Thursday, February 24, 2011

Ancestry.com Inc. Reports 2010 Financial Results

[NOTE: see http://ir.ancestry.com/releasedetail.cfm?ReleaseID=552742 for complete press release with financial tables.]


February 24, 2011

Ancestry.com Inc. Reports 2010 Financial Results
– Ancestry.com Subscriber Growth of 31% Year-Over-Year –
– 2010 Total Revenue Up 34% Year-Over-Year –
– Provides FY 2011 Outlook –

PROVO, Utah, Feb. 24, 2011 (GLOBE NEWSWIRE) -- Ancestry.com Inc. (Nasdaq:ACOM), the world's largest online family history resource, today reported financial results for the quarter and full year ended December 31, 2010.

"2010 was a productive and very successful year for Ancestry.com. We drove substantial gains in our subscriber base both domestically and internationally, delivered strong financial results and executed on our plan to position the Company for long-term growth," said Tim Sullivan, Chief Executive Officer of Ancestry.com. "Highlights included investments in our product and our talent base, the completion of three complementary acquisitions, and our highly successful partnership with NBC in bringing Who Do You Think You Are? to the U.S. The hard work will continue in 2011, but we believe these achievements give us a solid foundation for growth in the coming year and beyond."

Ancestry.com Web Sites Highlights

- Subscribers totaled 1,395,000 as of December 31, 2010, a 31% increase over the end of 2009 and up modestly since the end of the third quarter of 2010.

- Gross subscriber additions were 203,000 in the fourth quarter of 2010, compared to 165,000 in the fourth quarter of 2009 and 252,000 in the third quarter of 2010.

- Monthly churn[1] was 3.9% in the fourth quarter of 2010, compared to 3.6% in the fourth quarter of 2009 and 4.0% in the third quarter of 2010.

- Subscriber acquisition cost[2] in the fourth quarter of 2010 was $96.87, compared to $85.21 in the fourth quarter of 2009 and $81.58 in the third quarter of 2010.

- Average monthly revenue per subscriber[3] in the fourth quarter of 2010 was $17.78, compared to $16.67 in the fourth quarter of 2009 and $17.75 in the third quarter of 2010.

Fourth Quarter and Full Year 2010 Financial Highlights

- Total revenue for the fourth quarter of 2010 was $82.7 million, an increase of 37.6% over $60.1 million in the fourth quarter of 2009, driven by growth in our core Ancestry.com Web sites revenues of 41.1%. For the full year 2010, total revenue was $300.9 million, an increase of 33.8% over the full year 2009, with Ancestry.com Web site revenue growth of 37.7%.

- Operating income for the fourth quarter of 2010 was $17.9 million, compared to $8.8 million in the fourth quarter of 2009. For the full year 2010, operating income was $60.6 million compared to $32.0 million for the full year 2009.

- Adjusted EBITDA[4] for the fourth quarter of 2010 was $29.7 million, compared to $18.7 million in the fourth quarter of 2009. Adjusted EBITDA margin for the fourth quarter of 2010 was 35.9%, compared to 31.1% in the fourth quarter of 2009. For the full year 2010, adjusted EBITDA was $101.0 million, compared to $71.6 million for the full year 2009. Adjusted EBITDA margin for the full year 2010 was 33.6%, up from 31.8% for the full year 2009.

- Net income was $12.6 million, or $0.25 per fully diluted share, for the fourth quarter of 2010 compared to $9.1 million, or $0.20 per fully diluted share, in the fourth quarter of 2009. For the full year 2010, net income was $36.8 million, or $0.76 per fully diluted share, compared to $21.3 million, or $0.51 per fully diluted share, for the full year 2009. The fourth quarter of 2010 included expenses of $1.0 million ($0.02 per share) associated with the November 10, 2010 secondary offering.

- Free cash flow[5] totaled $60.4 million for the full year 2010 compared to $29.6 million for the full year 2009.

- Cash, cash equivalents, and short-term investments totaled $65.5 million as of December 31, 2010.

Recent Business Highlights

- Partnered with NBC for the second season of the Who Do You Think You Are? television series, which premiered on February 4, 2011.

- Added several new important content collections, including U.S. Military cadet applications, U.S. Penitentiary records, and early London parish registers spanning nearly 300 years.

- Released new iPad app, available for free at the iTunes App Store, allowing consumers a new way to share and update family trees, old photos and records.

- Released Ancestry.com Family Tree Maker® 2011 for Mac on the Mac App Store.

Business Outlook

The Company's financial and operating expectations for the first quarter and full year 2011 are as follows:

First Quarter 2011

Revenue in the range of $86.0 to $88.0 million
Adjusted EBITDA in the range of $22.0 to $24.0 million
Ending subscribers of approximately 1,545,000

Full Year 2011

Revenue in the range of $370.0 to $375.0 million
Adjusted EBITDA in the range of $125.0 to $130.0 million
Ending subscribers of approximately 1,700,000 to 1,725,000

Conference Call & Webcast

Ancestry.com will host a conference call with analysts and investors today at 3:00 p.m. MT (5:00 p.m. ET). An accompanying slide presentation and a live webcast of the conference call will be available at the investor relations section of the Ancestry.com Web site, http://ir.ancestry.com/. Participants can also access the conference call by dialing 888-578-6632 (within the United States), or 719-325-2226 (international callers) approximately ten minutes prior to the start time.

A replay of the call will be available approximately two hours after the call has ended and will be available through Friday, March 4, 2011. To access the replay, dial 888-203-1112 (within the United States), or 719-457-0820 (international callers) and enter the replay passcode 1368993. The webcast replay will also be available for 12 months on the investor relations section of the Ancestry.com Web site, http://ir.ancestry.com/, under Events and Presentations.

Use of Non-GAAP Measures

Management believes that adjusted EBITDA and free cash flow are useful measures of operating performance because they exclude items that we do not consider indicative of our core performance. In the case of adjusted EBITDA, we adjust net income for such things as interest, taxes, stock-based compensation and certain non-cash and non-recurring items. Free cash flow subtracts from adjusted EBITDA the capitalization of content database costs, capital expenditures and cash paid for income taxes and interest expense. However, these non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income and net cash provided by operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of these non-GAAP measures is contained in tabular form on the attached unaudited financial statements.

Our management uses adjusted EBITDA and free cash flow as measures of operating performance; for planning purposes, including the preparation of our annual operating budget; to allocate resources to enhance the financial performance of our business; to evaluate the effectiveness of our business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of our results with those of other companies; and in communications with our board of directors concerning our financial performance. We also use adjusted EBITDA and have used free cash flow as factors when determining the incentive compensation pool.

About Ancestry.com

Ancestry.com Inc. (Nasdaq:ACOM) is the world's largest online family history resource, with nearly 1.4 million paying subscribers. More than 6 billion records have been added to the site in the past 14 years. Ancestry users have created more than 20 million family trees containing over 2 billion profiles. Ancestry.com has local Web sites directed at nine countries that help people discover, preserve and share their family history, including its flagship Web site at www.ancestry.com.