Earlier this year, the company said it was closing or selling its unprofitable businesses in an attempt to cut costs. Its operating losses to the year ending March 31 were £47.5m.
Chairman Ian Martin said, "Current trading indicates a substantial reduction in operating losses for the first quarter of this financial year, as the benefit of these and other changes begin to flow through our profit and loss account. We expect this trend to continue as the year progresses."
He went on to say that chief executive Dan Thompson had stepped down from the company, in line with his intentions announced earlier this year.
Simon Morris, the group's marketing director, has also resigned to "pursue other interests". Before co-founding 365, Morris was marketing director of Ginger Productions, consumer/programme marketing director of BSkyB, and marketing director at Sega UK.
The company's share price rose by 1.89% to 13.5p in afternoon trading.