Spark Networks Continue To Suffer Financial Woes In 2016
Last March, the company released its financial report for 2015, outlining the ongoing drop in revenue, despite showing some small positive signs of a subscriber increase – driven by the launch of revamped versions of its flagship brands, JDate and ChristianMingle.
The company has continued to make further changes to its business throughout the first months of 2016, launching its promising church partnership program and adding a premium level to Jewish dating startup JSwipe, a platform it acquired last year for a sum of $7m.
However despite its continuing efforts to drive the company forwards, Spark has once again announced a set of poor financial results with its latest Q1 report.
Spark suffers further revenue loss
For Q1 of the year, Spark reported total revenue of $9.9m, suffering a 27% year-on-year decrease from the comparable period of 2015, and an 8% decrease from the previous quarter.
In the report, the dating provider credits this to a decrease in average paying subscribers, as well as a decrease in its Q1 2016 average revenue per user – which it said was caused by an increase of six month subscriptions sold within the Jewish and Christian Networks in the last three quarters.
The company also witnessed a net loss of $3.4m for Q1 of 2016, equalling almost three times its net loss of $1.2m for the final quarter of last year.
Additionally, it saw a $2.7m decrease in adjusted EBITDA from the previous quarter, and a $4m decrease from the year before, with adjusted EBITDA coming in at a loss of $2.3m.
Commenting on the results, Spark Networks CEO Michael Egan said: “We continue to drive change with our organisation, our products and our partnerships with the communities we serve.
“Though Q1 included seasonally large investments in direct marketing which had a negative impact on our contribution margin and EBITDA, it also included solid progress against our key growth initiatives, all of which remain on schedule.
“We will continue to build upon our strategic position in the market and are focused on driving our growth initiatives. Notably, these initiatives will require little incremental investment to execute.”
Plans for growth in 2016
Despite Spark’s obvious financial woes, the company has seen a minor growth in average paying subscribers for its Christian segment, seeing a 0.2% increase to 124,180 thanks to its recent church partnership.
Its total average paying subscribers also mostly stayed consistent with the previous quarter, but was still a drop of 6.6% compared to the year before.
Speaking about the company’s plans for the rest of the year, Egan said: “Our intention is to grow profitability and achieve 10% EBITDA margins in the second half of the year.
“We will continue to focus on building organic and authentic relationships within the communities we serve and will be expanding our services to both millennial audiences and new markets, ensuring that we remain a leader in the niche dating industry.”
Check out Spark Networks’ full Q1 report here.
