- First quarter revenues increased to $52.2 million, up 68% over the prior year quarter
- First quarter service provider revenue increased to $37.5 million, up 78% over the prior year quarter
- Cost per acquisition ("CPA") in the first quarter was $72, a decrease of 12% over the prior year period
- Total paid memberships of 1,951,774 at March 31, 2013, up 60% year-over-year
- First quarter cash provided by operations of $9.9 million
INDIANAPOLIS, April 24, 2013 (GLOBE NEWSWIRE) -- Angie's List, Inc. (Nasdaq:ANGI) announced today first quarter 2013 financial results for the quarter ended March 31, 2013.
"Our business grew very well in the first quarter, achieving new records for membership, service provider revenue and total revenue, due to continued strong and consistent operating metrics," said Angie's List CEO Bill Oesterle. "We continue to gain operating leverage and produced cash flow from our operations. Our first quarter performance demonstrates our ability to continue to rapidly grow our business and produce cash flow, while simultaneously, and significantly, increasing our investments in technology and products. These results reinforce our confidence in our strategy and the long-term operating and financial results we expect to produce."
Key Operating Metrics
| Three months ended | |||
| 3/31/13 | 3/31/12 | Change | |
| Total paid memberships (end of period) | 1,951,774 | 1,221,387 | 60% |
| Gross paid memberships added (in period) | 274,896 | 215,341 | 28% |
| Marketing cost per paid membership acquisition (in period) | $ 72 | $ 82 | (12%) |
| First-year membership renewal rate (in period) | 73% | 73% | flat |
| Average membership renewal rate (in period) | 75% | 76% | (1.0) pts |
| Participating service providers (end of period) | 39,265 | 27,100 | 45% |
| Total service provider contract value (end of period, in thousands) | $ 150,262 | $ 87,335 | 72% |
Market Cohort Analysis
"Our cohorts continued to perform very well in the first quarter," continued Oesterle. "Each cohort recorded significant membership growth with higher penetration rates and increasing total revenue per average paid member."
| Service | Avg. | |||||||
| Membership | Provider | Marketing | Estimated | Annual | ||||
| # of | Avg. Revenue/ | Revenue/Paid | Revenue/Paid | Expense/ | Total Paid | Penetration | Membership | |
| Cohort | Markets | Market | Membership | Membership | Market | Memberships | Rate * | Growth Rate |
| Pre 2003 | 10 | $ 5,092,477 | $ 42.49 | $ 113.35 | $1,272,990 | 381,785 | 9.1% | 40% |
| 2003 - 2007 | 35 | 3,108,535 | 37.26 | 89.24 | 1,318,639 | 1,064,129 | 7.0% | 62% |
| 2008 - 2010 | 103 | 154,654 | 16.38 | 27.09 | 186,423 | 454,629 | 7.2% | 63% |
| Post 2010 | 81 | 12,756 | 13.39 | 18.66 | 52,619 | 51,231 | 3.6% | ** |
| 229 | 1,951,774 | 60% | ||||||
| Cohort table presents financial and operational data for the twelve months ended 3/31/2013 | ||||||||
| * Demographic information used in penetration rate calculations is based on a third party study we commissioned in March, 2013. | ||||||||
| According to the study, the number of U.S. households in our target demographic was 31 million. | ||||||||
| ** Not meaningful | ||||||||
First Quarter Results
First quarter 2013 total revenue was $52.2 million, an increase of 68 percent compared to $31.1 million in the prior year period. Membership revenue in the first quarter of 2013 was $14.6 million, an increase of 47 percent compared to the prior year period. Service provider revenue was the largest component of total revenue at $37.5 million and the fastest growing with a 78 percent growth rate year-over-year. Service provider revenue includes revenue from advertising contracts and fees from e-commerce transactions. Advertising revenue was $32.9 million in the first quarter of 2013, an increase of 89 percent compared to the prior year period and e-commerce revenue was $4.7 million, an increase of 24 percent year-over-year.
Marketing expense increased 12 percent, or $2.1 million, compared to the prior year period. Net loss was $7.9 million, with selling expense of $19.6 million and marketing expense of $19.7 million, compared to a net loss of $13.5 million with selling expense of $12.4 million and marketing expense of $17.6 million in the prior year period. Adjusted EBITDA loss, a non-GAAP financial measure, was $5.8 million, compared to a loss of $11.8 million in the prior year period.
