Spark Networks First Quarter 2009 Financials

From the Spark Networks quarter 1, 2009 financial results, it shows the dating networks revenue has declined 20 percent to $12 million, with $300 thousand in net profit. In Q1, 2008 revenue was $15 million, with a net profit of $1.6 million. Quarter 4 in 2008 saw $13.2 in revenue. Adam Berger, Chief Executive Officer of Spark Networks, Inc. stated that revenue is down due to the turn in the economy and the lower than expected total average paying subscriber.

We are in the middle of an investment cycle which began about a year ago to re-balance our portfolio and reduce our dependence upon one brand. As part of this re-balancing we chose to stop investing in the General Markets segment as we were poorly positioned to compete against much larger competitors, new subscriber unit economics were unfavorable, and its decline has dragged Revenue and Contribution down. Our investment has been in enhancing Jewish Networks, building Other Affinity Networks and developing new systems to allow us to reduce the cost of running our business over the longer term. Unfortunately, we hit some economic headwinds in the middle of our investment cycle. This adversely affected our most profitable segment and cost cutting efforts did not outpace the loss of contribution from Jewish Networks.

Spark Networks dating sites as a whole had 168,004 paid subscribers. This is a 13 percent decrease from the same quarter last year (192,652) and a 5 percent decrease from the prior quarter.

Surprisingly, Sparks strongest dating sites, the Jewish Networks suffered a 13 percent decrease in revenue to $7.6 million for quarter 1, 2009 when compared to 2008. Average paying subscribers for the same timeline was down 9 percent to 84,644. General Market Networks continued to bleed subscribers and was down 52 percent to 17,810, with revenue falling similarly 64 percent to $940 thousand. Their only network which saw improvement, subscriber wise, was the Other Affinity Networks (mainly the MingleMatch dating sites) They saw subscribers jump 7 percent to 64,393. Unfortunately revenue was down by 2 percent to $3.3 million.

No mention was made of the newly purchased dating site called Engage (see Story). This website must be lumped in with either General Market Networks, or more likely the Other Affinity Networks of dating sites.

For the full 2009 Q1 release visit Spark Networks News Room.

Related Story: Spark Networks Fourth Quarter and Year 2008 Financials