Contributed by: ElyseRomano Monday, September 16 2019 @ 10:48 am
America's second largest dating company, Spark Networks SE, has reported its first half 2019 financial results. The company's growing portfolio of premium and freemium dating apps includes EliteSingles, Jdate, Christian Mingle, eDarling, JSwipe, Silversingles and, following an acquisition earlier this year, Zoosk.
For the first half of 2019, Spark Networks reported revenue of €49.2 million, a decrease of 7.1% from €53.0 million in the first half of 2018, and a decrease of 4.5% from €51.5 million in the second half of 2018. The company attributes the decline in revenue to a 9% drop in Average Paying Subscribers year-on-year.
Net Loss was €4.9 million in the first half of 2019. This is an increase of €3.8 million compared to €1.1 million in the first half of 2018, and an increase of €2.9 million compared to €2.0 million in the second half of 2018. Spark Networks attributes the year over year increase in Net Loss to the higher professional fees associated with its $255 million acquisition of Zoosk.
"With the completion of the Zoosk acquisition, 2019 is already the most transformational year in Spark's history," said Jeronimo Folgueira, CEO of Spark Networks. "The Zoosk brand is a great complement to our existing portfolio and we are working hard to execute against our integration plans to achieve our $15 million cost saving target.”
Under the terms of the agreement, Spark Networks acquired 100% of Zoosk's shares with a combination of cash and stock. Spark Networks hopes the merger will help it expand its mass market appeal, grow its presence in the North American dating market, and deliver long-term value for shareholders.
“Beyond Zoosk,” Folgueira continued, “we remain focused on the North American market and on driving annual growth in Adjusted EBITDA. While International Revenue performed below our expectations due to temporary issues with a few marketing partners, I am pleased with our first half 2019 results in North America where we drove annual growth across every key performance indicator – registrations, paying subscribers, Monthly Average Revenue Per User, Revenue and Contribution."
Adjusted EBITDA was €3.8 million in the first half of 2019, an increase of €1.4 million compared to €2.4 million in the first half of 2018, and a reduction of €4.7 million compared to €8.5 million in the second half of 2018. Monthly Average Revenue Per User increased 2.0% to €18.44 in the first half of 2019, compared to €18.07 in the same period of 2018. Spark Networks ended the first half of 2019 with €12.5 million in cash and €11.3 million in debt.
"I am very excited by what the future holds for Spark. We operate in a highly attractive industry and have built a large and cash generating business upon a foundation of strong brands. We now have both a leadership position in the North American market and a clear roadmap in place to capitalize on the assets we own. In the near-term, our roadmap is centered on continuing to right-size the business to secure our profitability goal of delivering over $50 million of Adjusted EBITDA in 2020," Folgueira concluded.