Bloomberg News

Angie’s List Soars Most Since IPO as Sales Top Estimates

February 24, 2012

(Updates with analyst’s comment in fourth paragraph)

Feb. 23 (Bloomberg) -- Angie’s List Inc., the consumer- review website with more than a million members, surged after reporting fourth-quarter revenue that topped analysts’ estimates as the cost of acquiring customers declined.

Angie’s List advanced 16 percent to $16.76 at 12:25 p.m. New York time, after earlier surging as much as 22 percent for the biggest intraday jump since the company’s trading debut on Nov. 17. Before today, the shares had gained 11 percent from their initial offering price.

The Indianapolis-based company, which provides reviews of plumbers, electricians and other service providers, said the cost of adding subscribers fell from $60 to $51 per customer during the period, from a year earlier. Total paid memberships were 1.07 million on Dec. 31, up 78 percent, after the company spent more on marketing, Angie’s List said in a statement.

“The cost of member acquisition has dropped dramatically, and especially so in the fourth quarter,” said Sameet Sinha, an analyst with B. Riley & Co. in San Francisco. “They’re seeing some significant efficiencies there and thus can invest more marketing dollars into the business now.”

Sinha, who recommends selling the stock, said those efficiencies may “hit a wall” if it reduces advertising spending going forward, which could affect subscriber growth.

In its first earnings report as a public company, Angie’s List said yesterday that fourth-quarter revenue increased 70 percent to $27.4 million, topping analysts’ estimates of $25.4 million. The company forecast first-quarter revenue of $29 million to $30 million. Analysts had estimated $28.3 million.

The fourth-quarter loss narrowed from a year earlier to $5.87 million, or 14 cents a share, from $8.24 million, or 30 cents. Analysts had estimated a loss of 12 cents, the average of projections in a Bloomberg survey.

--Editors: Niamh Ring, John Lear

-0- Feb/23/2012 17:09 GMT

To contact the reporter on this story: Niamh Ring in New York at nring@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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