Thursday, April 28, 2011

Ancestry.com Inc. Reports First Quarter 2011 Financial Results

Ancestry.com Subscriber Growth of 33% Year-Over-Year
Total Revenues Up 41% Year-Over-Year
Raises FY 2011 Outlook

PROVO, Utah, April 28, 2011 (GLOBE NEWSWIRE) -- Ancestry.com Inc. (Nasdaq:ACOM), the world's largest online family history resource, today reported financial results for the quarter ended March 31, 2011.

"Ancestry.com had an outstanding start to 2011, ending the first quarter with over 1.6 million subscribers and delivering record financial performance. The investments we are making in content and in our product are generating positive feedback from users, and our ongoing marketing programs, along with the second season of Who Do You Think You Are? on NBC, are helping to further broaden interest in the family history category," said Tim Sullivan, Chief Executive Officer of Ancestry.com. "We intend to continue investing in the business through product enhancements, content acquisition and the further ramp-up of our talent base to support our anticipated growth in 2011 and beyond."

Ancestry.com Web Sites Highlights
  • Subscribers totaled 1,615,000 as of March 31, 2011, growth of 33% from the end of the first quarter of 2010 and 16% since the end of 2010.
  • Gross subscriber additions were 425,000 in the first quarter of 2011, compared to 279,000 in the first quarter of 2010 and 203,000 in the fourth quarter of 2010.
  • Monthly churn1 was 3.7% in the first quarter of 2011, compared to 3.3% in the first quarter of 2010 and 3.9% in the fourth quarter of 2010.
  • Subscriber acquisition cost2 in the first quarter of 2011 was $69.56, compared to $69.57 in the first quarter of 2010 and $96.87 in the fourth quarter of 2010.
  • Average monthly revenue per subscriber3 in the first quarter of 2011 was $18.05, compared to $16.70 in the first quarter of 2010 and $17.78 in the fourth quarter of 2010.
First Quarter 2011 Financial Highlights
  • Total revenues for the first quarter of 2011 were $91.0 million, an increase of 41.3% over $64.4 million in the first quarter of 2010, driven by growth in our core Ancestry.com Web sites revenues of 42.7%.
  • Operating income for the first quarter of 2011 was $14.2 million, compared to $7.6 million in the first quarter of 2010.
  • Net income was $9.0 million, or $0.18 per fully diluted share, for the first quarter of 2011 compared to $4.0 million, or $0.08 per fully diluted share, in the first quarter of 2010.
  • Adjusted EBITDA4 for the first quarter of 2011 was $25.6 million, compared to $17.0 million in the first quarter of 2010. Adjusted EBITDA margin for the first quarter of 2011 was 28.1%, compared to 26.4% in the first quarter of 2010.
  • Free cash flow5 totaled $18.7 million for the first quarter of 2011 compared to $11.4 million for the first quarter of 2010.
  • Cash and cash equivalents totaled $102.3 million as of March 31, 2011.
Recent Business Highlights
  • Who Do You Think You Are? television series successfully completed its second season and NBC announced its renewal for a third season, which is currently expected to air in the first quarter of 2012.
  • Addition of several new important content collections, including U.S. slave manifest records, the definitive 19th century collection of Irish historical records, and newly digitized U.S. Civil War records.
  • Ancestry.com's mobile app for the iPhone, iPad, and iPod reached 1 million downloads last week, with over 400,000 of those downloads happening in Q1 alone.
Business Outlook

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

Second Quarter 2011
  • Revenues in the range of $98.0 to $100.0 million
  • Adjusted EBITDA in the range of $35.0 to $37.0 million
  • Ending subscribers of approximately 1,670,000
Full Year 2011
  • Revenues in the range of $395.0 to $400.0 million (increased from the previously expected range of $370.0 to $375.0 million)
  • Adjusted EBITDA in the range of $135.0 to $140.0 million (increased from the previously expected range of $125.0 to $130.0 million)
  • Ending subscribers of approximately 1,710,000 to 1,730,000 (increased from the previously expected range of 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 800-946-0774 (within the United States), or 719-457-2640 (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, May 6, 2011. To access the replay, dial 888-203-1112 (within the United States), or 719-457-0820 (international callers) and enter the replay passcode 9389152. 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 expense and certain non-cash and non-recurring items. Free cash flow subtracts from adjusted EBITDA the capitalization of content database costs, purchases of property and equipment and cash paid for income taxes and interest. 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 more than 1.6 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 24 million family trees containing over 2.4 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.