Press Releases

ACTIVE Network and Its Products and Services in the News

Active Network to Announce Second Quarter 2011 Earnings Results



August 10, 2011


  • • Quarterly Revenues Increase 21% Year-Over-Year to $99.0 Million
  • • Company Achieves Record Net Income of $5.5 Million
  • • Adjusted EBITDA of $20.4 Million, Up 72% Over the Prior Year Period

SAN DIEGO, Aug 10, 2011 (BUSINESS WIRE) -- The Active Network, Inc. (NYSE: ACTV), the leading provider of organization-based cloud computing applications, today announced its financial results for the second quarter of 2011.

Q2 2011 Financial Highlights:

(All comparisons are made to the second quarter of 2010)

  • • Total net revenue was $99.0 million, up 21% from $81.7 million.
  • • Technology revenue constituted 86%, or $85.6 million of total net revenue, up 20% from $71.2 million.
  • • During the quarter, registrations grew 7% to 22.9 million and net revenue per registration increased 8% to $3.04.
  • • Marketing Services revenue constituted 14%, or $13.5 million of total net revenue, up 28% from $10.5 million.
  • • Gross margin improved 110 basis points to 59.4%.
  • • Income from operations improved to $7.5 million compared to $0.6 million.
  • • Net income improved to $5.5 million compared to a net loss of $1.9 million.
  • • Adjusted EBITDA, a non-GAAP financial measure, grew 72% to $20.4 million, from $11.8 million.
  • • Cash flow from operations was $66.4 million, up 23%, as compared to $54.1 million.
  • • The Company closed the quarter with cash and cash equivalents of $157.5 million.

"We are pleased to report record second quarter results in our initial earnings release as a public Company," said Dave Alberga, CEO of Active Network. "Our record performance was driven by strong registration growth and an increase in revenue per registration as we continue to capitalize on our market opportunity. We have a predictable business model based on recurring revenue from a large and diversified base of organizations, and are continuing to make key investments in our technology platform to help drive future growth. Looking ahead, we are focused on adding more organizations in our existing markets, increasing our customer's online conversion rates and deepening our relationships with existing customers."

"An important profitability milestone was achieved this quarter as we scaled our business to drive record quarterly revenues, the first quarter of positive net income and the highest Adjusted EBITDA to date," explained Scott Mendel, CFO of Active Network. "We performed better than expected during our seasonally strongest quarter, specifically in our higher margin consumer media business. With the proceeds from our offering and positive cash flow, we ended the quarter with a strong balance sheet and $157.5 million in cash and cash equivalents."

Q2 2011 Key Business Highlights:

  • • Active.com, a media property of Active Network, reported more than one million fans and followers across its social channels - up approximately 300% over the past year.
  • • Active.com launched a multi-city expansion of Schwaggle(TM), a comprehensive lead generation program that includes exclusive deals on fitness-related products and services for the active consumer and is one of the first programs to distribute offers through both email and Facebook. Through increasing the number of events utilizing Active Network software solutions, participants increasingly use Active.com to find events and activities to sign up, resulting in more events utilizing the Company's software solution. Schwaggle is an example of how Active Network creates real "network effect".
  • • Active.com announced the launch of its online affiliate program which captures and distributes the most complex directory of activities and events. This program allows online marketers and publishers to earn revenue by directing consumers to register for activities on Active.com and enables Active Network to broaden its audience reach. We have launched this program with key partners, including espnW, ESPN's content and digital business initiative for women, and Shape Magazine.

Business Outlook

For the third quarter of 2011, the Company is targeting total net revenue in the range of $84 million to $88 million, with registrations growth of approximately 5% to 7%, and revenue per registration growth of approximately 6% to 8% over prior year quarter. The Company expects a net loss in the range of $3.5 million to $1.5 million and Adjusted EBITDA in the range of $10 million to $12 million.

Conference Call Information

The Company will host a conference call to discuss second quarter 2011 results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The conference call dial-in number is 866-203-3436 for domestic participants and 617-213-8849 for international participants. A live webcast of the conference call will also be available and can be accessed within the investor relations section of Active Network's corporate website at: http://www.investors.activenetwork.com.

