- Revenue of $76.7 million for the fourth
quarter of 2016 and $323.3 million for the full year 2016
- Net income of $8.9 million for the
fourth quarter of 2016 and net loss of $7.9 million for the full
year 2016
- Adjusted EBITDA1 of $16.9 million for
the fourth quarter of 2016 and $27.6 million for the full year
2016
- Gross member additions of 0.8 million
during the fourth quarter of 2016 and 2.9 million for the full year
2016, bringing our total membership count to 5.1 million as of the
end of the year
- Net participating service provider
additions of 1,242 for the full year 2016, bringing the total
number of participating service providers to 55,644 as of the end
of the year
Angie’s List, Inc. (NASDAQ:ANGI) today announced financial
results for the quarter and year ended December 31, 2016.
“2016 was a transformative year for Angie’s List,” said Scott
Durchslag, President and Chief Executive Officer of Angie’s List.
“We achieved a number of important objectives, including removing
the reviews paywall, introducing freemium tiers, migrating our
technology platform, strengthening our marketing and sales
processes and delivering new products to our customers.”
“These accomplishments enabled us to end the year with momentum
in new member growth as we added approximately 785,000 gross
members in the fourth quarter and finished the year with 5.1
million members, an increase of 55% from a year ago,” continued
Durchslag. “Importantly, we achieved these results while balancing
investments for growth with significant reductions in our cost
structure. While this is good progress, we continue to expect it
will take time before we meaningfully improve trends in our
financial results.”
“In 2017, we have three priorities: 1) Build products that
increase member engagement, 2) Strengthen the value proposition to
our service providers, and 3) Continue to improve our cost
structure. I am excited about the opportunity ahead of us and look
forward to building on the strong foundation that we established
last year.”
1 Adjusted EBITDA is a non-GAAP financial measure.
Key Operating Metrics
Three months ended December 31,
2016 December 31, 2015 Change Total
free memberships (end of period)1 2,543,705 — N/A Total paid
memberships (end of period) 2,550,941
3,297,395 (23 )% Total memberships (end of period) 5,094,646
3,297,395 55 % Gross free memberships added (in period)2
775,912 — N/A Gross paid memberships added (in period) 9,298
214,447 (96 )% Gross memberships added (in
period) 785,210 214,447 266 % Average paid membership
renewal rate (in period)3 64 % 76 % (12) pts Participating
service providers (end of period)4 55,644 54,402 2 % Total service
provider contract value (end of period, in thousands) $ 250,588 $
270,841 (7 )%
Total service provider contract value
backlog (end of period, in thousands)
$
147,335
$
162,478
(9
)%
Twelve months ended
December 31, 2016
December 31,2015
Change
Gross free memberships added (in
period)2
2,509,146 — N/A Gross paid memberships added (in period)
348,302 1,033,222 (66 )% Gross memberships
added (in period) 2,857,448 1,033,222 177 % Average paid
membership renewal rate (in period)3 69 % 77 % (8) pts
(1) Total free memberships reflects the number of free members
as of the end of the period who joined subsequent to us dropping
our ratings and reviews paywall in June 2016, as well as the number
of former paid members who requested a change in membership status
from paid to free over the same time period.
(2) Gross free memberships added represents the total number of
new free members added during the reporting period. For the three
and twelve months ended December 31, 2016, this figure
includes new free members added since we dropped our ratings and
reviews paywall in June 2016 but does not include former paid
members who requested a change in membership status from paid to
free over the same periods.
(3) Average paid membership renewal rate reflects the percentage
of all paid memberships expiring in the reporting period that are
renewed as paid members.
(4) We include in participating service providers the total
number of service providers under contract for advertising,
e-commerce or both at the end of the period.
Fourth Quarter Results
Revenue
Total revenue for the fourth quarter of 2016 was $76.7 million,
compared to $86.3 million in the year-ago quarter, driven by
declines in both service provider and membership revenue.
Service provider revenue, which includes advertising and
e-commerce, was $64.2 million, a decline of 8% compared to a year
ago. The ongoing impact of our technology platform migration
earlier in the year contributed to lower e-commerce revenue and
service provider renewal rates during the quarter, which negatively
impacted total service provider revenue.
Membership revenue was $12.5 million, down 25% from the year-ago
quarter, due to decreases in paid membership renewal and conversion
rates associated with the removal of our ratings and reviews
paywall in June and lower advertising spend as compared to the
prior year, which drove significant quarter over quarter declines
in both gross paid memberships added and total paid
memberships.
Operating Expenses
Operations and support expense was $7.7 million, a decrease from
$12.6 million in the year-ago quarter, due to a decline in
publication costs associated with our implementation of a digital
content distribution strategy as well as lower compensation and
personnel-related costs.
