- Zoosk's New Subscribers Grew 15% Year Over Year and Zoosk's Key
Female Engagement Metrics Increased 14% Year Over Year in
April 2022
- Company Expects Mid-to-High Single-Digit Revenue Growth for
Full Year 2022
BERLIN, May 9, 2022 /PRNewswire/ -- Spark Networks SE
(NASDAQ: LOV), a leading social dating platform for meaningful
relationships, today reported financial results for its 2022
first quarter ended March 31, 2022.
Eric Eichmann, CEO of Spark
Networks, commented, "In April, Zoosk's new subscribers grew 15%
year over year and key female engagement metrics increased by 14%.
Also, for the quarter, Zoosk's organic traffic increased 65% year
over year. With the right talent in place, the right product
strategy, scalable technology and new financial flexibility, we are
now well-positioned to return to sustainable revenue growth. Spark
is the fourth largest online subscription-based dating company
across North America and
Europe by revenue, and we remain
focused on successfully executing the well-developed roadmap of
strategies and investments we have in place to drive revenue growth
and ultimately shareholder value in 2022 and beyond."
First Quarter 2022 Financial Results
- Revenue was $52.4 million,
compared to $56.4 million in the
first quarter of 2021. On a constant currency basis, revenue would
have been $54.6 million in the first
quarter of 2022, down 3% year over year.
- Net Loss was $5.3 million,
compared to $6.5 million in the first
quarter of 2021.
- Adjusted EBITDA(1) was $3.5
million, compared to $5.1
million in the first quarter of 2021.
Business Highlights and Financial Outlook
- Spark successfully refinanced its debt facility during the
first quarter, to better fund its growth initiatives in 2022 and
beyond.
- For the month of April, following the ramp-up in marketing
spend under the new debt agreement, Zoosk's new subscribers grew
15% year over year.
- Zoosk's female paid subscriptions and positive match responses,
key engagement indicators, both increased 14% year over year in
April.
- Zoosk's turnaround is progressing well as organic traffic
increased 65% year over year in the first quarter.
- Spark expects full-year 2022 revenue to grow mid to high
single-digits year over year.
Please see the table below for a reconciliation of Adjusted
EBITDA, which is a non-U.S. GAAP measure, to U.S.
GAAP.
Financial Outlook
"During the first quarter, we successfully refinanced our
existing debt facility to better fund our growth initiatives," said
David Clark, Chief Financial Officer
of Spark Networks. "Under the new debt facility, we have extended
our maturity dates and improved our covenant flexibility, which
will allow us to increase our investment to grow our business in
2022 and beyond. For full-year 2022, we expect mid-to-high
single-digit total revenue growth year over year."
Investor Conference Call
Spark Networks management will host a conference call and live
webcast for analysts and investors today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss the company's
financial results.
To access the live call, dial 888-349-0106 (US and Canada) or +1 412-902-0131 (International) and
ask to join the Spark Networks' call.
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 it will remain available for one
week. To access the call replay dial 1-877-344-7529 (US) or +1
412-317-0088 (International) and enter the replay passcode:
3630144.
About Spark Networks SE
Spark Networks SE (NASDAQ: LOV) is a leading social dating
platform for meaningful relationships focusing on the 40+
demographic and faith-based affiliations. Spark's widening
portfolio of premium and freemium dating apps include Zoosk,
EliteSingles, SilverSingles, Christian
Mingle, Jdate, and JSwipe, among others. Spark is
headquartered in Berlin, Germany,
with offices in New York and
Utah.
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 Spark Networks'
performance or achievements to be materially different from those
of any expected future results, performance, or achievements. These
statements include, without limitation, statements regarding
leading indicators of revenue growth; statements regarding being
well-positioned to return to sustainable revenue growth; our focus
on successfully executing the well-developed roadmap of strategies
and investments we have in place to drive revenue growth and
ultimately shareholder value in 2022 and beyond; our refinanced
debt facility providing funding for growth initiatives in 2022 and
beyond; Spark's intention with respect to investment in customer
acquisition in 2022; our expectations with respect to financial
outlook for full year 2022 including with respect to revenue; and
our marketing spend plans to drive strong growth in 2023.
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 Zoosk, Inc. may not be fully realized or may take longer to
realize than expected; risks related to the degree of competition
in the markets in which Spark Networks operates; risks related to
the ability of Spark Networks to retain and hire key personnel,
operating results and business generally; the timing and market
acceptance of new products introduced by Spark Networks'
competitors; Spark Networks' ability to identify potential
acquisitions; Spark Networks' ability to comply with new and
evolving regulations relating to data protection and data privacy;
general competition and price measures in the market place; risks
related to the duration and severity of COVID-19 and its impact on
Spark Networks' business; and general economic conditions.
