Angie's List reported today it swung to a $4 million net loss in the first quarter from a $4.4 million net profit in the year-earlier period, in part because revenues barely changed and the company reserved $3.5 million as a contingent liability for unnamed pending litigation.

Revenue for the quarter totaled $83.86 million, just $13,000 more than in the same period the year before. Within that, revenue from members fell by $1 million to total $16.3 million while revenue from service providers such as remodelers climbed by $1.3 million to reach $67.5 million.

On the other hand, operating expenses rose nearly $9 million, or 11.4%, to hit $87.2 million. Indianapolis-based Angie's List attributed $3.5 million of that to the $3.5 million it was setting aside because of the unidentified pending litigation.

The company prefers to report its numbers in terms of adjusted EBITDA, which it defines as earnings before interest, income taxes, depreciation, amortization, non-cash stock-based compensation expense, contingent liabilities and adjustments and non-cash long-lived asset impairment charges. That metric showed the company's adjusted EBITDA declined to $4.8 million in the January-March period from $8.6 million a year earlier.

Today's news was the first earnings report since Angie's List announced in March that it will begin letting consumers access its ratings and reviews for free starting next quarter and that it had reached an agreement in which a private investor bought 12.75% of the company's shares and got three seats on its board of directors.

"Our freemium offering, which is being piloted in some top markets, continues to perform robustly, with logins, searches, contract value and reviews each up compared with our control markets," Scott Durchslag, the company's president and CEO, said in a news release. "These encouraging results give us confidence that our upcoming nationwide freemium rollout will drive a re-acceleration of our business.

"We are also focused on stabilizing our core business during this time of change," Durchslag added. "Our overall first quarter revenue was flat year over year as we continued to face headwinds on member and advertising revenue. ... On a more positive note, we sequentially grew our total number of service providers and our backlog of contract value, and our total site traffic increased approximately 25% in the first quarter of 2016 from the year-ago quarter.

"While turnarounds take time, we are approaching a key inflection point in our business as we make major progress toward introducing our new freemium business model," Durchslag said.