Selling expense was $26.6 million, down from $27.4 million in
the year-ago period, largely related to a decline in compensation
and personnel-related costs.
Marketing expense, which now includes the marketing costs that
were previously classified in general and administrative expense,
was $6.3 million, a decrease from $10.1 million in the year-ago
quarter, due to a reduction in advertising spend as we adjusted the
level and timing of such spend in the current year to align with
our integrated marketing launch for freemium.
Product and technology expense was $15.7 million, an increase
from $9.7 million in the year-ago period, largely attributable to
higher compensation and personnel-related costs and depreciation
and amortization expense on our new technology platform since
becoming operational.
General and administrative expense was $10.2 million, a decrease
from $11.7 million in the year-ago quarter, driven primarily by
period over period decreases in outsourced services expenditures
and professional fees.
Adjusted EBITDA1
Adjusted EBITDA1 was $16.9 million for the period as compared to
adjusted EBITDA1 of $19.6 million in the year-ago period.
Cash
Cash provided by operations for the fourth quarter was $2.9
million. At December 31, 2016, the balance of cash, cash
equivalents and investments was $38.9 million.
Capital Expenditures
Capital expenditures declined to $2.7 million for the quarter as
compared to $7.4 million in the year-ago quarter, due in large part
to reductions in capitalized website and software development costs
associated with our new technology platform, which is now in
service.
1 Adjusted EBITDA is a non-GAAP financial measure.
Full Year 2016 Results
Revenue
Total revenue for full year 2016 was $323.3 million, a decrease
from $344.1 million in the prior year, driven by declines in both
membership and service provider revenue.
Service provider revenue, which includes advertising and
e-commerce, was $265.2 million, a decline of 4% compared to the
prior year, due to lower e-commerce revenue and a decrease in
service provider renewal rates.
Membership revenue was $58.1 million, down 15% from the prior
year, due to decreases in paid membership renewal and conversion
rates associated with the removal of our ratings and reviews
paywall in June and lower advertising spend as compared to the
prior year, which drove significant year over year declines in both
gross paid memberships added and total paid memberships.
Operating Expenses
Operations and support expense was $40.3 million, a decrease
from $56.1 million in the prior year, due to declines in
publication costs, compensation and personnel-related costs and
credit card processing fees.
Selling expense was $111.0 million, down from $116.0 million in
the prior year, largely related to a decline in compensation and
personnel-related costs in connection with recent changes in our
sales compensation plans and organizational structure as well as
lower service provider contract value bookings.
Marketing expense, which now includes the marketing costs that
were previously classified in general and administrative expense,
was $65.1 million, a decrease from $83.8 million in the prior year,
due to a reduction in advertising spend in order to make strategic
investments in other areas of the business.
Product and technology expense was $56.0 million, an increase
from $36.7 million in the prior year, largely attributable to
higher compensation and personnel-related costs and depreciation
and amortization expense on our new technology platform since
becoming operational.
General and administrative expense was $54.0 million, an
increase from $38.3 million in the prior year, driven by year over
year increases in outsourced services expenditures and professional
fees, compensation and personnel-related costs, including non-cash
stock-based compensation expense, and bad debt expense.
Adjusted EBITDA1
Adjusted EBITDA1 was $27.6 million for the year as compared to
adjusted EBITDA1 of $28.0 million in the prior year.
Cash
Cash provided by operations for the year was $1.6 million. At
December 31, 2016, the balance of cash, cash equivalents and
investments was $38.9 million.
Capital Expenditures
Capital expenditures declined to $18.6 million for the year as
compared to $34.3 million in the prior year, due in large part to
reductions in capitalized website and software development costs
associated with our new technology platform, which is now in
service.
