MatchNet plc, one of the largest providers of personal ad worldwide, today reported results for the three and nine month periods ending September 30, 2003. Revenues for third quarter 2003 were $9,274,089 compared to $8,725,666 in the second quarter 2003, an increase of 6%. The growth in revenue is attributed to a 6% increase in total personal ad subscribers, to 134,189 from 126,792 in the prior quarter. Marketing expenses decreased 20% to $3,749,805 compared to $4,670,528 in the prior quarter.
“We are pleased with our consistent track record, delivering MatchNet’s fifth consecutive quarter of revenue growth, stated Joe Shapira, MatchNet’s chairman and chief executive officer. “At the same time we’ve improved marketing efficiencies and lowered the cost of personal ad acquisition, allowing us to reduce our overall marketing expenditures.”
Operating expenses were $6,745,050, or 73% of revenues compared to 3,668,234, or 42% of revenues in the prior quarter. This increase is primarily a result of one time, non-cash charges of $1,780,331 taken during Q3 2003. Net loss for the third quarter 2003 was ($2,531,456), compared to net loss of ($611,560) in the prior quarter, primarily due to the one-time charges discussed above.
“The financial results reflect MatchNet’s strategy to invest heavily in building market share while maintaining a break-even range on a cash flow basis,” continued Shapira. For the nine months ending September 30, 2003, total revenues were $25,361,188, an increase of 124%, compared to $11,304,095 for the nine month 2002 period. Marketing expenses increased to $11,980,065 in the 2003 nine month period compared to $2,635,280 in the 2002 period, an increase of 355%. Operating expenses declined as a percentage of revenues to $13,511,788, or 53% of revenues for the 2003 nine month period, compared to $6,312,709, or 56% of revenues in the same period last year. Net loss was ($3,925,329) for the 2003 nine month period1, compared with net income of $1,390,542 in the same period last year.
Outlook: Management estimates 4th quarter 2003 revenues will grow 25-35% over Q3, to between $11.5 and $12.5 million for the quarter. We estimate revenue for fiscal year 2003 will be in the $37 to $38 million range. Net loss for the 2003 nine month period includes depreciation and amortisation charges of $1,201,033, a $590,839 one time amortization charge related to a change in accounting policy regarding the capitalisation of Bounty Costs, and other one time charges of $1,780,331 during the third quarter 2003.
MatchNet plc is one of the world’s largest providers of online personal ad services and its network includes AmericanSingles.com, FaceLink.com, MatchNet.de, MatchNet.co.uk, and MatchNet.com.au. In addition, the Company operates JDate.com & JDate.co.il, the dominant Jewish personal ad services worldwide; Glimpse.com, an online personal ad community for relationship-minded gay men and women; and CollegeLuv.com, an online destination for the college-age demographic.