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Angie's List shares drop after revenue miss, quarterly loss

July 22, 2015

Angie's List Inc. on Wednesday reported a loss of $8.3 million for the second quarter, ending its streak of two profitable quarters and sending its shares down about 21 percent in late-morning trading.

The Indianapolis-based consumer-reviews company said it lost 14 cents a share in the three months ended June 30, compared to a loss of 31 cents a share, or $18.4 million, in the same period last year.

The company narrowed its loss in the recent quarter by boosting revenue 11 percent to $87.3 million. Service provider revenue swelled 17 percent over the comparable period last year, to $70.4 million. Expenses barely moved, shrinking about 2 percent to $94.9 million.

The results beat analyst expectations on the bottom line, but fell short on the top line. Analysts expected a loss of 17 cents a share this quarter on $89.4 million in revenue.

In late-morning trading, shares were selling for about $4.78, about 21 percent below the closing price on Tuesday.

The earnings results underscore the 20-year-old company's struggle to tame expenses as it continuously tweaks its business model. Its public earnings reports date back to the fourth quarter of 2010, and over that period the company has seen quarter-over-quarter revenue growth occur for 19 consecutive quarters.

But it's only seen four profitable quarters and never had a profitable year.

In the latest quarter, Angie's slashed marketing spending by about $10 million to $25 million compared to the year-ago period. But those reductions were mostly offset by other expense categories, including technology, as the company shifts to become more of a marketplace for all consumers instead of a members-only reviews platform.

The shift has its challenges. The company recently lowered its "take rate," or commission on service provider transactions, which dragged on revenue, company officials said in an earnings call Wednesday morning. And its Snapfix offering--an on-demand service that collects pictures of member and non-member repair projects for service provider estimates--could be hampering membership growth.

"While pleased with the uptake in Snapfix's submissions," Chief Marketing Officer Angie Hicks said on the earnings call Wednesday, "the success we've achieved attracting new members to Snapfix has some adverse impacts on member acquisition, as consumers who may have otherwise become members first instead participate in Snapfix without membership."

The company is interested in attracting non-members for transactions, but it doesn't plan to abandon its membership model. "The goal is to drive both," Hicks said.

Editor's note: This story was updated at 11:32 a.m.

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