By cutting its marketing costs 31% and relying on a 21% rise in revenue from remodelers and other service providers, Angie's List was able to report today that it swung to a $4.4 million net profit in the first quarter from a $3.8 million loss a year earlier, the company announced today.
Revenue from consumer members fell 5.3%, but service provider income climbed to $66.2 million in the January-March period from a year-earlier $54.4 million. In effect, the $7.2 million cut in marketing expenses to $16.3 million covered the bulk of the change in net profit while the $11.8 million gain in service provider revenue covered increases in operations, sales expense, technology, and other administrative fees.
Total paid memberships as of March 31 stood at 3.1 million, up 18% year-over-year, while gross paid memberships added during the quarter slipped 20% to 229,987. Meanwhile, the number of service providers participating grew 5% from a year earlier to reach 54,341.
had a positive start to the year,"
While it moved into the black, Angie's List remains a debt-laden company. Its balance sheet shows long-term debt totaling $58.9 million, and the company's accumulated stockholders' deficit stands at $260.1 million.
Also today, Angie's List announced an exclusive relationship with
In a related development, Angie's List announced April 21 that it is partnering with OnDeck to provide financing for all of the service providers listed on the service. Businesses will have access to up to $250,000 in loans and lines of credit up to $20,000.
"We are focused on providing convenience and value to service providers as they grow their businesses and we are excited to work with OnDeck to help make that happen," said Tom Fox, Angie's List chief financial officer in a press release. "As a result of this relationship, service providers will have access to a leading small business lender and seamless customer service experience."
OnDeck was founded in 2006 and has loaned more than $2 billion out to small businesses in that time.