Ancestry.com Subscriber Growth of 22%
Year-Over-Year
2011 Total Revenue $400 million, Up 33%
Year-Over-Year
Ancestry.com Inc. (Nasdaq:ACOM), the world's largest online family
history resource, today reported financial results for the quarter
and full year ended December 31, 2011.
"Our fourth quarter represented a strong end to a very
productive 2011 for Ancestry.com, a year in which we generated $400
million in revenues, $145 million in adjusted EBITDA and
greater than 20% growth in our subscriber base," said Tim Sullivan,
Chief Executive Officer of Ancestry.com. "We believe we are making
great strides on building out our product, and we are particularly
excited about some of the innovations we expect to deliver in 2012
as we continue working to enrich the family history experience for
our subscribers."
Ancestry.com Web Sites Highlights
- Subscribers totaled 1,703,000 as of December 31, 2011, a 22%
increase over the end of 2010 and up slightly from the third
quarter of 2011.
- Gross subscriber additions were 220,000 in the fourth quarter
of 2011, compared to 203,000 in the fourth quarter of 2010 and
274,000 in the third quarter of 2011.
- Monthly churn1 was 3.8% in the fourth quarter of 2011, compared
to 3.9% in the fourth quarter of 2010 and 4.2% in the third quarter
of 2011.
- Subscriber acquisition cost2 in the fourth quarter of 2011 was
$107.88, compared to $96.87 in the fourth quarter of 2010 and
$93.64 in the third quarter of 2011.
- Average monthly revenue per subscriber3 in the fourth quarter
of 2011 was $18.38, compared to $17.78 in the fourth quarter of
2010 and $18.68 in the third quarter of 2011.
Fourth Quarter and Full Year 2011 Financial
Highlights
- Total revenue for the fourth quarter of 2011 was $104.2
million, an increase of 26% over $82.7 million in the fourth
quarter of 2010, driven by growth in our core Ancestry.com Web
sites revenues of 27%. For the full year 2011, total revenue was
$399.7 million, an increase of 32.8% over the full year 2010, with
Ancestry.com Web site revenue growth of 34%.
- Operating income for the fourth quarter of 2011 was $27.6
million, compared to $17.9 million in the fourth quarter of 2010.
For the full year 2011, operating income was $95.5 million compared
to $60.6 million for the full year 2010.
- Adjusted EBITDA4 for the fourth quarter of 2011 was $40.7
million, compared to $29.7 million in the fourth quarter of 2010.
Adjusted EBITDA margin for the fourth quarter of 2011 was 39.0%,
compared to 35.9% in the fourth quarter of 2010. For the full year
2011, adjusted EBITDA was $144.8 million, compared to $101.0
million for the full year 2010. Adjusted EBITDA margin for the full
year 2011 was 36.2%, up from 33.6% for the full year 2010.
- Net income was $18.3 million, or $0.40 per fully diluted share,
for the fourth quarter of 2011 compared to $12.6 million, or $0.25
per fully diluted share, in the fourth quarter of 2010. For the
full year 2011, net income was $62.9 million, or $1.29 per fully
diluted share, compared to $36.8 million, or $0.76 per fully
diluted share, for the full year 2010.
- Free cash flow5 totaled $106.4 million for the full year 2011
compared to $60.4 million for the full year 2010.
- Cash and cash equivalents totaled $49.0 million as of December
31, 2011.
Recent Business Highlights
- Partnered with NBC for the third season of the Who Do You Think
You Are? television series, which premiered on February 3,
2012.
- Added over 600 million records from more than 380 content
collections during 2011. Collections of note include:
- World Memory Project, which includes information from four
museum collections on more than 30,000 victims of the Holocaust and
Nazi persecution (in partnership with the US Holocaust Memorial
Museum)
- UK parish records for Warwickshire and Dorset
- 50 million U.S. vital records from over 20 states
- Australian Electoral Rolls with over 35 million records
- German Navy books from World War I
- UK Silver War Badge Records, 1914-1920
- 60 million U.S. World War II records including Young Men's
Draft Cards and Navy Muster Rolls
- 25 million Irish vital records including civil registration,
baptism, marriage and burial records
- 1930 Mexico National Census, the most comprehensive Mexican
census publically available
- Launched Ancestry.com's first mobile app for Android devices,
available for free, which allows users to view and edit existing
family trees, build new family trees from scratch, and view
historical records that have been attached on Ancestry.com –
anytime, anywhere.
