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TheStreet Open House

Angie's List Reports Second Quarter 2014 Results

Stocks in this article: ANGI

  • Gross member additions of approximately 399,000 at an average cost per acquisition of $90
  • Revenue of $78.9 million, representing a 33% increase over the prior year quarter
  • Cash provided by operations of $2.6 million and $17.5 million, respectively, for the three and six month periods ended June 30, 2014

INDIANAPOLIS, July 23, 2014 (GLOBE NEWSWIRE) -- Angie's List, Inc. (Nasdaq:ANGI) announced today second quarter 2014 financial results for the quarter ended June 30, 2014.

"We reported solid results for the second quarter while continuing to invest in our marketplace," said Angie's List CEO Bill Oesterle. "We increased marketing spend during a seasonally strong period and had a record quarter in gross new member additions, which we believe reflects the continued resonance of our value proposition. While revenue growth in e-commerce was lower than expected, we continued to make progress against our strategy of enabling service providers and populating their stores with offers. We expect significant improvement in margin in the second half of the year and continue to see compelling opportunities for growth."

Key Operating Metrics
       
Three months ended 6/30/14 6/30/13 Change
Total paid memberships (end of period) 2,838,863 2,162,601 31%
Gross paid memberships added (in period) 398,812 347,342 15%
Marketing cost per paid membership acquisition (in period)  $ 90  $ 80 13%
First-year membership renewal rate (in period) 74% 75% (1.0) pts
Average membership renewal rate (in period) 77% 78% (1.0) pts
Participating service providers (end of period) 51,076 42,452 20%
Total service provider contract value (end of period, in thousands)  $ 224,171  $ 165,566 35%
       
Six months ended 6/30/14 6/30/13 Change
Gross paid memberships added (in period) 685,438 622,238 10%
Marketing cost per paid membership acquisition (in period)  $ 87  $ 77 13%
First-year membership renewal rate (in period) 73% 75% (2.0) pts
Average membership renewal rate (in period) 77% 77% flat

Market Cohort Analysis

"Our performance by cohort highlights the continued strength of our business model," continued Oesterle. "Membership growth rates remain strong, even in our oldest cohorts, and we grew penetration in every cohort during the second quarter."

Cohort # of Markets Average Revenue/ Market Membership Revenue/Paid Membership Service Provider Revenue/Paid Membership Average Marketing Expense/ Market Total Paid Memberships Estimated Penetration Rate* Annual Membership Growth Rate
Pre-2003 10  $ 6,990,903  $ 36.23  $ 110.60  $ 1,500,899 534,416 13.6% 28%
2003-2007 35 5,129,500 32.08 100.02 1,580,604 1,542,153 10.7% 31%
2008-2010 103 316,235 16.70 39.86 216,490 648,226 11.1% 29%
Post 2010 105 34,387 12.31 27.91 62,623 114,068 6.6% 74%
Total 253         2,838,863    
Cohort table presents financial and operational data for the twelve months ended June 30, 2014.
                 
* Demographic information used in penetration rate calculations is based on a third-party study we commissioned in June 2014. According to the study, the number of U.S. households in our target demographic was 29 million.

Second Quarter Results

Total revenue for the second quarter of 2014 was $78.9 million, an increase of 33 percent compared to the prior year period. Membership revenue in the second quarter of 2014 was $18.5 million, an increase of 16 percent compared to the prior year period. Service provider revenue remains the largest and fastest growing component of total revenue at $60.4 million for the quarter, representing a 39 percent growth rate year over year. Service provider revenue includes revenue from advertising contracts and fees from e-commerce transactions. Advertising revenue was $52.6 million in the second quarter of 2014, an increase of 37 percent compared to the prior year period, and e-commerce revenue was $7.8 million, an increase of approximately 57 percent year over year.

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