Angie's List results improve, but miss expectations

October 24, 2013

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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