- Released the upgraded version of the Ancestry.com Mobile app
for the iPhone, iPad and iPod touch. Available for free at the
iTunes App Store, the updated app introduced hints to historical
records and in-app purchasing, allowing non-Ancestry.com
subscribers to view and purchase historical records. Ancestry.com
Mobile apps were downloaded approximately 1.8 million times in 2011
and 2.7 million times since inception.
- Released Ancestry.com Family Tree Maker® 2012 with TreeSync
capabilities for PCs and Macs, which enables users to easily sync
their desktop trees and their trees online at Ancestry.com to share
with invited guests, engage with the broader community and continue
their research.
- Beta launched the Ancestry.com Facebook application, which
helps new users start building their family tree via connected
family members on Facebook.
Business Outlook
The Company's financial and operating expectations for the first
quarter and full year 2012 are as follows:
First Quarter 2012
- Revenue in the range of $106 to $108 million
- Adjusted EBITDA excluding DNA investment6 of $29.5 to $31.5
million
- DNA investment of $2 to $3 million
- Adjusted EBITDA in the range of $27 to $29 million
- Ending subscribers in the range of 1,825,000 to 1,835,000
Full Year 2012
- Revenue in the range of $455 to $470 million
- Adjusted EBITDA excluding DNA investment6 of $167.5 to $177.5
million
- DNA investment of $10 to 15 million
- Adjusted EBITDA in the range of $155 to $165 million
- Ending subscribers of approximately 1,915,000 to 1,950,000
Conference Call & Webcast
Ancestry.com will host a conference call with analysts and
investors today at 3:00 p.m. MT (5:00 p.m. ET). An accompanying
slide presentation and a live webcast of the conference call will
be available at the investor relations section of the Ancestry.com
Web site, http://ir.ancestry.com/. Participants can also access the
conference call by dialing 888-806-6221 (within the United States),
or 913-312-0374 (international callers) approximately ten minutes
prior to the start time.
A replay of the call will be available approximately two hours
after the call has ended and will be available through Wednesday,
February 22, 2012. To access the replay, dial 888-203-1112 (within
the United States), or 719-457-0820 (international callers) and
enter the replay passcode 8868044. The webcast replay will also be
available for 12 months on the investor relations section of the
Ancestry.com Web site, http://ir.ancestry.com/, under Events and
Presentations.
Use of Non-GAAP Measures
Management believes that adjusted EBITDA and free cash flow are
useful measures of operating performance because they exclude items
that we do not consider indicative of our core performance. In the
case of adjusted EBITDA, we adjust net income for such expenses as
interest, income taxes, stock-based compensation and certain
non-cash and non-recurring items. Free cash flow subtracts from
adjusted EBITDA the capitalization of content databases, purchases
of property and equipment and cash paid for income taxes and
interest. However, these non-GAAP measures should be considered in
addition to, not as a substitute for or superior to, net income and
net cash provided by operating activities, or other financial
measures prepared in accordance with GAAP. A reconciliation to the
GAAP equivalents of these non-GAAP measures is contained in tabular
form on the attached unaudited summary financial statements.
Our management uses adjusted EBITDA and free cash flow as
measures of operating performance; for planning purposes, including
the preparation of our annual operating budget; to allocate
resources to enhance the financial performance of our business; to
evaluate the effectiveness of our business strategies; to provide
consistency and comparability with past financial performance; to
facilitate a comparison of our results with those of other
companies; and in communications with our board of directors
concerning our financial performance. We also use adjusted EBITDA
and have used free cash flow as factors when determining the
incentive compensation pool.
About Ancestry.com
Ancestry.com Inc. (Nasdaq:ACOM) is the world's largest online
family history resource, with more than 1.7 million paying
subscribers. More than 8 billion records have been added to the
site in the past 15 years. Ancestry users have created more than 31
million family trees containing over 4 billion profiles. In
addition to its flagship site www.ancestry.com, Ancestry.com offers
several localized Web sites designed to empower people to discover,
preserve and share their family history.
