Exhibit 99.1


www.angieslist.com

Angie's List Reports Fourth Quarter and Full Year 2014 Results

•
Gross member additions of 206,671 in the fourth quarter of 2014 and 1,242,485 for the full year 2014 with an average cost per acquisition of $27 and $70, respectively

•
Revenue of $82.2 million for the fourth quarter of 2014 and $315.0 million for the full year 2014

•
Adjusted EBITDA of $20.9 million for the fourth quarter of 2014 and $4.2 million for the full year 2014; operating income of $15.9 million for the fourth quarter of 2014 and operating loss of $(10.4) million for the full year 2014

•
Fourth quarter earnings per share of $0.26; full year 2014 net loss per share of $(0.21)


INDIANAPOLIS — February 18, 2015 — Angie’s List, Inc. (NASDAQ: ANGI) announced today financial results for the quarter and year ended December 31, 2014.

“We grew revenue, improved margins and, for the first year in company history, generated positive adjusted EBITDA, all while investing to build our marketplace,” said Angie’s List CEO Bill Oesterle. “In the fourth quarter, we continued to execute on our strategic objectives, including growing our member base and investing in our products. While we made progress transitioning to our marketplace model, we see continued opportunities to propel it forward by improving transaction outcomes for both consumers and service providers."

Key Operating Metrics
Three months ended
 
12/31/14
 
12/31/13
 
Change
Total paid memberships (end of period)
 
3,041,651

 
2,484,059

 
22
 %
Gross paid memberships added (in period)
 
206,671

 
224,702

 
(8
)%
Marketing cost per paid membership acquisition (in period)
 
$
27

 
$
52

 
(48
)%
First-year membership renewal rate (in period)
 
70
%
 
71
%
 
(1.0) pts
Average membership renewal rate (in period)
 
74
%
 
75
%
 
(1.0) pts
Participating service providers (end of period)
 
51,614

 
46,329

 
11
 %
Total service provider contract value (end of period, in thousands)
 
$
249,045

 
$
194,137

 
28
 %
Twelve months ended
 
12/31/14
 
12/31/13
 
Change
Gross paid memberships added (in period)
 
1,242,485

 
1,218,258

 
2
 %
Marketing cost per paid membership acquisition (in period)
 
$
70

 
$
72

 
(3
)%
First-year membership renewal rate (in period)
 
73
%
 
74
%
 
(1.0) pts
Average membership renewal rate (in period)
 
77
%
 
78
%
 
(1.0) pts

1


Market Cohort Analysis
“We surpassed three million members in the fourth quarter, marking a major milestone and underscoring the value of our services to consumers,” continued Oesterle. “Membership continued to grow meaningfully across every cohort.”
Cohort
 
# of
Markets
 
Average
Revenue/
Market
 
Membership
Revenue/Paid
Membership
 
Service
Provider
Revenue/Paid
Membership
 
Average
Marketing
Expense/
Market  
 
Total Paid
Memberships
 
Estimated
Penetration
Rate*
 
Annual
Membership
Growth
Rate
 Pre-2003
 
10

 
$
7,485,052

 
$
32.81

 
$
110.14

 
$
1,327,562

 
576,980

 
15.6
%
 
23
%
 2003-2007
 
35

 
5,653,860

 
29.41

 
102.16

 
1,388,742

 
1,657,882

 
12.3
%
 
23
%
 2008-2010
 
103

 
363,118

 
16.47

 
43.09

 
191,065

 
681,796

 
12.5
%
 
19
%
 Post 2010
 
105

 
44,578

 
12.70

 
30.91

 
55,472

 
124,993

 
7.7
%
 
39
%
Total
 
253

 
 
 
 
 
 
 
 
 
3,041,651

 
 
 
 
Cohort table presents financial and operational data for the twelve months ended December 31, 2014.

* Demographic information used in penetration rate calculations is based on a third-party study we commissioned in December 2014. According to the study, the number of U.S. households in our target demographic was 27 million.

Fourth Quarter Results
Total revenue for the fourth quarter of 2014 was $82.2 million, an increase of 19 percent compared to the prior year period. Membership revenue in the fourth quarter of 2014 was $18.0 million, an increase of 2 percent compared to the prior year period. Service provider revenue remains the largest and fastest growing component of total revenue at $64.1 million for the quarter, representing a 26 percent growth rate year over year. Service provider revenue includes revenue from advertising contracts and fees from e-commerce transactions. Advertising revenue was $58.1 million in the fourth quarter of 2014, an increase of 29 percent compared to the year-ago period, and e-commerce revenue was $6.1 million, an increase of approximately 1 percent year over year.
Marketing expense decreased 53 percent, or $6.1 million, compared to the year-ago period. Net income for the fourth quarter was $15.3 million, with selling expense of $28.7 million and marketing expense of $5.5 million, compared to net income of $2.8 million, with selling expense of $24.6 million and marketing expense of $11.6 million, in the year-ago period. Adjusted EBITDA, a non-GAAP financial measure, was $20.9 million for the fourth quarter as compared to $9.9 million for the same period in the year-ago period. Adjusted EBITDA in the fourth quarter of 2014 includes an adjustment for a one-time, non-cash long-lived asset impairment charge of $1.8 million related to the abandonment of certain capitalized website and software development assets.