1 Adjusted EBITDA is a non-GAAP financial measure.
Angie’s List, Inc.Condensed
Consolidated Balance Sheets (in thousands)
December 31, 2016 December 31,
2015 (Unaudited)
Assets Cash and cash
equivalents
$ 22,402 $ 32,599 Short-term investments
16,541 23,976 Accounts receivable, net
16,371 17,019
Prepaid expenses and other current assets
17,002
19,026 Total current assets
72,316
92,620 Property, equipment and software, net
82,714 77,635
Goodwill
1,145 1,145 Amortizable intangible assets, net
1,219 2,011
Total assets
$ 157,394 $ 173,411
Liabilities and stockholders’ equity (deficit) Accounts
payable
$ 2,886 $ 10,525 Accrued liabilities
23,128 20,287 Deferred membership revenue
23,208
32,702 Deferred advertising revenue
42,297 48,930 Current
maturities of long-term debt
1,500
1,500 Total current liabilities
93,019 113,944
Long-term debt, net
56,142 56,134 Deferred membership
revenue, noncurrent
2,032 3,742 Deferred advertising
revenue, noncurrent
456 640 Other liabilities, noncurrent
1,245 1,332 Total liabilities
152,894 175,792 Stockholders’ equity (deficit): Common stock
68 67 Additional paid-in-capital
290,182 275,445
Treasury stock
(23,719 ) (23,719 ) Accumulated
deficit
(262,031 ) (254,174 ) Total
stockholders’ equity (deficit)
4,500
(2,381 )
Total liabilities and stockholders’ equity
(deficit) $ 157,394 $ 173,411
Angie’s List,
Inc.Condensed Consolidated Statements of Operations(in
thousands, except per share data)
Three Months Ended December 31, Twelve
Months Ended December 31, 2016 2015
2016 2015 (Unaudited) (Unaudited)
Revenue Membership
$ 12,450 $ 16,565
$
58,090 $ 67,992 Service provider
64,218 69,690
265,239 276,133 Total revenue
76,668 86,255
323,329 344,125
Operating
expenses Operations and support
7,676 12,598
40,293 56,074 Selling
26,572 27,440
111,046
116,027 Marketing
6,250 10,059
65,140 83,789 Product
and technology
15,660 9,684
55,990 36,661 General and
administrative
10,220 11,717
53,954
38,316 Total operating expenses
66,378 71,498
326,423 330,867
Operating income (loss) 10,290
14,757
(3,094 ) 13,258 Interest expense, net
1,335 591
4,720 2,971
Income (loss) before income taxes
8,955 14,166
(7,814
) 10,287 Income tax expense
7 16
43 44
Net income (loss) $
8,948 $ 14,150
$ (7,857 )
$ 10,243 Net income (loss) per common share — basic
$ 0.15 $ 0.24
$ (0.13 ) $ 0.18
Net income (loss) per common share — diluted
$ 0.15 $
0.24
$ (0.13 ) $ 0.17 Weighted-average
number of common shares outstanding — basic
59,228 58,532
58,860 58,521 Weighted-average number of common shares
outstanding — diluted
60,112 59,722
58,860 58,783
Non-cash stock-based compensation expense Operations
and support
$ (6 ) $ 31
$ 159 $
109 Selling
460 142
1,745 482 Marketing
13 41
372 230 Product and technology
484 253
1,949
931 General and administrative
2,263 2,159
10,519 7,123
Total non-cash stock-based
compensation expense $ 3,214 $ 2,626
$ 14,744 $ 8,875
Reconciliation of net income (loss) to Adjusted
EBITDA1 Net income (loss)
$ 8,948 $ 14,150
$ (7,857 ) $ 10,243 Income tax expense
7 16
43 44 Interest expense, net
1,335 591
4,720 2,971 Depreciation and amortization
4,040 1,611
13,148 6,402 Non-cash stock-based compensation expense
3,214 2,626
14,744 8,875 Legal settlement accrual
(671 ) (272 )
