Thursday, July 28, 2011

Ancestry.com Inc. Reports Second Quarter 2011 Financial Results

Ancestry.com Inc. Reports Second Quarter 2011 Financial Results

— Ancestry.com Subscriber Growth of 28% Year-Over-Year —
—Total Revenues Up 36% Year-Over-Year —
— Raises FY 2011 Outlook —

PROVO, Utah, July 27, 2011 (GLOBE NEWSWIRE) -- Ancestry.com Inc. (Nasdaq:ACOM), the world's largest online family history resource, today reported financial results for the quarter ended June 30, 2011.
"Our strong second quarter financial performance demonstrates that our investments in content, product and marketing continue to drive subscriber growth, enhance the user experience, and increase our brand awareness," said Tim Sullivan, Chief Executive Officer of Ancestry.com. "Going forward we plan to continue to make investments that can help drive our business and position us well for long-term growth."

Ancestry.com Web Sites Highlights
  • Subscribers totaled 1,672,000 as of June 30, 2011, growth of 28% from the end of the second quarter of 2010 and 4% since the end of the first quarter of 2011.
  • Gross subscriber additions were 322,000 in the second quarter of 2011, compared to 291,000 in the second quarter of 2010 and 425,000 in the first quarter of 2011.
  • Monthly churn1 was 4.6% in the second quarter of 2011, compared to 4.3% in the second quarter of 2010 and 3.7% in the first quarter of 2011.
  • Subscriber acquisition cost2 in the second quarter of 2011 was $81.23, compared to $74.04 in the second quarter of 2010 and $69.56 in the first quarter of 2011.
  • Average monthly revenue per subscriber3 in the second quarter of 2011 was $18.88, compared to $18.02 in the second quarter of 2010 and $18.05 in the first quarter of 2011.
Second Quarter 2011 Financial Highlights
  • Total revenues for the second quarter of 2011 were $101.3 million, an increase of 36.1% over $74.5 million in the second quarter of 2010, driven by growth in our core Ancestry.com Web sites revenues of 36.6%.
  • Operating income for the second quarter of 2011 was $26.5 million, compared to $15.8 million in the second quarter of 2010.
  • Net income was $16.6 million, or $0.33 per fully diluted share, for the second quarter of 2011 compared to $8.5 million, or $0.18 per fully diluted share, in the second quarter of 2010.
  • Adjusted EBITDA4 for the second quarter of 2011 was $38.4 million, compared to $25.3 million in the second quarter of 2010. Adjusted EBITDA margin for the second quarter of 2011 was 37.9%, compared to 33.9% in the second quarter of 2010.
  • Free cash flow5 totaled $27.1 million for the second quarter of 2011 compared to $14.4 million for the second quarter of 2010.
  • Cash and cash equivalents totaled $71.0 million as of June 30, 2011.
Recent Business Highlights
  • Extended relationship with NBC for the third season of the "Who Do You Think You Are?" television series in the U.S; in addition, NBC is currently re-airing episodes from season 2.
  • Addition of several new important content collections, including U.S. Navy Cruise Books, Sons of the American Revolution membership applications, vital records from Liverpool, Dorset and West Yorkshire, England and church books from Brandenburg, Germany from 1700-1874.
  • Multiple product releases, including New Web Search to provide easy access to additional content on the internet, as well as improvements to our new user conversion experience.
Business Outlook

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

Third Quarter 2011
  • Revenues in the range of $102.0 to $104.0 million
  • Adjusted EBITDA in the range of $38.0 to $40.0 million
  • Ending subscribers of approximately 1,700,000
Full Year 2011
  • Revenues in the range of $398.0 to $402.0 million (increased from the previously expected range of $395.0 to $400.0 million)
  • Adjusted EBITDA in the range of $140.0 to $144.0 million (increased from the previously expected range of $135.0 to $140.0 million)
  • Ending subscribers of approximately 1,710,000 to 1,730,000 (unchanged from the previously expected range)
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 877-627-6544 (within the United States), or 719-325-4821 (international callers) approximately ten minutes prior to the start time.

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 net income, the most directly comparable GAAP measure, 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 1.7 million paying subscribers. More than 7 billion records have been added to the site in the past 14 years. Ancestry users have created more than 26 million family trees containing over 2.6 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.