LOV - Earnings call transcript Q2 2021

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Operator

Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Spark Networks' Conference Call to provide the company's Financial Results for the Second Quarter 2021. This call is being recorded.

We are broadcasting live in listen-only mode. I would now like to turn the conference over to Chris Camarra, VP of Investor Relations. Mr. your begin may you conference. Camarra,

Chris Camarra

and Thank us everyone, joining you, afternoon. you, operator, this for thank

Joining call on Clark. me this CFO, Eichmann; David and are CEO, Eric

a are to Relations on section caution or quarter our company's that comments information results our can As regarding fact made www.spark.net. you this found listening of we I'd today subject that at are results, projections statements events could or uncertainties We forward-looking any like contain results materially be or Investor to such projections. or may financial to future everyone which second statements our in on website today actual and reminder, remind call that XXXX predictions differ published events. risks that our from cause

actual and results may be uncertainties, factors or materially these filings cause company's SEC. the could that with forward-looking events from risks, the found statements differ to Additional in

management This that Eric, the call of session section Mr. remarks, I playback to question-and-answer on our will Investor a being prepared turn now Networks. will CEO be said, for Eric over will please With website. is Spark our go and of ahead. call Eichmann, Following available conduct participants. being Relations interested the with recorded

Eric Eichmann

you Spark for conference on Thank XXXX you, Chris. And thank second Networks all quarter joining us call today.

platform of social Mingle, As We operate Christian to portfolio a is reminder, SilverSingles, strong for five the brands, meaningful relationships. dating largest ambition Jdate. the leading become and a being and EliteSingles, Spark own Zoosk,

more scaled companies. we XXX,XXX register year. at of with than estimate the to quarter, in $X.X online religious have XX Match demographic paying the we segment, million X Bumble and we are is users Along revenue in X% subscribers properties. one space and a billion the focus market Group, our around on per plus primary dating and ParshipMeet, more growing Our be than Every four and

our U.S. growing in and revenue percent many most is Canada, countries, is in business. XX And have U.S., of our U.K., Australia based plus the focus France. we presence While our of

He further, of going week, new call first with brings I more than our of this market video XX welcome of CFO Group, now most a officially us call. serving dating Meet Spark last interactive us as live is Financial any David experiences leading to a of who earnings Before his public experience Officer, would is Group, provider on years joined ParshipMeet notably the and subsidiary our streaming and today. Clark, like David solutions. Chief

Kaba a driving helped core Joseph to company. from building risk Whitters technology, our extensive Mr. instacart users and active experience Notably, recently Bangaly expertise Kaba built monthly These Whitters and and growth mobile as on has billion years markets and market media. public to grow of investors. product XXX We in growth products, bring digital Directors. through than finance, to Mr. value Mr. Board members in social also accounting, accelerating serve Kaba Instagram in of expertise experience has product governance, XX appointed of and shareholder Board the new more management, for public design head million relevant and functionality. consumer

$X.X for $XX.X second of XXXX decrease million quarter QX a XXXX. the million, to the quarter revenue to now of second of $XX.X Turning results, was compared in million

year-over-year. in X% Christian of Adjusted million compared EBITDA was risk. second average legacy the XXXX. to in and quarter the the of a Mingle subscribers revenue by $X.X driven was Our collectively decrease four in specifically in XXXX, the the to quarter million largest decrease million of EliteSingles, by paying The $X.X $XX.X second XX% Jdate overall Spark grew number brands SilverSingles, decrease of attributable

in the or or XXXX healthy asset average and second user growth by Turning XXXX Elite, XXXX the Overall monthly decline XX,XXX our XXX,XXX $XX.XX in of compared subscribers of average paying XXXX. the Jdate in $XX.XX Spark's to monthly increased Spark X% or indicators. period quarter our key seeing per of to revenue Mingle decreased second performance same to to in ARPU Silver, compared XXX,XXX quarter and Christian Zoosk to in core are same a in we revenue. the of period

higher assets, our in improvements matching growth in older seeing or to For good core the Spark's are properties engagement thanks we in religious demographic algorithms. and

have The bit to turn initiatives. single-digit, while controls delay QX. required and more pandemic we aggressively expected below led tighten us high Zoosk, We its the monitor XX% engagement in the in controls, fraud rise access, in to product to and which QX Zoosk, revenue lower to decline overall and metrics time. on was mostly than are cyberattacks improve performance is stricter This improve For them believe and a access filters expectations. over since to reduced our line fraud due continuously top expect it we path the to in its right around, from in and