"We remain focused on our unit economics and they continued to improve in the first quarter," said Chuck Hundt, Interim Chief Financial Officer. "We are pleased with the continued leverage we have achieved as well as our cash generated from operations during the period. We will continue to invest in acquiring new members, adding advertising service providers and innovating products to drive further scale and penetration, while maintaining secure levels of liquidity."
Business Outlook
The Company's financial and operating expectations for the second quarter of 2013 are as follows:
- Total revenue in the range of $58.5 million to $59.5 million.
- Marketing expense in the range of $27.8 million to $28.8 million.
Conference Call Information
The company will host a conference call on April 24, 2013 at approximately 5:00 PM (ET) / 2:00 PM (PT) to discuss the quarterly financial results with the investment community. A live webcast of the event will be available on the Angie's List Investor Relations website at http://investor.angieslist.com/.
A live domestic dial-in is available at (877) 380-5664 or (253) 237-1143 internationally. An audio replay will be available at (855) 859-2056 domestically or (404) 537-3406 internationally, using Conference ID 30283709 through April 30, 2013.
Live audio webcast of the presentation will be available on the Angie's List Investor Relations website at http://investor.angieslist.com/.
About Angie's List
Angie's List helps consumers have happy transactions with local service professionals in more than 550 categories of service, ranging from home improvement to health care. More than 2 million subscribers across the U.S. share their consumer experiences and use Angie's List to gain unlimited access to local ratings, exclusive discounts, the Angie's List magazine, the Angie's List complaint resolution service and information about how to make the most of their home improvement projects.
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), Angie's List has disclosed in this press release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP Adjusted EBITDA, which Angie's List defines as earnings before interest, income taxes, depreciation, amortization, and non-cash stock-based compensation. Angie's List uses Adjusted EBITDA internally in analyzing its financial results and has determined to disclose this measure to investors because it believes it will be useful to them, as a supplement to GAAP measures, in evaluating Angie's List's operating performance relative to its industry sector and competitors. Angie's List believes that the use of Adjusted EBITDA provides additional insight for investors to use in evaluation of ongoing operating results and trends. However, non-GAAP financial measures such as Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Angie's List has significant uses of cash flows, including capital expenditures and other contractual commitments, interest payments and income taxes that are not reflected in adjusted EBITDA. Adjusted EBITDA does not consider the potentially dilutive impact of issuing non-cash stock-based compensation to Angie's List's management and other employees. It should also be noted that other companies, including companies in the same industry, may calculate Adjusted EBITDA in a different manner than Angie's List. Angie's List has provided a reconciliation of Adjusted EBITDA measure to the most directly comparable GAAP financial measure.
Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected revenue, future marketing expense and growth opportunities. These forward-looking statements are based on Angie's List's current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to accurately measure and predict revenue per paid membership, membership acquisition costs or costs associated with servicing our members; our ability to protect our brand and maintain our reputation among consumers and local service providers; our ability to attract and retain local service providers to advertise on our service; our ability to increase our pricing on memberships and service provider contracts as we increase our market penetration; our ability to replicate our business model in our less penetrated markets; our success in converting consumers and local service providers into paid memberships and participating service providers; competitive factors; our ability to stay abreast of modified or new laws and regulations applying to our business, including those regarding sales or transaction taxes and privacy regulation; our ability to adequately protect our intellectual property; our ability to manage our growth; and general economic conditions worldwide.
Further information on these factors and other risks that may affect our business is included in filings we make with the Securities and Exchange Commission from time to time, including Angie's List's Annual Report on Form 10-K and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
These documents are or will be available online from the SEC or on the SEC Filings section of the Investor Relations section of our website at http://investor.angieslist.com. Information on our website is not part of this release. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.