2,829 (2,113 ) Non-cash
long-lived asset impairment charge
— 892
— 1,578
Adjusted EBITDA1
$ 16,873 $ 19,614
$
27,627 $ 28,000
1 Adjusted EBITDA is a non-GAAP financial measure.
Angie’s List,
Inc.Condensed Consolidated Statements of Cash Flows(in
thousands)
Three Months Ended December 31, Twelve
Months Ended December 31, 2016 2015
2016 2015 (Unaudited) (Unaudited)
Operating activities Net income (loss)
$ 8,948
$ 14,150
$ (7,857 ) $ 10,243 Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: Depreciation and amortization
4,040 1,611
13,148 6,402 Amortization of debt discount, deferred
financing fees and bond premium
170 171
663 697
Non-cash stock-based compensation expense
3,214 2,626
14,744 8,875 Non-cash long-lived asset impairment charge
— 892
— 1,578 Non-cash loss on disposal of long-lived
assets
2 21
173 300 Deferred income taxes
7 17
22 17 Changes in certain assets: Accounts receivable, net
446 (804 )
648 (1,878 ) Prepaid expenses and other
current assets
1,748 2,142
2,024 (906 ) Changes in
certain liabilities: Accounts payable
(4,815 ) (2,579
)
(6,717 ) 5,467 Accrued liabilities
(4,508
) (9,877 )
2,808 (2,539 ) Deferred advertising
revenue
(2,391 ) (1 )
(6,817 ) 502
Deferred membership revenue
(3,961 ) (3,119 )
(11,204 ) (2,067 )
Net cash provided by operating
activities 2,900 5,250
1,635 26,691
Investing activities Purchases of investments
—
(10,857 )
(17,474 ) (24,537 ) Sales of investments
7,631 11,411
24,891 24,766 Property, equipment and
software
(926 ) (2,602 )
(4,932 )
(9,075 ) Capitalized website and software development costs
(1,733 ) (4,764 )
(13,693 ) (25,193 )
Intangible assets
(15 ) (119 )
(171
) (498 )
Net cash provided by (used in) investing
activities 4,957 (6,931 )
(11,379 )
(34,537 )
Financing activities Proceeds from exercise
of stock options
691 675
2,047 675 Proceeds from
employee stock purchase plan
476 —
476 — Taxes paid
on behalf of employees related to net share settlement
(11
) —
(2,529 ) — Fees paid to lender
(212
) —
(212 ) — Payments on capital lease
obligation
(60 ) (57 )
(235 ) (221 )
Net cash provided by (used in) financing activities
884 618
(453 ) 454
Net
increase (decrease) in cash and cash equivalents $
8,741 $ (1,063 )
$ (10,197 ) $ (7,392 )
Cash and cash equivalents, beginning of period
13,661
33,662
32,599 39,991
Cash and cash
equivalents, end of period $ 22,402 $
32,599
$ 22,402 $ 32,599
Conference Call Information
The Company will host a conference call today, February 15,
2017, at 8:30 a.m. ET to discuss the financial results
with the investment community. A live audio 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 passcode 64199413 through February 22,
2017.
About Angie’s List
Finding a pro for a job well done is made easy online by
visiting Angieslist.com. More than
five million members nationwide use Angie’s List, a leading
provider of reviews, offers and information in over 700 service
categories, to help them improve their homes. Built on a foundation
of more than 10 million verified reviews of local service, Angie’s
List connects members directly to its online marketplace of
services and offers unique tools and support designed to improve
the local service experience for both members and service
professionals.
Non-GAAP Financial Measures
In addition to providing financial measurements based on
generally accepted accounting principles in the United States
(“GAAP”), we disclose in this press release financial information
that was not prepared in accordance with GAAP. This information
includes non-GAAP Adjusted EBITDA, which we define as earnings
before interest, income taxes, depreciation, amortization, non-cash
stock-based compensation expense, amounts recorded for any legal
settlement accrual and non-cash long-lived asset impairment
charges, as applicable. We use Adjusted EBITDA internally in
analyzing our financial results and performance and determined to
disclose this measure as we believe it will be useful, as a
supplement to GAAP measures, in evaluating our operating
performance relative to our industry sector and competitors,
thereby providing additional insight for investors to use with
respect to our ongoing operating results and trends. Adjusted
EBITDA is also a financial covenant with which we are required to
comply under the financing agreement that governs our long-term
indebtedness, further supporting our decision to disclose this
measure. 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. We have
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 our 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 we do. We provided a reconciliation of the Adjusted
EBITDA measure to the most directly comparable GAAP financial
measure herein.
Forward-Looking and Cautionary Statements
This press release contains statements that constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, each as amended. All statements other than statements
of historical fact, including statements regarding market and
industry prospects and future results of operations or financial
position, made in this press release are forward-looking. In many
cases, you can identify forward-looking statements by terminology,
such as “may”, “should”, “will”, “expects”, “intends”, “plans”,
“anticipates”, “believes”, “estimates”, “predicts”, “potential” or
“continue” or the negative of such terms and other comparable
terminology. The forward-looking information may include, among
other information, statements concerning our estimated and
projected earnings, revenues, costs, expenditures, cash flows,
growth rates, financial results, our plans and objectives for
future operations, changes to our business model, growth
initiatives or strategies, profitability plans, evaluation of
strategic alternatives, availability of debt or equity financing to
support our liquidity needs or the expected outcome or impact of
pending or threatened litigation. There may also be other
statements of expectations, beliefs, future plans and strategies,
anticipated events or trends and similar expressions concerning
matters that are not historical facts. Risks and uncertainties may
affect the accuracy of forward-looking statements.
For a discussion of these factors and other risks and
uncertainties that may affect our business or cause actual results
to differ materially from those contained in our forward-looking
statements, please refer to the filings we make with the Securities
and Exchange Commission from time to time, including our Annual
Report on Form 10-K and 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, whether as a result of new information,
future events or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170215005551/en/
Angie’s List, Inc.Investor Relations:Leslie Arena,
317-808-4527lesliea@angieslist.comorPublic
Relations:Cheryl Reed,
317-396-9134cherylr@angieslist.com
Angi (NASDAQ:ANGI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Angi (NASDAQ:ANGI)
Historical Stock Chart
From Apr 2023 to Apr 2024
