LOV - Earnings call transcript Q3 2021

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Joo-Hun Kim

[Call Starts Abruptly] Thank you, operator. Good afternoon, and welcome to Spark Networks Fiscal 2021 Third Quarter Earnings Conference Call. With me on today’s call are Spark’s CEO, Eric Eichmann; and CFO, David Clark.

Before I turn the call over to Eric, I’d like to cover a few quick items. This afternoon, Spark issued a press release announcing its fiscal 2021 third quarter financial results; the release is available on the company’s website at spark.net on the Investor Relations page. being Investor will website. Relations is playback available call the on section this recorded be and for Also, of Spark’s like contain listening on everyone events. regarding to any or I’d made comments future today results this information forward-looking that may or projections call remind subject actual our you caution events to materially from are or or statements and projections. uncertainties fact, predictions are, results We risks in that statements such that that to could cause differ

events filings Spark or and these no factors that over SEC. revise actual statements. that, Eric or materially be could Additional any CEO Spark update ahead. to risks, Eric, from call With results to Eichmann, cause I forward-looking found Networks. uncertainties differ go in with undertakes may please now statements will to the of forward-looking the obligation company’s the turn

Eric Eichmann

afternoon, are to earnings us you, and leader we in, conference Thank dating the we in Networks. are social Thank a Today, fiscal quarter today. you call. everyone, Good for joining future of excited XXXX right third Spark Joo-Hun. welcome about Jumping our focusing segments relationships dating and meaningful to the growth. for provides one demographic with happens XX fastest dating the These online segments for platforms of and faith-based online the of opportunities significant be of market plus the growing affiliations. on Spark market

matches. and brands growing relationships that Mingle, aimed are demographic affiliations. in total Singles brands for the With we and rapidly properties market. Our subscribers meaningful focused Christian targeting meaningful Zoosk focused Four market Store. confident access including are are seeing meaningful Jdate. specific fixing in dating online year-over-year and Elite letting segments of is These upgrading market collectively in any and fifth Mingle, pricing. we without that limited older better our Zoosk much at are Zoosk, that our active targets technology matchmaking membership a rests With to of its provide Zoosk vast more users and popularity largest meaningful the one have much accurate unique App of in X.X using increase monthly issues grossing place and Singles the up these, an address these uses and relationships users, been and the our good make are as insights to highly Jdate growing Singles, on in top Zoosk’s religious top data within the is Singles, Silver apps and segment Mingle, on the nearly can Christian Jdate more quarters. that approach behavioral swath Singles, strong, and big past five have fraud. future. relationship revenue from enhancing product Singles, leading and Recently, growing segments, brand than user Christian are Apple revenue Zoosk worldwide, platform Silver broader on of online we in XX% we with is revenue optimizing and million fraudulent Today, singles while dating. of continue four their Silver of Elite users the to with a the competition its relationships a more user grow base experience, brands are category. dating with the tailored five Elite we

and offerings new in We that engagement believe increase will we drive an higher have subscribers. also focused on launching

Android apps. features live our iOS those of is service quarter, new we streaming a One last and Zoosk introduced that on Live!

signs of the seeing number are has users Live! of good quarter. traction as Zoosk doubled last We since

quarter, and the we have growth Zoosk the since them. first have Zoosk’s third reduced time in decline, While have we for time organic taken owned these we changes new to saw implement, revenue registrations

XX%. believe increase This This We first to experience are new fourth dating Dates. a in acquisition and over grew XXXX. graphic to exciting In coming Dates we Great organic Great the and Zoosk Athens, with converting kind direct allow drive Zoosk’s as expense, and quarter, without subscribers. better go interactive fact, customer In engagement means an to virtual sequentially Zoosk virtual costs. attractive extra expect user will of will such offering Zoosk, destinations leading travel dates new conversion we improved more Kyoto, on a in locations for subscribers XX% in the its Naples, its marketing and launch

We in improvements that will return are we and to the confident result growth. making Zoosk are subscriber revenue a to

