Spark Networks Reports Second Quarter 2022 Results, Continued Subscriber Growth for Zoosk
- Total Paid Subscribers Grew from 831,000 to 838,000 Sequentially
- Zoosk Grew New Subscribers 17% Year Over Year and 7% Sequentially
- Zoosk Grew Organic Traffic 19% Year Over Year
- Strategic Alternatives Review In Progress
Second Quarter 2022 Financial Results
- Revenue was
$48.0 million , compared to$55.3 million in the second quarter of 2021. On a constant currency basis (1), revenue would have been$50 .3 million in the second quarter of 2022. - Net loss was
$8.8 million , compared to$49.0 million in the second quarter of 2021. - Adjusted EBITDA loss(2) was
$1.7 million , compared to Adjusted EBITDA of$8.6 million in the second quarter of 2021.
Please see the table captioned "Reconciliation of Net loss to Adjusted EBITDA" included at the end of this release for a reconciliation of Adjusted EBITDA, which is a non-
Business Highlights
- Total Paid Subscribers: Total paid subscribers grew from 831,000 to 838,000 sequentially in the second quarter.
Zoosk end of period subscribers grew 4% year over year and 5% sequentially in the second quarter. - Zoosk Delivered Improving Growth Metrics:
Zoosk new subscribers grew 17% year over year and 7% sequentially in the second quarter.Zoosk organic traffic grew 19% year over year. - Product and Marketing Improvements: Spark successfully expanded TV and radio ads during the quarter and is adding other channels, including
TikTok . Spark plans to roll out new mobile apps by year-end. - Strategic Review: A robust and active strategic alternatives review process has been underway since
June 2022 .
Financial Outlook
"As we look to the rest of the year, due to a number of factors, the largest of which is the appreciation of the
Investor Conference Call
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A live and archived webcast of the conference call will be accessible on the Investor Relations section of the Company's website at https://investor.spark.net/investor-relations/home. In addition, a phone replay will be available approximately two hours following the end of the call and will remain available for one week. To access the call replay, dial 1-877-481-4010 (US) or +1 919-882-2331 (International) and enter the replay passcode: 46271.
About
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, statements involving known and unknown risks, uncertainties, and other factors that may cause
Any statements in this press release that are not statements of historical fact may be considered to be forward-looking statements. Written words, such as "believes," "hopes," "intends," "estimates," "expects," "projects," "plans," "anticipates," "guides," and variations thereof, or the use of future tense, identify forward-looking statements. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the near future. There are a number of factors that could cause actual results and developments to differ materially, including, but not limited to, the risk that the benefits from the acquisition of
For More Information
Investor contact:
MKR Investor Relations, Inc.
[email protected]
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: constant currency revenue and Adjusted EBITDA. These measures are derived on the basis of methodologies other than in accordance with
1 We provide a constant currency revenue amount to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations. We define non-GAAP constant currency revenue as total revenue excluding the effect of foreign exchange rate movements. Non-GAAP constant currency revenue are calculated by translating current quarter revenues using prior period exchange rates.
2 Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), a non-
- Adjusted EBITDA does not reflect the cash capital expenditures during the measurement period;
- Adjusted EBITDA does not reflect any changes in working capital requirements during the measurement period;
- Adjusted EBITDA does not reflect the cash tax payments during the measurement period; and
- Adjusted EBITDA may be calculated differently by other companies in our industry, thus limiting its value as a comparative measure.