In addition, expected Zoosk. revenue yielding initiatives while are they primarily slightly were product on delayed our results,

good Zoosk, fraud sales them tax product and solutions EliteSingles are on improve in started new pricing. QX. seeing increases and on all and platforms optimized and progress to enhancements security, We rolled deployed on hCaptcha user testing We have made introduced in We delivering out aesthetics engagement. for

reported good by subscription increase $X Our recognized optimization or will XX%. million, to work $X average be HX, to estimated we'll which reducing short-term XXXX in of This is length led overall, but by XXXX. revenues a news in in induced million impact an has have

are social our to build We starting throughout discovery features brands.

Android communication late social and their Zoosk Live!, leveraging We relationships feature launched networks. media, people and social is expand in a streaming activities, discovery live new app Zoosk on new iOS social reminder, other and forge a of schedule platforms to As ahead online QX.

engagement early initial While still Zoosk encouraging. user is Live! in

Zoosk excited phones. a particularly live to XX the allows conversation on are XX/X which streamers date about date on next We video speed Singles feature Live!, their through second

user awareness education Live! Zoosk expand the further to to experience increased in configurations usage working deeper campaigns. and product are and We

users also engagement, base in with our be an name with user we go Zoosk have the expect experience rates, retention under a and see to end become The Zoosk increased Great external will a Zoosk increase as Singles. frequent social other guided to to XXXX. new monetization driving subscriptions, the partner daters, provide engagement, visitors users Date and These growth discussions steady company describe. Zoosk more Zoosk locations ARPUs. higher dates advanced will the expect launch events. to impact as to virtual on addition allow of Great towards user subscribers result, and In in These features new go experiences Date]. [Great the paying positive implemented Date more ability on will on initially to include or embedded Date on for video chatting Zoosk to virtual is we will inspiring to Great dating

a back For nurturing while corner. had work product social on in we we growth. of Zoosk's executing improvements Zoosk have to are roadmap, the our critical turning And delays steadily and in couple features are

to benefits have in the SilverSingles Additionally, with and subscription we tutorials online indicated agreement and step educating dating A business. incorporate few This in the of in XX to AARP the our than we counting effect are XX to an that pleased AARP over the largest have demographic to first on demographic, restrictions on users is would signed catering we is normal ecosystem. organization words getting COVID-XX, of largest on expanding million XX the originally U.S. pandemic more for within life a reach dating. announce and AARP over two online the them the our circulation the listing neutral back in offers publications

security new are meaningful We uncertainty lockdowns. well more today, due financial delays potential our a in underway COVID have feel leader our to plan longer revenue around recognized product change for expectations. dating social we to controls, the our in and length to in Zoosk are a we We cautious in Delta lowered outlook, XXXX variant on become executing relationships. more due the But given tighter the execution uncertain subscription

believe a back delay in half to half current trajectory plan, are on to and XXXX. first right growth original effectively and path getting the back one to We the the is company a the growth our versus quarter of get

our communicated features this initial growth. with product reach to Zoosk, upgrade core offerings our For XXXX by year-on-year the growth. QX, to back we to showing and our Earlier point get social discovery is intent to expand an target our functionality, year, inflection subscriptions organic

fronts, segment. our the please call ahead. to excited We continues David to progress be in all on position now Financial and Officer to new plus go large the David, company's online like potential are strengthen and growing to the making turn I would over substantial Clark. about its leadership Chief XX dating

David Clark

a you, at I'm pivotal be excited to Thank very history. time Spark joining such in the company's Eric.