Full Year 2014 Results
Full year 2014 revenue was $315.0 million, an increase of $69.4 million, or 28 percent, from $245.6 million in the prior year. Membership revenue for the full year was $73.1 million, representing a year over year increase of 12 percent, while service provider revenue increased $61.6 million, or 34 percent, to $241.9 million for the current year as compared to $180.3 million in 2013.

Marketing expense was approximately $87.4 million in both 2013 and 2014, while total gross paid memberships added increased to 1,242,485 in 2014 from 1,218,258 in 2013, resulting in a decrease in cost per acquisition to $70 for 2014 from $72 in 2013.

Net loss was $12.1 million for the full year 2014, with selling expense of $117.2 million and marketing expense of $87.4 million, compared to a net loss of $33.0 million, with selling expense of $90.1 million and marketing expense of $87.5 million, in the prior year.

Adjusted EBITDA, a non-GAAP financial measure, was $4.2 million for the full year 2014, compared to an adjusted EBITDA loss of $18.9 million in 2013.

At December 31, 2014, the balance of cash, cash equivalents and short-term investments was $64.3 million.

Business Outlook
The Company’s financial and operating expectations for the full year 2015 are as follows:
•
Revenue of $357 million to $363 million
•
Adjusted EBITDA of $28 million to $30 million

2


Angie’s List, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
 
 
 
December 31,
2014
 
December 31,
2013
 
 
(Unaudited)
 
(Unaudited)
Assets
 
 
 
 
Cash and cash equivalents
 
$
39,991

 
$
34,803

Short-term investments
 
24,268

 
21,055

Accounts receivable, net
 
15,141

 
12,385

Prepaid expenses and other current assets
 
18,120

 
13,701

Total current assets
 
97,520

 
81,944

Property, equipment and software, net
 
51,264

 
18,657

Goodwill
 
1,145

 
1,145

Amortizable intangible assets, net
 
2,755

 
3,500

Other assets, noncurrent
 
1,854

 
397

Total assets
 
$
154,538

 
$
105,643

 
 
 
 
 
Liabilities and stockholders’ deficit
 
 
 
 
Accounts payable
 
$
5,490

 
$
6,838

Accrued liabilities
 
23,189

 
21,770

Deferred membership revenue
 
33,767

 
35,560

Deferred advertising revenue
 
48,399

 
39,448

Total current liabilities
 
110,845

 
103,616

Long-term debt, net
 
58,854

 
14,918

Deferred membership revenue, noncurrent
 
4,744

 
4,909

Deferred advertising revenue, noncurrent
 
669

 
521

Other liabilities, noncurrent
 
1,600

 
169

Total liabilities
 
176,712

 
124,133

Stockholders’ deficit:
 
 
 
 
Common stock
 
67

 
67

Additional paid-in-capital
 
265,895

 
257,505

Treasury stock
 
(23,719
)
 
(23,719
)
Accumulated deficit
 
(264,417
)
 
(252,343
)
Total stockholders’ deficit
 
(22,174
)
 
(18,490
)
Total liabilities and stockholders’ deficit
 
$
154,538

 
$
105,643



3


Angie’s List, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
 
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
 
2014
 
2013
 
2014
 
2013
 
 
(Unaudited)
 
(Unaudited)
Revenue
 
 
 
 
 
 
 
 
Membership
 
$
18,018

 
$
17,709

 
$
73,113

 
$
65,307

Service provider
 
64,134

 
51,047

 
241,898

 
180,335

Total revenue
 
82,152

 
68,756

 
315,011

 
245,642

Operating expenses
 
 
 
 
 
 
 
 
Operations and support
 
13,347

 
10,654

 
52,760

 
40,072

Selling
 
28,698

 
24,561

 
117,176

 
90,143

Marketing
 
5,477

 
11,613

 
87,386

 
87,483

Product and technology
 
9,796

 
7,506

 
34,039

 
27,570

General and administrative
 
8,932

 
11,151

 
34,012

 
31,455

Total operating expenses
 
66,250


65,485


325,373


276,723

Operating income (loss)
 
15,902

 
3,271

 
(10,362
)
 