Because of these limitations, Adjusted EBITDA should be considered in addition to other financial performance measures, including net income (loss) and our other
|
||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||
(in thousands) |
||||
|
|
|||
Assets |
||||
Cash and cash equivalents |
$ 11,350 |
$ 16,141 |
||
Accounts receivable, net |
5,584 |
6,261 |
||
|
163,418 |
164,113 |
||
Other assets |
24,313 |
23,286 |
||
Total assets |
$ 204,665 |
$ 209,801 |
||
Liabilities and Shareholders' Equity |
||||
Current portion of long-term debt |
$ 1,182 |
$ 17,593 |
||
Accounts payable |
8,319 |
11,474 |
||
Deferred revenue |
34,877 |
36,973 |
||
Accrued expenses and other current liabilities |
25,690 |
27,042 |
||
Long-term debt, net of current portion |
93,343 |
64,531 |
||
Other liabilities |
18,828 |
19,495 |
||
Total liabilities |
182,239 |
177,108 |
||
Total shareholders' equity |
22,426 |
32,693 |
||
Total liabilities and shareholders' equity |
$ 204,665 |
$ 209,801 |
|
||||||||
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||
(in thousands) |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
2022 |
2021 |
2022 |
2021 |
|||||
Revenue |
$ 48,035 |
$ 55,253 |
$ 97,942 |
$ 111,632 |
||||
Operating costs and expenses: |
||||||||
Cost of revenue, exclusive of depreciation and amortization |
36,356 |
32,881 |
70,602 |
69,799 |
||||
Other operating costs and expenses |
15,097 |
49,308 |
31,135 |
67,749 |
||||
Total operating costs and expenses |
51,453 |
82,189 |
101,737 |
137,548 |
||||
Operating loss |
(3,418) |
(26,936) |
(3,795) |
(25,916) |
||||
Other expense, net |
(5,150) |
(3,220) |
(12,536) |
(8,404) |
||||
Loss before income taxes |
(8,568) |
(30,156) |
(16,331) |
(34,320) |
||||
Income tax (expense) benefit |
(193) |
(18,871) |
99 |
(21,211) |
||||
Net loss |
$ (8,761) |
$ (49,027) |
$ (16,232) |
$ (55,531) |
Reconciliation of Net loss to Adjusted EBITDA (Unaudited): |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
(in thousands) |
2022 |
2021 |
2022 |
2021 |
||||
Net loss |
$ (8,761) |
$ (49,027) |
$ (16,232) |
$ (55,531) |
||||
Interest expense |
2,706 |
3,802 |
9,588 |
7,242 |
||||
Loss (gain) on foreign currency transactions |
2,441 |
(584) |
3,208 |
1,144 |
||||
Income tax expense (benefit) |
193 |
18,871 |
(99) |
21,211 |
||||
Depreciation and amortization |
577 |
2,298 |
1,180 |
4,588 |
||||
Impairment of goodwill and intangible assets |
— |
32,086 |
— |
32,086 |
||||
Stock-based compensation expense |
490 |
580 |
992 |
1,616 |
||||
Other costs(1) |
614 |
615 |
636 |
1,410 |
||||
Adjusted EBITDA |
$ (1,740) |
$ 8,641 |
$ (727) |
$ 13,766 |
(1) Includes primarily consulting and advisory fees related to special projects, as well as non-cash acquisition related expenses, post-merger integration activities and long-term debt transaction and advisory fees. |
|
||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||
(in thousands) |
||||
Six Months Ended |
||||
2022 |
2021 |
|||
Net loss |
$ (16,232) |
$ (55,531) |
||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
||||
Non-cash items and other non-operating charges |
12,536 |
64,183 |
||
Change in operating assets and liabilities |
(6,999) |
(4,023) |
||
Net cash (used in) provided by operating activities |
(10,695) |
4,629 |
||
Capital expenditures |
(1,268) |
(661) |
||
Net cash used in investing activities |
(1,268) |
(661) |
||
Net cash provided by (used in) financing activities |
7,774 |
(13,610) |
||
Effects of exchange rate fluctuations on cash and cash equivalents and restricted cash |
(613) |
(275) |
||
Net decrease in cash and cash equivalents and restricted cash |
(4,802) |
(9,917) |
||
Cash and cash equivalents and restricted cash at beginning of period |
16,279 |
21,117 |
||
Cash and cash equivalents and restricted cash at end of period |
$ 11,477 |
$ 11,200 |
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