For a detailed discussion of cautionary statements that may affect our future results of operations and financial results, please refer to our filings with the Securities and Exchange Commission, including our most recent

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

annual report on Form 10-K and our quarterly reports on Form 10-Q. Forward-looking statements represent our current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements that we make. All logos, company and product names may be trademarks or registered trademarks of their respective owners.

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

NaviSite Financial Tables

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

	For the Three Months Ended						For the Nine Months Ended
	April 30, 2010			April 30, 2009			April 30, 2010			April 30, 2009
				Unaudited
				(In thousands, except per share amounts)
Revenue	$	31,355		$	30,884		$	93,223		$	94,705
Revenue, related parties		67			88			235			282
Total revenue		31,422			30,972			93,458			94,987
Cost of revenue, excluding stock compensation, restructuring, depreciation and amortization		15,552			14,880			45,356			48,082
Depreciation and amortization		3,993			4,561			12,078			13,250
Stock compensation		228			285			809			982
Restructuring charge		—			—			—			209
Cost of revenue		19,773			19,726			58,243			62,523
Gross profit		11,649			11,246			35,215			32,464
Operating expenses:
Selling and marketing, excluding stock compensation and restructuring charge		5,313			4,281			14,736			14,171
General and administrative, excluding stock compensation and restructuring charge		5,071			5,765			15,144			16,187
Stock compensation		481			434			1,601			1,494
Restructuring charge		—			—			—			180
Total operating expenses		10,865			10,480			31,481			32,032
Income from operations		784			766			3,734			432
Other income (expense):
Interest income		6			11			17			36
Interest expense		(1,613	)		(2,305	)		(6,469	)		(6,839	)
Other income (expense), net		(66	)		2			214			535
Loss from continuing operations before income taxes and discontinued operations		(889	)		(1,526	)		(2,504	)		(5,836	)
Income tax benefit (expense)		195			(317	)		(479	)		(951	)
Net Loss from continuing operations before discontinued operations		(694	)		(1,843	)		(2,983	)		(6,787	)
Loss from discontinued operations, net of income taxes		(1,760	)		(553	)		(3,793	)		(647	)
Gain from sale of discontinued operations, net of income taxes		20,674			—			20,674			—
Net Income (loss)		18,220			(2,396	)		13,898			(7,434	)
Accretion of preferred stock dividends		(952	)		(849	)		(2,776	)		(2,476	)
Net Income (loss) attributable to common stockholders	$	17,268		$	(3,245	)	$	11,122		$	(9,910	)
Basic and diluted net loss per common share:
Loss from continuing operations attributable to common shareholders	$	(0.05	)	$	(0.07	)	$	(0.16	)	$	(0.26	)
Loss on discontinued operations	$	(0.05	)	$	(0.02	)	$	(0.10	)	$	(0.02	)
Gain from sale of discontinued operations	$	0.57		$	—		$	0.57		$	—
Net income (loss) attributable to common stockholders	$	0.47		$	(0.09	)	$	0.31		$	(0.28	)
Basic and diluted weighted average number of common shares outstanding		36,464			35,600			36,243			35,466

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

NaviSite Financial Tables

Net Income (Loss) to EBITDA, as Adjusted, Reconciliation

	For the Three Months Ended
	April 30, 2010			April 30, 2009
	Unaudited
	(In thousands)
Net income (loss), as reported	$	18,220		$	(2,396	)
Depreciation		3,672			3,747
Amortization		652			985
Interest income/expense, net		1,607			2,294
Income taxes		(195	)		317
EBITDA		23,956			4,947
Stock-based compensation		709			720
Severance		302			106
Loss from discontinued operations		1,760			553
Gain from sale of discontinued operations		(20,674	)		—
Transaction fees and integration costs		(83	)		30
EBITDA, as adjusted (excludes impairment costs, stock based compensation, severance, discontinued operations, related gain on sale of discontinued operations, transaction fees and integration costs)	$	5,970		$	6,356