| Angie's List, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
| March 31, | December 31, | |
| 2013 | 2012 | |
| (Unaudited) | ||
| Assets | ||
| Cash and cash equivalents | $42,613 | $42,638 |
| Restricted cash | 50 | 50 |
| Short term investments | 20,313 | 10,460 |
| Accounts receivable, net | 9,733 | 7,787 |
| Prepaid expenses and other current assets | 19,284 | 19,810 |
| Total current assets | 91,993 | 80,745 |
| Property and equipment, net | 13,092 | 12,079 |
| Goodwill | 415 | 415 |
| Amortizable intangible assets, net | 2,189 | 2,356 |
| Deferred financing fees, net | 575 | 634 |
| Total assets | $108,264 | $96,229 |
| Liabilities and stockholders' equity (deficit) | ||
| Accounts payable | $6,697 | $6,489 |
| Accrued liabilities | 25,432 | 14,058 |
| Deferred membership revenue | 28,587 | 27,627 |
| Deferred advertising revenue | 27,959 | 23,160 |
| Total current liabilities | 88,675 | 71,334 |
| Long-term debt, including accrued interest | 14,881 | 14,869 |
| Deferred membership revenue, noncurrent | 4,347 | 4,330 |
| Deferred advertising revenue, noncurrent | 298 | 214 |
| Deferred income taxes | 163 | 163 |
| Total liabilities | 108,364 | 90,910 |
| Stockholders' equity (deficit): | ||
| Common stock | 67 | 66 |
| Additional paid-in-capital | 250,853 | 248,326 |
| Treasury stock | (23,719) | (23,719) |
| Accumulated deficit | (227,301) | (219,354) |
| Total stockholders' equity (deficit) | (100) | 5,319 |
| Total liabilities and stockholders' equity (deficit) | $108,264 | $96,229 |
| Angie's List, Inc. | ||
| Condensed Consolidated Statements of Operations | ||
| (in thousands, except per share data) | ||
| Three Months Ended March 31, | ||
| 2013 | 2012 | |
| (Unaudited) | ||
| Revenue | ||
| Membership | $14,637 | $9,975 |
| Service provider | 37,534 | 21,119 |
| Total revenue | 52,171 | 31,094 |
| Operating expenses | ||
| Operations and support | 8,298 | 5,775 |
| Selling | 19,645 | 12,409 |
| Marketing | 19,722 | 17,606 |
| Technology | 5,595 | 3,127 |
| General and administrative | 6,380 | 5,171 |
| Total Operating Expenses | 59,640 | 44,088 |
| Operating loss | (7,469) | (12,994) |
| Interest expense, net | 463 | 456 |
| Loss before income taxes | (7,932) | (13,450) |
| Income tax expense | 15 | ---- |
| Net loss | $ (7,947) | $ (13,450) |
| Net loss per common share – basic and diluted | $ (0.14) | $ (0.24) |
| Weighted average common shares outstanding – basic and diluted | 57,949 | 56,964 |
| Non-cash stock-based compensation | ||
| Operations and support | $16 | $ ---- |
| Selling | 25 | ---- |
| Technology | 215 | 146 |
| General and administrative | 566 | 534 |
| Total non-cash stock-based compensation | $822 | $680 |
| Reconciliation of adjusted EBITDA (loss) to net loss (Unaudited): | ||
| Net loss: | $ (7,947) | $ (13,450) |
| Income tax | 15 | ---- |
| Interest expense, net | 463 | 456 |
| Depreciation and amortization | 842 | 529 |
| Non-cash stock-based compensation | 822 | 680 |
| Adjusted EBITDA (loss) | $ (5,805) | $ (11,785) |
| Angie's List, Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (Amounts in thousands) | ||
| Three Months Ended March 31, | ||
| 2013 | 2012 | |
| (Unaudited) | ||
| Operating activities | ||
| Net loss | $ (7,947) | $ (13,450) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 842 | 529 |
| Amortization of debt discount, deferred financing fees and bond premiums | 162 | 65 |
| Noncash compensation expense | 822 | 680 |
| Changes in certain assets: | ||
| Accounts receivable | (1,946) | (1,293) |
| Prepaid expenses and other current assets | 526 | (3,754) |
| Changes in certain liabilities: | ||
| Accounts payable | 208 | (2,462) |
| Accrued liabilities | 11,374 | 13,316 |
| Deferred advertising revenue | 4,883 | 2,791 |
| Deferred membership revenue | 977 | 1,308 |
| Net cash provided by (used in) operating activities | 9,901 | (2,270) |
| Investing activities | ||
| Restricted cash | ---- | 250 |
| Purchase of short-term investments | (9,944) | ---- |
| Property and equipment | (1,514) | (1,318) |
| Data acquisition costs | (174) | (715) |
| Net cash used in investing activities | (11,632) | (1,783) |
| Financing activities | ||
| Proceeds from common stock issuances under employee stock option plans | 1,706 | 16 |
| Net cash provided by financing activities | 1,706 | 16 |
| Net decrease in cash and cash equivalents | (25) | (4,037) |
| Cash and cash equivalents at beginning of period | 42,638 | 88,607 |
| Cash and cash equivalents at end of period | $ 42,613 | $ 84,570 |