In start O’Lone, in our are laying proposition, of brought market. the groundwork increase and marketing place Bridget of her social have today conclusion, her of business Spark September, to parts enhance putting excited in and new she to expand fast-growing and all addressable for of to value on our we marketing an the brands. dating forward marketing infrastructure in I investing segments We initiatives team our Global VP $X.X are am market, and contributions. over the her ahead, brand’s and our look brand’s brand both addressing we Bridget spend. are the to As on billion our Brands online look team’s board representing

to improving budget plus to subscribers. and We have the forward. higher user going sustainable marketing engagement experiences Strong resources million brands, growth and drive and awareness, drive unique $XXX

that resources subscribers. includes The brands our first and the share and product to of make market. our these to four in marketing dollars brands plan business invest part We to half nearly continue our revenue up business increase growing collectively of and

is as category part second discovery. fast-growing social also is The as well emerging addressing the segment of which Zoosk, meaningful the market

me are turnaround David? and strategy of an to positive our over sign confident quarterly in organic of turn clear Zoosk subscriber any financials With let take and our growth and effort revenue David, questions We increase in the may have. you registrations are growth. you then a and take will more returning turnaround for call rates to that, the conversion who working. through and detail, we’ll Sequential and are in execution in currently a results

David Clark

grew and quarter our of third Eric, $XX.X Christian Revenue collectively in attributable half is five revenue. compared for revenue of driven and specifically Silver Zoosk. the the and the revenue largest XXXX was brands, number quarter afternoon, million Singles, Four good company total to directly the you, to nearly the XXXX. during Mingle, paying total of everyone. the decrease Singles, The during subscribers, decrease Jdate X% represented quarter average in million Elite $XX.X quarter in Thank third of the by

was a was tighter of million to $X advertising decrease third The was compared Marketing $X.X direct Adjusted increased primarily likely and the $XX.X in had customer in our due for million third EBITDA million increased XXXX. the the of the third large was of XXXX the to of acquisition XX.X% to market also quarter XXXX advertisers. Zoosk product the during We million post-pandemic decrease quarter investments. same for to a month a compared revenue the quarter by due $XX.X decline. in three period result quarter, Zoosk XXXX, unusual year-over-year spending revenue decline in third contribution

quarter quarter period in Turning foreign slightly Spark’s per compared to XXX,XXX the the in of increase loss XXXX compared loss quarter in paying XXX,XXX the of the of quarter. by user, was of rates to year-over-year. indicators This XXXX. the average to to for primarily XXXX was same in XXXX. $XXX,XXX performance period loss $XX.XX XXXX. loss third quarter compared to Net driven key our ARPU or same revenue an in third Average $X.X of to in decreased XXXX from third subscribers monthly a in of third increase of net the monthly $XX.XX the million in exchange decreased

$XXX,XXX debt to The increased For operating $X company the $XX.X year-over-year million. with balance the million third outstanding and to $XX.X our cash the million. in of third Shifting income quarter, quarter ended sheet.

quarter. balance improve at the $XX.X a of reduction nearly our to in sheet, million the million debt year, reduced continue our $X having the beginning including third We by

my As to I our objectives one is on will invest which call, to the stated business of more our of growing refinancing share fast-growing and opportunities, this debt allow market. last in us explore primary

guidance. to Turning

in $X.XX annual million range and and We equates $X.XX. are to to the $XXX reiterating of to EBITDA that million, $XX between of $XX our share expected $XXX million adjusted and of million per EBITDA revenue

As visibility potential we Operator? we’re we’ll that, EBITDA believe Spark it’s positioning of investment large grows upside both we have quarter, strong sequentially. represents the with expect with adjusted given questions. XXXX and and In conclusion, brands for a revenue fourth the our for EBITDA a a adjusted and in With into take remainder revenue and opportunity. very your high And subscription business, attractive market. happy growing to

Operator

today Thank take we’ll you. our from Raj with Instructions] [Operator first Riley. And B. question Sharma

Raj Sharma

of sort the has afternoon. kind Thanks what out growth little a sites Could from year-on-year? there? relative the quarter, are last to question. good for expand seeing taking bit trends non-Zoosk of the on it the you down come And Hi, you’re other the

Eric Eichmann

those just your Yes, Most that XXXX lockdowns. advertisers is to can hearing lot expense this so due for in last the the a Yes. in even QX the in not to or middle Hi, advertising Starting very you we voice. QX thank a were to of And what to of allowed that, though advertise saw decrease of market hear a didn’t in we that year the of exactly to is revenue up. bit year had market. that we we was advertising QX this And that as little advertising brands. terms it a Raj, tighter it than that made is didn’t of from attributable open Good in up a QX, and tighter. as much bit expected. growth we’re expected Normally, year, much opens an tell that question. to

Raj Sharma

expect QX, of then social saying were had And the know first Zoosk on in I the seeing in half talked still first it. pickup the in the kind call, growth. the streaming and talk you a Got you’re and you’re could overall that live Do about stalled revenue overall please? efforts the about revenue you last side, organic Zoosk that still quarter, or you you the see an discovery or that, but the quarter-on-quarter do in an pickup