	For the Nine Months Ended
	April 30, 2010			April 30, 2009
	Unaudited
	(In thousands)
Net income (loss), as reported	$	13,898		$	(7,434	)
Depreciation		10,773			10,797
Amortization		2,033			2,970
Interest income/expense, net		6,452			6,803
Income taxes		479			951
EBITDA		33,635			14,087
Stock based compensation		2,410			2,476
Severance		354			696
Loss from discontinued operations		3,793			647
Gain from sale of discontinued operations		(20,674	)		—
Transaction fees and integration costs		(49	)		145
EBITDA, as adjusted (excludes impairment costs, stock based compensation, severance, discontinued operations, related gain on sale of discontinued operations, transaction fees and integration costs)	$	19,469		$	18,051

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

NaviSite Financial Tables

Condensed Consolidated Balance Sheets

	April 30, 2010			July 31, 2009
	Unaudited			Unaudited
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	7,800		$	10,534
Accounts receivable, less allowance for doubtful accounts of $1,815 and $1,820 at April 30, 2010 and July 31, 2009, respectively		10,961			16,417
Unbilled accounts receivable		1,654			1,361
Prepaid expenses and other current assets		11,274			6,336
Total current assets		31,689			34,648
Non-current assets		83,301			129,032
Total assets	$	114,990		$	163,680
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Notes payable, current portion	$	4,027		$	10,603
Capital lease obligations, current portion		3,378			3,040
Accounts payable		5,491			5,375
Accrued expenses, deferred revenue, deferred other income and customer deposits		23,239			16,606
Total current liabilities		36,135			35,624
Total non-current liabilities		65,750			132,280
Total liabilities		101,885			167,904
Preferred stock		33,655			30,879
Total stockholders’ equity (deficit)		(20,550	)		(35,103	)
Total liabilities, preferred stock and stockholders’ equity (deficit)	$	114,990		$	163,680

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

NaviSite Financial Tables

Condensed Consolidated Statements of Cash Flow

	For the Three Months Ended
	April 30, 2010			April 30, 2009
	Unaudited
	(In thousands)
Net cash provided by operating activities	$	3,997		$	5,431
Net cash provided by (used for) investing activities		52,598			(3,151	)
Net cash used for financing activities		(49,713	)		(2,381	)
Effect of exchange rate changes on cash		(27	)		32
Net increase (decrease) in cash and cash equivalents		6,855			(69	)
Cash and cash equivalents, beginning of period		945			2,958
Cash and cash equivalents, end of period	$	7,800		$	2,889

	For the Nine Months Ended
	April 30, 2010			April 30, 2009
	Unaudited
	(In thousands)
Net cash provided by operating activities	$	21,070		$	17,475
Net cash provided by (used for) investing activities		44,344			(9,431	)
Net cash used for financing activities		(68,108	)		(8,107	)
Effect of exchange rate changes on cash		(40	)		(309	)
Net increase (decrease) in cash and cash equivalents		(2,734	)		(372	)
Cash and cash equivalents, beginning of period		10,534			3,261
Cash and cash equivalents, end of period	$	7,800		$	2,889

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com

NaviSite Financial Tables

Gross Margin to Cash Gross Margin Reconciliation

	For the Three Months Ended
	April 30, 2010			April 30, 2009
	Unaudited
	(In thousands)
Total revenue	$	31,422		$	30,972
Gross margin		11,649			11,246
Gross margin % to total revenue		37	%		36	%
Depreciation & amortization		3,993			4,561
Stock-based compensation		228			285
Cash basis gross margin	$	15,870		$	16,092
Cash gross margin % to total revenue		51	%		52	%

	For the Nine Months Ended
	April 30, 2010			April 30, 2009
	Unaudited
	(In thousands)
Total revenue	$	93,458		$	94,987
Gross margin		35,215			32,464
Gross margin % to total revenue		38	%		34	%
Depreciation & amortization		12,078			13,250
Stock-based compensation		809			976
Cash basis gross margin	$	48,102		$	46,690
Cash gross margin % to total revenue		51	%		49	%

400 Minuteman Road, Andover, MA 01810, P. 978-682-8300, F. 978-688-8100 www.navisite.com