All the indicators are going in the right direction as modern-day yellow pages Angie’s List, which helps people find trustworthy carpenters, dentists, mechanics, and more, reported its first quarter results today.
Revenues were up 68 percent to $52.2 million, paid memberships were up 60 percent year-over-year — hitting two million just two days ago — and its cost-per-acquisition was down 12 percent. Even total revenue per average paid member (consumers pay a subscription fee to belong to Angie’s List) was up.
The only negative number — a net loss of $7.9 million — was also up, from $13.5 million in Q1 2012. That loss is due to heavy marketing costs as Angie’s List continues to pursue quick growth.
“Our business grew very well in the first quarter, achieving new records for membership, service provider revenue and total revenue, due to continued strong and consistent operating metrics,” Angie’s List CEO Bill Oesterle said in a statement.
While subscriber revenue was up 47 percent to $14.6 million, Angie’s List makes most of its money from service providers — the plumbers and roofers doing the work, who pay to advertise on the site and pay fees when consumers purchase their services on Angie’s List.
That revenue was up as well, increasing 78 percent to $37.5 million.
Consumers must be happy with the service, as the average first-year membership renewal rate is 73 percent, the same as a year ago, and the average overall membership renewal rate is slightly higher, at 75 percent. That does, mean, however, that Angie’s List needs to grow its 2,000,000 members by 500,000 in 2013 just to grow by 25 percent, and marketing costs that the company anticipates reflect that.
For the second quarter, the company expects revenue of $58.5 million to $59.5 million, with marketing expenses of $27.8 to $28.8 million. At the company’s current customer acquisition cost of $72, that would translate to almost 400,000 new users in the second quarter alone.
“We will continue to invest in acquiring new members, adding advertising service providers and innovating products to drive further scale and penetration, while maintaining secure levels of liquidity,” the company’s interim CFO, Chuck Hundt said.
That will probably translate into another net lost next quarter, but the company is approaching profitability within perhaps just a few more quarters.
As mentioned above, the service just passed two million members on April 22. At the time, Angie Hicks, who co-founded the site with current CEO Oesterle, said that the company’s growth was accelerating exponentially:
“It took us more than 16 years to get to one million paid households but just 18 months to double it.”
Investors have driven the stock, which debuted at $13, from around $10 to the $20 level in the past three months.