almost for small I've As public, XX companies. years Eric CFO and for mentioned microcap been a

now part Group, Meet relevant my ParshipMeet. experience So includes of

compared and $XX.X a Marketing of of In company addition, $XX.X The decrease second quarter product Spark in three Nutrisystem quarter and shareholder month million position, was you result a EBITDA second which in X% before $X.X acquired feel a in XXXX. that $XX.X current I outstanding Spark. to same our creation $X.X of decline. during was significant primarily subscription direct to strategy million, in increased was revenue the The revenue was period the diet value to million million contribution CFO the Zoosk quarter was the acquired, investment. second decline, for to similar the potential. due management Zoosk based a million it year-over-year subscribers about decrease strong compared of confident ROI-based Adjusted fashion was XXXX, decrease XXXX. is

company $XX.X balance million, million costs of quarter Turning balance million. the principal to balance and amortized cash the $XX.X at on with ended outstanding which an second of sheet sheet, net reflected the $XX.X in our

the sheet one to quarter. $XX.X quarter compared effort charges the We at an debt of the for year. loss to my deleveraging year The non-cash came continue in a our-self prior. deleverage to was primary refinancing difference of $X.X attributable the intentions our beginning income and related of to opportunities. $XX million Net by is debt net taken million as at entirely In reducing explore to in impairment continue possible balance million

revenue to our range between platform. product million $XXX on of This based $XX the adjusted delays revising are primarily remarks. $XXX is to This and million our our some on We improvements EBITDA million prepared Zoosk million. concludes expected in $XX annual our of

the Now let questions. Operator? your and me the over call turn take operator

Operator

Austin ahead. question go Canaccord. comes first Please from Our Instructions] Moldow [Operator with

Austin Moldow

I had monetization that a And that you also and using Great how those kind booked? that was first works, service on some few will how be. just subscribe a is up-charge know of Date. there guided what free will tours additional be curious on wondering, is I or

Eric Eichmann

you question. appreciate Great, thank Austin the

on sort can in out allow daters a so date, to it going Date chat exciting of detail conception, sort able Great destinations, to experience, where will go be able be the is And they'll is So they it giving premium to we're without go service. on too Zoosk to events. much is a which of still to they'll this, on a that working idea still to be on go video

going have to is and to be going to to be pay there be only for offerings some will So subscribers. will that available free, people it some that are and

Austin Moldow

thank other will on services eventually Zoosk? this or is And your available Great, you. that for service be just really

Eric Eichmann

about and this Zoosk ourbiggest Zoosk feel is concept I And think and this Zoosk back how exploring, that daters, so it Both to we're there, mentioned, to on brand, think beyond potentially, us to successful obviously works, that. going for to is so as very is start be for growth. get depending going I we going think important and I a can and we

Austin Moldow

reasons and little in for a is your particular lower think I so margin in lower you there. number, absolute Okay, lowering, EBITDA imply question, Are to do any addition there margin last guys? EBITDA

Eric Eichmann

fact in had heavily I investing - do the with are product technology. No, I mentioned year, it this has think to of and year and last beginning the the at that we from more

And probably to perspective, that's from that not a change the that's and from effect. pure marketing expect perspective. so But we against the perspective margin a obviously, and don't a contribution that's net variable cost revenue marketing

Operator

ahead. go Raj question with Please comes from next B. Our Sharma Riley.

Raj Sharma

My had relate next a changes? there CRM and Zoosk, talked sort feel few do made they changes expand more being more decline How do working would will last call, change you to that were in is not around confident about questions were algorithms, you the of some are the and could and matching and the that to working those Zoosk so what why you were carousel Zoosk on what is on QX? or in bit why so you inflect little working quarters how in

Eric Eichmann

good the it's call. have Thank and to Yes, you, absolutely. you Great on question.

things we've on very or seen sort Zoosk there. that uptake and the on web well a user mostly experience, aesthetics of well. couple the on sort has Zoosk. One, deployed good the past, So as been engagement a in browser experience also received, we've we've on mentioned It's of in of and gone