Forward-looking Statements
This press release contains forward-looking statements. These
statements relate to future events or to future financial
performance and involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, levels of
activity, performance, or achievements to be materially different
from those anticipated in these forward-looking statements. In some
cases, you can identify forward-looking statements by the use of
words such as "appears," "may," "designed," "expect," "intend,"
"focus," "seek," "anticipate," "believe," "estimate," "predict,"
"potential," "should," "continue" or "work" or the negative of
these terms or other comparable terminology. These statements
include statements describing our subscriber base, our reach, our
activities to enhance subscribers' experience and deliver product
innovations, our activities to promote our products, our business
outlook, our leadership position and our opportunities and
prospects for growth, including growth in revenues, adjusted EBITDA
and number of subscribers. These forward-looking statements are
based on information available to us as of the date of this press
release. Forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from those anticipated by these forward-looking statements. Such
risks and uncertainties include a variety of factors, some of which
are beyond our control. In particular, such risks and uncertainties
include our continued ability to attract and retain subscribers;
our continued ability to acquire content and make it available
online; our ability to add tools and features and provide value to
satisfy customer demand; difficulties encountered in integrating
acquired businesses and retaining customers; the timing and amount
of investments in our DNA service; the adverse impact of
competitive product announcements; failure of the third season of
Who Do You Think You Are? to yield results comparable to the
earlier seasons; failure to achieve anticipated revenues and
operating performance; changes in overall economic conditions; the
loss of key employees; competitors' actions; pricing and gross
margin pressures; inability to control costs and expenses; and
significant litigation.
Information concerning additional factors that could cause
results to differ materially from those projected in the
forward-looking statements is contained under the caption "Risk
Factors" in our Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2011, and in discussions in other of our
SEC filings.
These forward-looking statements should not be relied upon as
representing our views as of any subsequent date and we assume no
obligation to publicly update or revise these forward-looking
statements for any reason, whether as a result of new information,
future events, or otherwise.
______________________________
1 Monthly churn is a measure representing the number of
subscribers to the Ancestry website that cancel in the quarter
divided by the sum of beginning subscribers and subscriber
additions during the quarter. To arrive at monthly churn, the
results are divided by three. 2 Subscriber acquisition cost is
external marketing and advertising expense associated with the
Ancestry website, divided by gross subscriber additions to the
Ancestry website in the quarter. 3 Average monthly revenue per
subscriber is total subscription revenues earned in the quarter
from subscriptions to the Ancestry.com Web sites divided by the
average number of subscribers in the quarter, divided by three. The
average number of subscribers for the quarter is calculated by
taking the average of the beginning and ending number of
subscribers for the quarter. 4 Adjusted EBITDA is defined as net
income (loss) plus net interest (income) expense; income tax
expense; non-cash charges including depreciation, amortization,
impairment of intangible assets and stock-based compensation
expense; and certain non-recurring (income) expense. 5 Free cash
flow subtracts from adjusted EBITDA capitalization of content
databases, purchases of capital and equipment and cash paid for
income taxes and interest. 6 Assumes mid-point of planned DNA
investment.
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Ancestry.com
Inc. |
Consolidated Balance
Sheets |
(in
thousands) |
|
|
|
|
|
December 31,
2011 |
|
December 31,
2010 |
Assets |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ 48,998 |
|
$ 65,519 |
Restricted cash |
1,702 |
|
2,476 |
Accounts receivable,
net |
7,599 |
|
6,990 |
Income tax
receivable |
1,763 |
|
8,094 |
Deferred income
taxes |
4,823 |
|
3,873 |