Additional factors that could cause actual results to differ are
discussed under the heading "Risk Factors" in Spark Networks' most
recent Annual Report on Form 10-K and in other sections of Spark
Networks' filings with the Securities and Exchange Commission
("SEC"), and in Spark Networks' other current and periodic reports
filed or furnished from time to time with the SEC. All
forward-looking statements in this press release are made as of the
date hereof, based on information available to the Company as of
the date hereof, and the Company assumes no obligation to update
any forward-looking statement except as required by law.
For More Information
Investor contact:
MKR Investor Relations, Inc.
Todd Kehrli or Joo-Hun Kim
lov@mkr-group.com
1 Adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA"), a non-U.S. GAAP
financial measure, is one of the primary metrics by which we
evaluate the performance of our business, budget, forecast and
compensate management. We believe this measure provides management
and investors with a consistent view, period to period, of the core
earnings generated from the ongoing operations and allows for
greater transparency with respect to key metrics used by senior
leadership in its financial and operational decision-making. We
define Adjusted EBITDA as net earnings (loss) excluding interest
expense, (gain) loss on foreign currency transactions, income tax
(benefit) expense, depreciation and amortization, asset
impairments, stock-based compensation expense, acquisition related
costs and other costs. Adjusted EBITDA has inherent limitations in
evaluating the performance of the Company, including, but not
limited to the following:
- 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 U.S. GAAP results. A
reconciliation of the Adjusted EBITDA for the three months ended
March 31, 2022 and 2021 can be found
in the table below.
Spark Networks
SE
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(in
thousands)
|
|
|
|
|
March 31,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
13,007
|
|
$
16,141
|
Accounts receivable,
net
|
|
5,753
|
|
6,261
|
Goodwill and intangible
assets
|
|
163,782
|
|
164,113
|
Other assets
|
|
23,642
|
|
23,286
|
Total assets
|
|
$
206,184
|
|
$
209,801
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current portion of
long-term debt
|
|
$
—
|
|
$
17,593
|
Accounts
payable
|
|
2,098
|
|
11,474
|
Deferred
revenue
|
|
35,299
|
|
36,973
|
Accrued expenses and
other current liabilities
|
|
26,359
|
|
27,042
|
Long-term debt, net of
current portion
|
|
94,282
|
|
64,531
|
Other
liabilities
|
|
19,191
|
|
19,495
|
Total liabilities
|
|
177,229
|
|
177,108
|
Total shareholders' equity
|
|
28,955
|
|
32,693
|
Total liabilities and shareholders' equity
|
|
$
206,184
|
|
$
209,801
|
Spark Networks
SE
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
(in
thousands)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2022
|
|
2021
|
Revenue
|
|
$
52,374
|
|
$
56,379
|
Operating costs and
expenses:
|
|
|
|
|
Cost of
revenue, exclusive of depreciation and amortization
|
|
34,246
|
|
36,918
|
Other
operating costs and expenses
|
|
16,038
|
|
18,441
|
Total operating costs
and expenses
|
|
50,284
|
|
55,359
|
Operating
income
|
|
2,090
|
|
1,020
|
Other expense,
net
|
|
(7,386)
|
|
(5,184)
|
Loss before income
taxes
|
|
(5,296)
|
|
(4,164)
|
Income tax
expense
|
|
(53)
|
|
(2,340)
|
Net loss
|
|
$
(5,349)
|
|
$
(6,504)
|
|
|
|
Reconciliation of
Net loss to Adjusted EBITDA (Unaudited):
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
(in
thousands)
|
|
2022
|
|
2021
|
Net
loss
|
|
$
(5,349)
|
|
$
(6,504)
|
Interest
expense
|
|
6,882
|
|
3,440
|
Loss on foreign
currency transactions
|
|
767
|
|
1,728
|
Income tax
expense
|
|
53
|
|
2,340
|
Depreciation and
amortization
|
|
603
|
|
2,290
|
Stock-based
compensation expense
|
|
502
|
|
1,036
|
Other
costs(1)
|
|
22
|
|
795
|
Adjusted
EBITDA
|
|
$
3,480
|
|
$
5,125
|
(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.
|
Spark Networks
SE
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(in
thousands)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2022
|
|
2021
|
Net loss
|
|
$
(5,349)
|
|
$
(6,504)
|
Adjustments to
reconcile net loss to cash used in operating activities:
|
|
|
|
|
Non-cash
items and other non-operating charges
|
|
7,576
|
|
7,487
|
Change in
operating assets and liabilities
|
|
(12,702)
|
|
(1,370)
|
Net cash used in
operating activities
|
|
(10,475)
|
|
(387)
|
Capital
expenditures
|
|
(490)
|
|
(423)
|
Net cash used in
investing activities
|
|
(490)
|
|
(423)
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
7,774
|
|
(3,686)
|
Effects of
exchange rate fluctuations on cash and cash equivalents and
restricted cash
|
|
55
|
|
781
|
Net decrease in cash
and cash equivalents and restricted cash
|
|
(3,136)
|
|
(3,715)
|
|
|
|
|
|
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
|
|
$
13,143
|
|
$
17,402
|
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SOURCE Spark Networks SE