We've So done things that's important also back-end of a us. a perspective, for are from exciting. number which

like bit beginning. what initials as going were about is does mentioned I So overall, pricing. very hacker an sort we've hCaptcha, sort to things we this it which time CRM, which us. protect on get - is optimization bit attacks, fraud and on a little out. mention that, CRM from some happy should something of taking at increases then of have us introduced, pricing but or call, revenue sort protection, the gets extended more that that's Zoosk we good length to the doesn't recognition people the means It the by a spread talked the on we optimization committed We longer. more the impact And bit that news, out that's that, done for But subscription have so on we've XX%. a And duration, little mentioned has recognition. right we further of so about revenue I for it very

algorithm we we the testing So to our would us. of bring It That's changed things We're had we that things these in the things, basic campaigns. of a of that that out quite need initiatives taken that you was talked to and for done is feel in campaigns, abandoned we performance changed have that's just one us to the set things, we're we of expectations in year, number will things up path are that improvements of retargeting The a which kinds addition was the We've now. of already, past that, the discounts terms but company's on like, these done last ability are Zoosk one longer think the haven't of continue card think would good which sort of in mentioned to sort that one expectation doing that. to faster. initiatives access continue revenue of there. took see more deploying that because this I that bit There on and that get It's bit in could a - be work side to we on product some were bit resources not matching also this. sort retargeting sort of to we are some of going of forward. is and confident - the is a to that about and why delayed. and of a that and have things good things were we're controls pay In user applied part attention sort to we of that all

have, of more we haven't timing features we about. sort and still So fill of question I seen initiatives. discovery think all They're we're in have excited social all, a that and have these of us, deployment results. of the talked the these none of not number that of them about is that a initiatives beyond we've This deployed

these revenue performance we the good So quite feel ability still drive initiatives. about and to of

Raj Sharma

And spend, sort Great. bit on pressure spend little any advertising trends on of the on any advertising CPM/CPC?

Eric Eichmann

up. of part And changes, harder think prices point. saw an that - But noteworthy will of we I associated saw except of we've but in the we for introduced sort iOS than that yes general, future. that in where But that's So dramatic data think some going seen restrictions be around not would hopeful that we as is sort area on we're Facebook channel of sort fluctuates. I Other being it so much believe in of Apple us. in trends sort the that don't change at seen for think this that, I a sharing, we've that with

Raj Sharma

just change other has And geographies U.S. the Do from are at of and all? to Delta know the then a arise? been that any to on out relative mingle U.S., I that lastly, get go with any see the people impacts and impacted things improved you starting causing opening

Eric Eichmann

as interesting, serious we tried know, because obviously you relationships. it's long-term we to looking have that to Yes, cater for are people so

dates. an even activity sort COVID the of, sort activity, And were activity with and so started, online ability in The they saw out restaurant though online cases to seen of and decreased. they increase go think didn't things potential increased, as what their when to a is people just some have interested in I people meet dating, but opened okay, lockdowns, were, we've for up, now are in has who we

the we've hard people picture getting cautious future more really think variant why and Delta bit to what a lockdowns a be of it's with and more I it's sort bit concerned. see new potentially and mixed a the now, been to that's

in still So, fatigue the generally out past positive, lockdowns at time, were but cautious, for there's we're us general same the there. a

lives. And so you the more going or if end going bit we're it's the parts of, bit cautious, going to uncertainty to know effect is we're net when more a bit on as know sort many a COVID end guys there's to hard people's future what is it's net-net and to in is of more be the a

So a on end. we've that bit more been cautious

Raj Sharma

you to And continue. trends expect about do on XX% other growth good, then is non-Zoosk There just the non-Zoosk, brands? the

Eric Eichmann

and growth, sort it's mostly good the by seen core we've and Yes, driven of markets.

to about we're excited we that see and progress good end. And continue on that so

Operator

ahead. from Osmium John go Lewis [Operator Our Partners. with Instructions] will next question Please come

John Lewis

this is aboard. today, bit get - in the are little little on AARP question a maybe I what working? partnership quick you you welcome and at elaborate can how a more how and David a Eric, guess just