Prepaid expenses and
other current assets |
7,945 |
|
9,243 |
Total current assets |
72,830 |
|
96,195 |
Property and equipment,
net |
21,701 |
|
21,252 |
Content databases,
net |
76,646 |
|
65,418 |
Intangible assets,
net |
17,594 |
|
34,281 |
Goodwill |
302,422 |
|
303,374 |
Other assets |
2,656 |
|
1,666 |
Total assets |
$ 493,849 |
|
$ 522,186 |
Liabilities and stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ 9,817 |
|
$ 9,451 |
Accrued expenses |
34,725 |
|
36,978 |
Deferred
revenues |
108,654 |
|
89,301 |
Debt |
10,000 |
|
-- |
Total current
liabilities |
163,196 |
|
135,730 |
Deferred income
taxes |
14,925 |
|
20,571 |
Other long-term
liabilities |
5,219 |
|
2,018 |
Total liabilities |
183,340 |
|
158,319 |
Commitments and contingencies |
|
|
|
Stockholders'
equity: |
|
|
|
Common stock |
48 |
|
45 |
Additional paid-in
capital |
374,948 |
|
328,957 |
Treasury stock |
(162,168) |
|
-- |
Accumulated other
comprehensive income |
564 |
|
643 |
Retained earnings |
97,117 |
|
34,222 |
Total stockholders'
equity |
310,509 |
|
363,867 |
Total liabilities and
stockholders' equity |
$ 493,849 |
|
$ 522,186 |
|
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Ancestry.com
Inc. |
Consolidated Statements
of Income |
(in thousands, except
per share data) |
|
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|
Three Months
Ended |
Year
Ended |
|
December 31,
2011 |
December 31,
2010 |
December 31,
2011 |
December 31,
2010 |
Revenues: |
(unaudited) |
(unaudited) |
Subscription revenues |
$ 97,381 |
$ 77,327 |
$ 377,364 |
$ 281,670 |
Product and other revenues |
6,843 |
5,408 |
22,297 |
19,261 |
Total revenues |
104,224 |
82,735 |
399,661 |
300,931 |
Costs of revenues: |
|
|
|
|
Cost of subscription
revenues |
15,002 |
12,413 |
58,292 |
46,409 |
Cost of product and other
revenues |
2,989 |
1,769 |
8,216 |
5,698 |
Total cost of revenues |
17,991 |
14,182 |
66,508 |
52,107 |
Gross profit |
86,233 |
68,553 |
333,153 |
248,824 |
Operating expenses: |
|
|
|
|
Technology and development |
15,562 |
11,849 |
58,245 |
42,296 |
Marketing and advertising |
28,673 |
23,512 |
122,997 |
94,573 |
General and administrative |
10,513 |
10,475 |
39,734 |
35,390 |
Amortization of acquired
intangible assets |
3,840 |
4,810 |
16,711 |
15,959 |
Total operating expenses |
58,588 |
50,646 |
237,687 |
188,218 |
Income from operations |
27,645 |
17,907 |
95,466 |
60,606 |
Interest and other income
(expense), net |
(297) |
(100) |
(1,226) |
(4,258) |
Income before income taxes |
27,348 |
17,807 |
94,240 |
56,348 |
Income tax expense |
(9,032) |
(5,256) |
(31,345) |
(19,503) |
Net income |
$ 18,316 |
$ 12,551 |
$ 62,895 |
$ 36,845 |
|
|
|
|
|
Net income per common share |
|
|
|
|
Basic |
$ 0.42 |
$ 0.28 |
$ 1.41 |
$ 0.85 |
Diluted |
$ 0.40 |
$ 0.25 |
$ 1.29 |
$ 0.76 |
Weighted average common shares
outstanding |
|
|
|
|
Basic |
43,409 |
45,125 |
44,756 |
43,592 |
Diluted |
46,325 |
49,980 |
48,665 |
48,722 |
|
|
|
|
|
Reconciliation of
adjusted EBITDA and free cash flow to net income: |
|
|
|
Net income |
$ 18,316 |
$ 12,551 |
$ 62,895 |
$ 36,845 |
Interest and other expense,
net |
297 |
100 |
1,226 |
4,258 |
Income tax expense |
9,032 |
5,256 |
31,345 |
19,503 |
Depreciation |
3,657 |
3,418 |
13,450 |
11,773 |
Amortization |
6,254 |
6,813 |
25,916 |
23,526 |
Stock-based compensation
expense |
3,107 |
1,528 |
9,975 |
5,069 |
Adjusted EBITDA |
$ 40,663 |
$ 29,666 |
$ 144,807 |
$ 100,974 |
Capitalization of content
databases |
(5,784) |
(5,340) |
(20,408) |
(13,874) |
Purchases of property and
equipment |
(4,904) |
(5,071) |
(13,895) |
(12,968) |
Cash paid for interest |
(133) |
(117) |
(466) |
(2,645) |
Cash paid for income taxes |
-- |
(4,783) |
(3,683) |
(11,128) |
Free cash flow |
$ 29,842 |
$ 14,355 |
$ 106,355 |
$ 60,359 |
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Ancestry.com
Inc. |
Other
Data |
|
|
|
Three Months
Ended |
|
December 31,
2011 |
September 30,
2011 |
June 30, 2011 |
March 31, 2011 |
December 31,
2010 |
Total subscribers |
1,702,563 |
1,701,322 |
1,672,319 |
1,615,169 |
1,394,910 |
Gross subscriber
additions |
219,886 |
273,979 |
321,687 |
424,531 |
202,509 |
Monthly churn |
3.8% |
4.2% |
4.6% |
3.7% |
3.9% |
Subscriber acquisition
cost |
$107.88 |
$93.64 |
$81.23 |
$69.56 |
$96.87 |
Average monthly revenue per
subscriber |
$18.38 |
$18.68 |
$18.88 |
$18.05 |
$17.78 |
CONTACT: Investors:
Ancestry.com Inc.
Deborah Crawford
(801) 705-7942
dcrawford@ancestry.com
Media:
Ancestry.com Inc.
Heather Erickson
(801) 705-7104
herickson@ancestry.com
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