(31,081
)
Interest expense, net
 
624

 
473

 
1,203

 
1,868

Loss on debt extinguishment
 
—

 
—

 
458

 
—

Income (loss) before income taxes
 
15,278

 
2,798

 
(12,023
)
 
(32,949
)
Income tax expense (benefit)
 
6

 
(5
)
 
51

 
40

Net income (loss)
 
$
15,272

 
$
2,803

 
$
(12,074
)
 
$
(32,989
)
 
 
 
 
 
 
 
 
 
Net income (loss) per common share — basic
 
$
0.26

 
$
0.05

 
$
(0.21
)
 
$
(0.57
)
Net income (loss) per common share — diluted
 
$
0.26

 
$
0.05

 
$
(0.21
)
 
$
(0.57
)
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding — basic
 
58,517

 
58,429

 
58,510

 
58,231

Weighted average common shares outstanding — diluted
 
58,517

 
58,893

 
58,510

 
58,231

 
 
 
 
 
 
 
 
 
Non-cash stock-based compensation
 
 
 
 
 
 
 
 
Operations and support
 
$
20

 
$
12

 
$
65

 
$
64

Selling
 
105

 
46

 
397

 
147

Product and technology
 
18

 
182

 
856

 
136

General and administrative
 
1,801

 
1,158

 
6,571

 
3,717

Total non-cash stock-based compensation
 
$
1,944

 
$
1,398


$
7,889


$
4,064

 
 
 
 
 
 
 
 
 
Reconciliation of net income (loss) to adjusted EBITDA (loss) (unaudited):
 
 
 
 
 
 
 
 
Net income (loss)
 
$
15,272

 
$
2,803


$
(12,074
)

$
(32,989
)
   Income tax expense (benefit)
 
6

 
(5
)

51


40

   Interest expense, net
 
624

 
473


1,203


1,868

   Depreciation and amortization
 
1,558

 
1,195

 
5,576

 
4,069

   Non-cash stock-based compensation
 
1,944

 
1,398

 
7,889

 
4,064

   Loss on debt extinguishment
 
—

 
—

 
458

 
—

   Litigation settlement adjustment
 
(252
)
 
4,000

 
(702
)
 
4,000

   Non-cash long-lived asset impairment charge
 
1,778

 
—

 
1,778

 
—

Adjusted EBITDA (loss)
 
$
20,930


$
9,864


$
4,179


$
(18,948
)


4


Angie’s List, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
 
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
 
2014
 
2013
 
2014
 
2013
 
 
(Unaudited)
 
(Unaudited)
Operating activities
 
 
 
 
 
 
 
 
Net income (loss)
 
$
15,272

 
$
2,803

 
$
(12,074
)
 
$
(32,989
)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
 
 
 
 

 
 
 
 

Depreciation and amortization
 
1,558

 
1,195

 
5,576

 
4,069

Non-cash long-lived asset impairment charge
 
1,778

 
—

 
1,778

 
—

Deferred income taxes
 
11

 
6

 
11

 
6

Amortization of debt discount, deferred financing fees and bond premium
 
177

 
107

 
478

 
527

Non-cash loss on debt extinguishment
 
—

 
—

 
266

 
—

Non-cash stock-based compensation expense
 
1,944

 
1,398

 
7,889

 
4,064

Changes in certain assets:
 
 
 
 

 
 
 
 

Accounts receivable
 
(891
)
 
(1,749
)
 
(2,756
)
 
(4,598
)
Prepaid expenses and other current assets
 
126

 
1,349

 
(4,419
)
 
6,159

Changes in certain liabilities:
 
 
 
 

 
 
 
 

Accounts payable
 
(10,498
)
 
2,024

 
(2,952
)
 
(1,151
)
Accrued liabilities
 
(8,962
)
 
(13,711
)
 
3,691

 
7,712

Deferred advertising revenue
 
825

 
4,018

 
9,099

 
16,595

Deferred membership revenue
 
(4,661
)
 
(1,982
)
 
(1,958
)
 
8,512

Net cash (used in) provided by operating activities
 
(3,321
)
 
(4,542
)
 
4,629

 
8,906

 
 
 
 
 
 
 
 
 
Investing activities
 
 
 
 
 
 
 
 
Purchases of investments
 
(13,507
)
 
(5,242
)
 
(26,671
)
 
(32,814
)
Sales of investments
 
5,960

 
5,123

 
23,360

 
21,978

Acquisition of business assets
 
—

 
—

 
—

 
(2,150
)
Property, equipment and software
 
(3,831
)
 
(1,417
)
 
(16,735
)
 
(7,102
)
Capitalized website and software development costs
 
(7,337
)
 
(1,000
)
 
(20,122
)
 
(1,000
)
Intangible assets
 
(143
)
 
