Contributed by: Editor on Sunday, March 15 2009 @ 11:04 am
Last modified on
Spark Networks had a disappointing quarter 4 in 2008. From the press release:
2008 was a mixed year for us. We achieved moderate annual revenue increases in Jewish Networks and Other Affinity Networks, improved Contribution margins to 74%, cut Operating Expenses by 19%, drove annual Adjusted EBITDA to record levels at a 28% margin and returned capital to stockholders by using cash flow to repurchase 21% of the shares outstanding at the start of 2008 ... we are disappointed with second half trends and in particular the fourth quarter, as revenue and subscribers decreased sequentially in each online segment. 2008 revenue, excluding General Markets, was flat while fourth quarter revenue, excluding General Markets, declined 3% sequentially. Jewish Networks was flat in 2008 but saw its third consecutive quarter of declines.
General Markets was Spark Networks flag ship dating site once, Americansingles.com. For over the last year American Singles has lost a large number of members. Spark Networks current flag ship site is JDate, the online Jewish Network.
In Q4 of 2008 revenue decreased 18 percent to $13.2 million, when compared to Q4, 2007. This is a 6 percent decrease when compared to the last quarter. For the full year of 2008 revenue was $57.3 million. In 2007 revenue was $65.2 million which means they saw a decrease of 12 percent. Over all this year Spark Networks had a net income of $4.8 million but saw a small loss in quarter 4 of $164,000. In the same quarter last year income was $6.6 million.
Average paying subscribers for quarter 4 in 2008 was 177,011. Last year the same average was 199,153, which means a 11 percent decrease. For the full year of 2008 the average paying subscriber was 186,957, and was down 12 percent when compared to 2007. JDate owns the bulk of these subscribers for the year 2008 at 90,806. AmericanSingles.com continued to drop in 2008 by 46 percent to 30,486. The rest of the subscriptions belongs to the Other Affinity Networks. An average subscriber is defined by Spark Networks as:
... individuals who have paid a monthly fee for access to communication and website features beyond those provided to our members. Average paying subscribers for each month are calculated as the sum of the paying subscribers at the beginning and end of the month, divided by two. Average paying subscribers for periods longer than one month are calculated as the sum of the average paying subscribers for each month, divided by the number of months in such period.
The press release suggests that the loss of memberships by Americansingles.com is due to decreased marketing spending of 54 percent. I believe this may be part of the reason but this site has been sliding for a while now and I don't think that the marketing budget is the whole story. Spark Networks also seem to not see the boost in sales that other dating companies (like Match.com, eHarmony and Perfectmatch) saw during the recent economic problems. In fact they had the opposite trend.
For the full Q4 release visit Spark Networks News Room[*1] .
Related Story: Spark Networks Third Quarter 2008 Financials