Eric Eichmann

the have you call. John, the Yes, Thanks question. great for on absolutely to

with it of the once subscriptions is beginning on promoting have will educating get AARP them. relationship ability people to So AARP. users online that And for and And the content, dating, really the be get of we content will what is a and sort about hope strong SilverSingles. that within AARP partnership they use rewards

We part are brand perspective, online program. that's of dating that the an from only

about excited we're So it.

it's older I for AARP, obviously, that penetrated. think the - online is potential as more for with a know, issues audience of it's you very there under the is And dating around one it's SilverSingles. demographic great

about overall XX%, XX%. XX So the in U.S. take the penetration only plus, the of about you you online if that's but when dating take

of bit online And And So redeem it's how online what sort you works. comes more educated hopefully, for that relationship their of the is they so this and subscription. to a and dating part have of to an how and we when also dating SilverSingles hope of of again, half online activities do if that dating, the understanding in AARP. these segment is And penetration. awareness lack do ability on they the to is an AARP, that around people get will this tools, with expanded exciting step just are behave the it beginning rewards

John Lewis

guess Spark directionally contraction the had of million don't is in Zoosk that business you question, in the purchased Affinitas the speaking, when the I business, over XXX XXX the ballpark, you've and and x XXX I triangulating I little just obviously mean, map and correct? that pre-Zoosk, million something it Zoosk was like, million, where is around it's using other roughly know, there

Eric Eichmann

would are great the or the ballpark, core Spark the old - old versus because of the but brands about I it's brands, would they but and Spark - not Zoosk. say old, they're I Zoosk say, Yes, versus from not half half

John Lewis

growth, half XX% business. got basically you've your So and

hoping contraction stabilize Zoosk, You've in you're got it. the to

Zoosk, or size, started that gave rank and is by you the it I order. you rank an would guess don't that? Jdate, call, if I that correct? you when I size I gave Elite, you Silver, you by So how but think Did Christian was know was this think

Eric Eichmann

brands Not are largest exactly. I Elite would But say for and Zoosk, the three us Silver.

else, I the that important but are for mention the I is correct. five ones think we So And brands understand. John, something part is largest should people to mentioned.

five Canada, are also that brands Affinitas. outside So one other still focus. is we markets, those Benelux Australia, Outside we And Scandinavia or countries brands mentioned markets and original were in in are from marks in non-core part U.S., and not that we revenue of U.K. eDarling, non-core the those the do sort of brands like of our have in of and the France. of we which have like Hungary

those And picture. countries. also mix So a we're that's a of different bit of seeing declines sort providing in

this revenues. Now, small not our it's we point. of a at nevertheless, But of it's sort part that we're one focusing on

So numbers. EBITDA that sort also changes of

John Lewis

I Canaccord at think selling the you those conference, would you consider businesses? said

Eric Eichmann

Yes.

John Lewis

Okay.

Eric Eichmann

could definitely dealing we we meaningful are they or funding management do Yes, and helpful not but impaired multiple in businesses but a that's would about that something current company these EBITDA end, way they on of could, low consider for that. then led I have we haven't good in get we've had in a operating, And assets in the day-in to think, that initiatives sort as team from day-out. on past, they if But look, we thinks what's as or that terms something important to because conversations we yet involve us. anybody of and our And operations not cost. had are to it's very a certainly, the those

is down the a bottom helpful. line, ends lot so to the which up revenue And of falling

John Lewis

shareholders privately, for buy and in to I this I board the point absolutely one to and management - as Before we've discussed make stock market. that We've members just management had go, board open this both the participate essential the well. want alongside the It's board. and company but at

really difficult that hears and way very or So very, up really long to has about put very shut been to there's a no put make point to as we've want that up. but been mean don't it, I And crude approaching. very, other be time everybody this I And I to or clearly very loud inflection sure said, rude it. message that

about of have. not the of capital, the out all alignment just lot So insider hope lot option grants, and terms, directors see, to And with with a I we're that's of better some but got to pocket Thanks. I see I a buying. excited have hope we to