(68
)
 
(984
)
 
(769
)
Net cash used in investing activities
 
(18,858
)
 
(2,604
)
 
(41,152
)
 
(21,857
)
 
 
 
 
 
 
 
 
 
Financing activities
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
 
—

 
340

 
501

 
5,116

Principal payments on long-term debt
 
—

 
—

 
(15,000
)
 
—

Proceeds from long-term debt issuance
 
—

 
—

 
60,000

 
—

Fees paid to lender
 
—

 
—

 
(1,210
)
 
—

Cash paid for financing fees
 
(78
)
 
—

 
(1,957
)
 
—

Payment of contingent consideration from acquisition of assets
 
—

 
—

 
(500
)
 
—

Payments on capital lease obligations
 
(71
)
 
—

 
(123
)
 
—

Net cash (used in) provided by financing activities
 
(149
)
 
340

 
41,711

 
5,116

Net (decrease) increase in cash and cash equivalents
 
$
(22,328
)
 
$
(6,806
)
 
$
5,188

 
$
(7,835
)
Cash and cash equivalents, beginning of period
 
62,319

 
41,609

 
34,803

 
42,638

Cash and cash equivalents, end of period
 
$
39,991

 
$
34,803

 
$
39,991

 
$
34,803


5


Conference Call Information
The Company will host a conference call on February 18, 2015 at approximately 8:30 AM (ET) / 5:30 AM (PT) to discuss the quarterly financial results with the investment community. A live audio webcast of the event will be available on the Angie’s List Investor Relations website at http://investor.angieslist.com/.
A live domestic dial-in is available at (877) 380-5664 or (253) 237-1143 internationally. An audio replay will be available at (855) 859-2056 domestically or (404) 537-3406 internationally, using Conference ID 75743086 through February 24, 2015.

About Angie’s List
Angie’s List helps facilitate happy transactions between more than three million consumers nationwide and its collection of highly-rated service providers in 720 categories of service, ranging from home improvement to health care. Built on a foundation of authentic reviews of local service, Angie's List connects consumers directly to its online marketplace of services from member-reviewed providers, and offers unique tools and support designed to improve the local service experience for both consumers and service professionals.

Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), Angie’s List has disclosed in this press release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP Adjusted EBITDA, which Angie’s List defines as earnings before interest, income taxes, depreciation, amortization, non-cash stock-based compensation, the loss on debt extinguishment, the litigation settlement adjustment and the non-cash long-lived asset impairment charge. Angie’s List uses Adjusted EBITDA internally in analyzing its financial results and has determined to disclose this measure to investors because it believes it will be useful to them, as a supplement to GAAP measures, in evaluating Angie’s List’s operating performance relative to its industry sector and competitors. Angie’s List believes that the use of Adjusted EBITDA provides additional insight for investors to use in evaluation of ongoing operating results and trends. However, non-GAAP financial measures such as Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Angie’s List has significant uses of cash flows, including capital expenditures and other contractual commitments, interest payments and income taxes that are not reflected in adjusted EBITDA. Adjusted EBITDA does not consider the potentially dilutive impact of issuing non-cash stock-based compensation to Angie’s List’s management and other employees. It should also be noted that other companies, including companies in the same industry, may calculate Adjusted EBITDA in a different manner than Angie’s List. Angie’s List has provided a reconciliation of the Adjusted EBITDA measure to the most directly comparable GAAP financial measure.

Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected revenue, future marketing expense and growth opportunities. These forward-looking statements are based on Angie’s List’s current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to accurately measure and predict revenue per paid membership, membership acquisition costs or costs associated with servicing our members; our ability to protect our brand and maintain our reputation among consumers and local service providers; our ability to attract and retain local service providers to advertise on our service; our ability to increase our pricing on memberships and service provider contracts as we increase our market penetration; our ability to replicate our business model in our less penetrated markets; our success in converting consumers and local service providers into paid memberships and participating service providers; competitive factors; our ability to stay abreast of modified or new laws and regulations applying to our business, including those regarding sales or transaction taxes and privacy regulation; our ability to adequately protect our intellectual property; our ability to manage our growth; and general economic conditions worldwide.
Further information on these factors and other risks that may affect our business is included in filings we make with the Securities and Exchange Commission from time to time, including Angie’s List’s Annual Report on Form 10-K and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
These documents are or will be available online from the SEC or on the SEC Filings section of the Investor Relations section of our website at http://investor.angieslist.com. Information on our website is not part of this release. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.
Contact:
Investor Relations:
Public Relations:
 
 
 
Leslie Arena
Debra DeCourcy, APR
 
 
 
317-808-4527
317-396-9134
 
 
 
lesliea@angieslist.com
debra.decourcy@angieslist.com
 
 
 

6