Angie’s List Hits Record Highs After Smaller-Than-Expected Q1 Losses

Andrew Klips |

Angie Hicks, Co-Founder of Angie's ListOnline review website Angie’s List, Inc. (ANGI) reported after Wednesday’s closing bell that it tightened losses in the first quarter and bolstered revenue on a jump in members, although expenses swelled at the same time.

For the quarter, Indianapolis-based Angie’s List said revenues totaled $52.2 million, up 68 percent from $31.1 million in the first quarter of 2012, fueled by a 78 percent rise in service provider revenue to $37.5 million. Service provider revenue includes sales from advertising contracts and fees from e-commerce transactions. Net loss for the first quarter was $7.9 million, or 14 cents per share, compared with a net loss of $13.5 million, or 24 cents a share, in the year prior quarter.

Wall Street was expected the company to report a net loss of 17 cents per share on revenue of $51.54 million.

Total paid memberships as of March 31, 2013 were 1.95 million, up 60 percent from the same time in 2012. On Monday, Angie’s List said that it had crossed the 2 million paid users mark, meaning it had doubled its user base in 18 months.

Marketing cost per paid membership acquisition fell by 12 percent compared to Q1 2012, from $82 to $72. Selling and marketing expenses increased to $19.6 million and $19.7 million, respectively, compared to $12.4 million and $17.6 million in the year earlier quarter.

"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 Bill Oesterle, chief executive at Angie’s List. "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," Oesterle added.

Looking ahead, the company sees second-quarter revenue in the range of $58.5 million to $59.5 million. Marketing expense is expected between $27.8 million and $28.8 million.

Shares of Angie’s List closed down in regular hours on Tuesday by 1.6 percent at $20.11. Even with the down day, shares are still ahead about 68 percent so far in 2013. The losses from the day were erased in extended traded following the earnings report, jumping back up to $21.50, representing a new all-time high for the company since it went public in November 2011.

The improving performance in 2013 has resulted in a series of analyst upgrades, including two this week so far. Stifel Nicolaus has a “buy” rating on ANGI and Tuesday raised their price target from $21 to $28. Needham & Co., who also has a “buy” rating on the company, raised their price target on Tuesday to $24 from $20.

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Companies

Symbol Name Price Change % Volume
BCLI Brainstorm Cell Therapeutics Inc. 2.16 -0.04 -1.82 44,552
ANGI Angie\'s List Inc. 9.17 -0.18 -1.93 299,963

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