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Angie's List shares plunge after wider quarterly loss

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Angie's List Inc. saw revenue soar 74 percent in the second quarter, but the Indianapolis-based contractor-ratings service continued to see growing losses as the result of higher marketing expenses.

The company's stock fell 10.2 percent, or $1.48, in Thursday trading, to close at $13.07 per share.

The company lost $23.4 million in the quarter ended June 30, compared with a loss of $16.2 million in the same period a year ago, it said Wednesday afternoon.

Quarterly revenue rose from $21 million last year to $36.5 million this year. Revenue from service providers rose 94 percent, to $25 million.

On a per-share basis, the loss dropped to 41 cents, from 60 cents, as the number of shares outstanding grew. Analysts were expecting a loss of 39 cents a share.

The provider of consumer reviews on businesses has not turned a profit since it was founded 17 years ago, but some analysts project the company could turn a profit in one to two years as its market presence in key cities matures and the cost of marketing to gain new members decreases.

Marketing expenses in the latest quarter, however, rose  52 percent over the prior-year period, to $27.6 million.

Total paid memberships were up 74 percent on a year-over-year basis, to $1.43 million.

"Looking ahead, we will continue to invest in acquiring new members, adding advertising service providers and improving our technology to drive further scale and penetration," Angie's List Chief Financial Officer Bob Millard said in a prepared statement.

Angie's List's earnings announcement came after markets closed Wednesday. The company's stock rose 3.6 percent Wednesday, or 51 cents, to close at $14.55 per share.

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  • Info
    People need to look at who actually owns the Company. Insiders and institutional investors make up a significant portion of the owners. It is shocking that so called experts are continuing to hype this stock, saying it will eventually turn a profit. The only way this company has had significant revenue growth is because of the MASSIVE amount of advertising spend that has occurred. In 16 years, the company had never been able to demonstrate that once it quits spending ad money that it can sustain revenue growth, even here in Indy, one of its most mature markets. It is a shame that the CEO and CMO have been able to make so much money by selling off right after it turned public...
  • To Missi
    Well Missi, you are right. I can place ads on Angie's List, and if I pay a higher fee, I can make sure that my company's name and ad banner appear higher on the search list. Angie's List reports that most people never search past the first page of business and service listings, so it pays to spend a little more and get my listing on that first page. So, companies can pay to be on Angie's List, which sounds to me like "Consumer Fraud" but there are people who can possibly answer my initial question, which was "How can Angie claim that companies cannot pay to be on Angie's List?" when in fact, companies can pay and be listed on Angie's List.
  • Another farce
    This company is nothing but a joke. Continued losses and mismanagement. Never would I invest in a company that has never turned a profit from day one. Throw your money in and unfortunately u ultimately will lose it. Wont last 2 more years.
  • Questions for Missi
    I find your comment very interesting. Angie herself states in television ads "You cannot pay to be on Angie's List", so it appears that Angie is guilty of false advertising on the part of Angie's List as suggested by your comment. You have peeked my interest for more research on this company. Thanks Missi
  • Angie's List is a SCAM
    I have a small business here in Indianapolis, the first year I advertised with Angie's List, I was charged $8000.00 then when my annual contract came due they wanted to charge me $33,000.00 for the same amount of advertising for my second year. Angie's List is nothing more then a Money Machine for Angie!!!
    • Can you trust the reviews
      I agree with you Natacha, on trusting the reviews but with a different twist. I am a very experienced tradesman who moved to the Indy area. Work for other contractors is much easier to gain than it is to get work for my fledgling company. Although I have 30 years of good references from out of town...The Angies list doesn't paint the true picture of the workers entering your house, or the ethics of the owner of the company they represent. I've had to work side by side with drunks, drug addicts, felons and general neer do wells that I wouldn't let clean my doghouse let alone perform a service in my home...Yet because the reviews, the customer doesn't really know who is entering their home. I will be in Indy for a long time and I will start naming names as soon as I feel comfortable that my own work will be well received and my phone starts ringing more with opportunity.
    • Can You Trust the Reviews?
      I agree that the business model for Angie's List is shaky. Con artists are often very personable, so they can charm you and you don't know they did a poor job until much later and even then it could be defective materials, so you can't really be sure you were scammed. Lay persons really don't know whether a dentist or other professional did a good job or not, and often things are more complex than people understand. Also, the expectations of some consumers are not realistic, so I disagree with the tag line "reviews you can trust", because there are too many variables.
      • Great review
        Go here for a great overall picture http://seekingalpha.com/article/713351-angie-s-list-and-merrill-lynch-partying-together-like-it-s-1999-why-it-won-t-end-differently-this-time
      • Bloated Marketing Department
        No profit? Where's the money going? I know they have a bloated marketing department, but someone must be getting paid. I imagine it isn't the young college age kids they hire. Plus, why is their web site so sloooow? If that is your ONE offering to people, you would think you would invest in the best servers and developers possible.
      • Impressed
        Impressed by 74% revenue growth and will be interested to see if the company can continue to grow its top line at that kind of rate.
      • Pathetic
        No profit in 17 years????? Ponzi Ponzi Ponzi
      • Dog with Fleas
        Investment strategy: short ANGI. Company seems to exist to pay execs million $ salaries and pay for real estate owned by insiders.
      • Questionable Business Model
        Sorry, but this company's business model has never made sense to me, and the need to pour money into advertising continues to sound more like a company in search of acquisition. Sorry Angie, I cannot think of a suitor company that needs your services in their portfolio.

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