Eric Eichmann

course. Yes, of

which launched it experience. was seen Live! of we’ve is the things. what a I but that we’ve an two slow acceleration Zoosk Zoosk One is And the Live! being the we in So call end and mentioned we at think start, users of on QX. seen

that’s And encouraging. so

we we’ve that that quarter. we’re feel and of a so things have to in users quite engagement about doing with product, last excited seen the and increase what And watching the lot

as And organic growth one. we saw of regarding that’s then mentioned, Zoosk. growth, a organic So pickup for we

just people Live!. So was not to a we run to Zoosk the Zoosk increase quite though couple drove to XX% even A/B there some test growth. exactly exciting in didn’t it. Obviously, coming more decreasing users saw that of when think work describe, that. We of of of access terms general, fraud. it that’s sort But things drove And bit comes know Zoosk we in things of have organic we what also we an right? providing in to contributes of about think to But a did we organic We sort about think sort that growth. talk to to of and a

David Clark

I The growth the want on, only revenue. Raj, yet that not actually users, in is sure thing is you’re to organic in make clear

Eric Eichmann

to Correct. you – sorry, we still forgot point. answer your And And then expect... mentioned yes, Raj, I

Raj Sharma

I still in Are on first expecting that mean track? a expecting you’re that? still pickup you half. Is

Eric Eichmann

Yes, we do.

we the would we initial. expected as just So said that see quarter, last in we

a we’re you know, As subscription business.

call from the initials the half to QX to next number and up of indicator with indicator, the And the in growth is subscribers year. result health of get new first next in expect we and So the of Zoosk that revenue in we year still overall what that that pick best we it. leading

Raj Sharma

the an about talk all Store Google you talk by the actions much Got it. with impact little do on guys And recent and and bit fees, App a of lastly, you and have Apple then can those that?

Eric Eichmann

Yes.

million I’ll answer little that. And than that But products and more the Store in I’ll of the David on make what have than question, is decreasing fees. less for also the – part they’re about get make me bit app a Google talk first let Apple that we $X Apple obviously, fees this. said So then and

doesn’t us. to really it So apply directly

However, right direction however, a in perspective. this from our is sign the

broadly. And obviously, more that to applies so could lead that something

interesting be us. would that So for

David Clark

year. Yes. million around now. RF right right of a now, And run at rate piece The Raj $XX a Raj,

So take if be threshold, for further and But that could it they don’t savings now, us. meaningful steps raise right to we were qualify.

Raj Sharma

it. Got

the question take Okay. Thank I’ll you. offline. on

Eric Eichmann

Thank you.

Operator

will Austin Canaccord. Our next come question from with Moldow

Austin Moldow

to your Zoosk wanted to users? like? on gift what’s kind they ask gifts Are of factored that of spend behavior Hi, partnered of Is into mostly Live! about sending streamers? What’s there Zoosk I QX your outlook? that monetization. behavior the they and any Or overall And do streamers? your

Eric Eichmann

hear Thank Austin. you. It’s Great. good you, to

have is Live! need looking people mentioned, So and as I for familiar a engagement they completely experience users. you new – our that start and happens what once Zoosk you with get into the it’s going generally streamers, start gifting. are And product watching to

a So the of there’s bit and delay engagement between a revenues. the

sort what that similar seeing people of we’re broader gifts on live the some Zoosk of we that However, the is behavior are that get buying experience. shows meet group’s from

So revenues of you appearing the users in would engaged becoming revenue getting part to making that in super this more that up we users expect of follow. end sort we experience number stream. a and gifters We doubled mentioned, continue have they that of as we’re improvements would number Live! that a the engaged as up Zoosk the over in or super experience time, of users big end the

obviously we the or All in any forecast guidance in of provide included of sort is that future. that

Austin Moldow

That’s it. a speak helpful. dating of or the then question. sort Can And landscape? religious niche little Got last in about to competition starting you you’re see any bit

Eric Eichmann

Yes.

actors of some change four surprisingly, other landscape. actors, were people new entering hasn’t big been not that represent really big there the significant competitive and think I a So the in remember,

really the investing obviously, and ones properties, because this which a more of matched be So lot that they’re find in a we to area. bit continues

when their players. competition about the to so mass upward couple And of limited but in of sort think of some a properties, remains you

are markets rest the as market And the those are and of faster become segments those So great. think in have matured, important has dynamics growing we than more still the market.

Austin Moldow

Thanks it. much. very Got

Operator

will Thank you today’s your Instructions] time, that [Operator are conclude And there this further and at for call. no participation. questions,

You disconnect. may now

Spark Networks SE (LOVLY) 16 Nov 212021 Q3 Earnings call transcript