Operator

Our next Lismore come Waldo question go from Please will LLC. ahead. with Partners Adam

Adam Waldo

welcome, areas, taking for David thanks I and if I'd Eric to pursue like Hi, three my may. questions.

first of more the AARP, and questioning. remarks in would a you what in gave around questioners, both prior The be beyond detail little on prepared line

detail around that, value current bit Secondly, to which Zoosk? more the I'd the you had charge quarters little is now. and impairment carrying of then for explore on the topic in a as a a And quarter more, refinancing getting finally, know few like been favorite debt

AARP is typical So you it as a a subscribers. AARP on of the situation, fair XX to roughly million as think about marketing days, sort million have have affinity number relationship they it members, AARP X

that So AARP between, marketing big little what us hunting gets members it's work can of in you economic a essentially color how give splits a terms too would kind membership and early ARPU's give potentially on for you it base we more the relationship their to license, just coming commentary? or from of might is that come about how the to think AARP would margins of from that and affinity gross clients

Eric Eichmann

think just are and man, I for those can I a questions I again thanks think great. they Adam, minute, maybe

a So to give programs, right. sense just AARP the on many has you on different AARP, that,

And online, seminars okay, relevant then magazine to a site online that to sort do that that of very lead within only cetera. to basically how dating present it's as people a that integrated something you to only use user So they bit if from present affiliate online those property classes rewards then AARP on the is towards offer or SilverSingles. in exchange that or be safe appear rewards those on you sort those et that sort And understanding sense you rewards what the you perspective. et have is cetera. of or sites an their of and can of, dating AARP, the like have what in - sort take or can things traditional we the want This their give for we're of for more in is

obviously the of, are the at But people they're ability perspective level different, just a a So rewards exposure confidential. SilverSingles. leads economics provide sort from a high get idea that for it's that and is bit to to discount - a for they the

I'll P&L, let and impairment areas on that's refinancing. take a and debt David So other the two

David Clark

in filing though new we'll related quarter trajectory $XX million there counterintuitive, down Adam, is Q numbers, for a Zoosk. it's But little the need in our there Yes. preliminary even so few be goodwill days. impairment a next was And the to but file advantage a in there assets. about tax that as wells a to in not of write also our as of take asset deferred was envisioned Zoosk was will quickly would originally deferred allow, us the [NOA] because the of assumption delays allow tax the

So that's week. cube and the refiling later impairment this

and position refinancing, job, the my is company sixth not think the but to the pursue But the bear as flexibility at potentially to have in market in As there business me, this to see the leverage, I with see on keep we the early more remain invest will also we we very updated markets days, so we opportunities. refinancing continuing but I'd out only a are getting where day some so as it. hot growth and like to look

Adam Waldo

the approximate revenue value rate maybe then, have is and the And handy? And the carrying Zoosk. now said Eric of sort carrying Okay. on company's Zoosk Zoosk of roughly asset you run value what's that half our of

David Clark

million. it's around Yes, right $XXX

Adam Waldo

on more And Okay. follow-up All then one refinancing. just the right.

flow we to million long-term using I cash here $XX-ish of entirely presently, net current with going the presumably of in to be free to debt principally portion the of debt have pay year. not we're So mean, debt second million, $XX down million $XX half of

net debt markets, be? debt too to net debt need significantly or on of $XX the level the million current of or we're or bank it debt that the move our terms either to needle days our on markets, rate exit around just so. we is the we interest in with So high year does capital paying think What Dave? Do early there,

David Clark

It X.X well but of cash midpoint you're hit kind in little the early, said, flow. if what we a below times guidance, you is down implied of that

But answer specifically. that. about days, a I've can this that again, work good pretty feel so to little so got I more I that do So early is

Operator

Ladies Thank will today's session, the conclude our presentation. and also question-and-answer call. gentlemen, this you conclude for and attending will

now may You disconnect.

Spark Networks SE (LOVLY) 17 Aug 212021 Q2 Earnings call transcript