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Angie's List results improve, but miss expectations

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Angie's List Inc. on Wednesday said it suffered a smaller loss in the third quarter, but the online business-rating service's results and outlook fell short of Wall Street expectations.

Shares of the Indianapolis-based company fell 72 cents, or 4.7 percent, to $14.73 each in aftermarket trading after closing at $15.45 Wednesday. It rebounded to $15.05 in early trading on Thursday. The stock has gained 25 percent this year, but is off 43 percent in the past three months.

Angie's List lost $13.5 million  or 23 cents a share, in the third quarter, compared with a loss of $18.5 million, or 32 cents per share, in the same quarter last year. Revenue rose 56 percent, to $65.5 million.

Analysts polled by FactSet had predicted a loss of 20 cents per share on sales of $66.1 million.
 
The number of paid memberships as of Sept. 30 was 2.4 million, compared with 1.7 million a year ago, a rise of 44 percent.
 
"We added a record number of new members while making significant investments in the business," said CEO Bill Oesterle in a prepared statement.
 
But the first-year member-renewal rate fell 1 percent, to 75 percent. And operating costs also rose 31 percent, to $78.5 million, on higher expenses.

The company has been gaining a greater percentage of its revenue in recent years in the form of advertisements from contractors/service providers. The contract value of that business rose 53 percent from the same time last year, to $181.9 million.

Angie's List expects revenue of $68 million to $69 million in the current quarter. Analysts were looking for higher revenue projections of $70.4 million.

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  • Business Model
    Angie's List has a horribly outdated business model. That's why it's never made money and never will make money. It's being propped up by investor money, money from investors who apparently can't read financials.
  • business models???
    Angie's List has more of a business model then Pintrest, tumblr, twitter and Facebook combined, lol. Angie's List just does NOT have what all those other firms have — a "signature" tool/software architecture that people NEED. - http://goo.gl/7RQ4tP -
  • BE DISRUPTIVE Already!?!?!
    Angie's List just needs to ADD VALUE. Be aggressive and disruptively innovative. If Angie's List is going to do this they need to hire people ARE disruptively innovative. Google, Microsoft and Yahoo! have basically "absconded" local at this point. IF Angie's List gets its act together then they can dominate local. Provide TOOLS, not just user content! Angie's List just needs to get someone (VP) who is NOT "group think" or "non-Hoosier" or "typical" and bring in someone who can "add value' in a way that their competition isn't. Not hard. Read more... - http://goo.gl/7RQ4tP -
  • Saw This Coming
    I'm sad that this is happening to a local company, but it was very easy to see coming... Their business model is not very good. It made sense on a small scale; have a private review site that all members have to pay a fee to make sure they're legitimate and to pay the cost to run the site. But because of greed and all that, they decided they needed to be a large publicly traded company so now they need to milk this sucker for all it's worth. This has meant getting the service providers to advertise on their website. Now, more of their income comes form service providers than members. That pretty much defeats the whole purpose of their initial goal. Their member count is much lower than Yelp, and their valuation spiked for no reason at all...

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