A replay of the call will be available starting at 8:00 p.m. Eastern Time (5:00 p.m. Pacific Time) on August 10, 2011 through 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) on August 12, 2011. To listen to the replay, dial 888-286-8010 (or 617-801-6888 outside of the United States) and use the passcode 5589-3049. The webcast will also be available via webcast within the investor relations section of the company's website at: http://www.investors.activenetwork.com.

About The Active Network, Inc.

The Active Network, Inc. is a leading provider of organization-based cloud computing applications serving diverse market segments including business events, community activities, outdoors and sports. Our technology platform, ActiveWorks(TM), transforms the way organizers manage their activities and events by automating online registrations and streamlining other critical management functions, while also driving consumer participation to their events. Our flagship media property, Active.com, is the leading online community for people who want to discover, participate in, and share activities about which they are passionate. Headquartered in San Diego, California since 1999, the Company has over 25 offices worldwide. To learn more, visit us on the web at http://www.activenetwork.com or http://www.active.com.

Note With Respect to Non-GAAP Financial Measures

In addition to using GAAP financial results, the Company's management measures and reports non-GAAP financial measures, including Adjusted EBITDA, Non-GAAP net income (loss) and Non-GAAP net income (loss) per share. The most directly comparable GAAP financial results for these non-GAAP financial measures are Net income (loss), Net income (loss) and Net income (loss) per share, respectively. Management uses these non-GAAP financial measures to evaluate the Company's performance and operations. Management also uses these non-GAAP financial measures for business planning, to evaluate acquisition opportunities and as a measurement to create incentives and to compensate the Company's management team. In addition, management believes the exclusion or inclusion of certain amounts in calculating these non-GAAP financial measures can provide a useful measure to investors for period-to-period comparisons. These non-GAAP financial measures, however, should be used in addition to, and in conjunction with, the Company's financial results presented in accordance with GAAP. The Company strongly encourages investors to review its financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare the Company's results with other companies' non-GAAP financial measures having the same or similar names. Please see Reconciliation of GAAP to Non-GAAP Results below for a reconciliation of our GAAP to non-GAAP financial measures.

Forward-Looking Statements

The Active Network, Inc. cautions you that the statements included in this press release that are not a description of historical facts are forward-looking statements within the meaning of the federal securities laws. Any such statements are subject to substantial risks and uncertainties, including the Company's ability to generate revenue and control expenses in order to achieve and maintain profitability, the Company's ability to maintain an adequate rate of growth, including growing its registrations and revenue from registrations, and the Company's ability to successfully manage its acquisitions and investments in businesses, applications and technologies, as well as the other risks detailed from time to time in the reports it files with the Securities and Exchange Commission. As a result of these risks and uncertainties, the Company's actual results may differ materially from those expressed in any forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof.

THE ACTIVE NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Net Revenue:
Technology revenue $ 85,553 $ 71,172 $ 148,661 $ 126,104
Marketing services revenue 13,452 10,490 23,056 18,780
Total net revenue 99,005 81,662 171,717 144,884
Cost of net revenue:
Cost of technology revenue 38,707 32,339 71,695 59,374
Cost of marketing services revenue 1,480 1,727 2,642 2,746
Total cost of net revenue 40,187 34,066 74,337 62,120
Gross profit 58,818 47,596 97,380 82,764
Operating expenses:
Sales and marketing 18,914 15,115 35,854 29,758
Research and development 16,377 16,310 32,553 31,352
General and administrative 12,308 11,533 22,896 22,857
Amortization of intangibles 3,718 4,073 7,421 8,120
Total operating expenses 51,317 47,031 98,724 92,087
Income (loss) from operations 7,501 565 (1,344 ) (9,323 )
Interest income 29 42 59 70
Interest expense (1,406 ) (1,450 ) (2,690 ) (2,764 )
Other income (expense), net 193 (244 ) 142 (621 )
Income (loss) before income taxes 6,317 (1,087 ) (3,833 ) (12,638 )
Income tax provision 788 853 1,580 1,708
Net income (loss) 5,529 (1,940 ) (5,413 ) (14,346 )
Accretion of redeemable convertible preferred stock (4,400 ) (6,900 ) (11,810 ) (13,773 )
Net income (loss) attributable to common stockholders $ 1,129 $ (8,840 ) $ (17,223 ) $ (28,119 )
Net income (loss) per share attributable to common stockholders:
Basic $ 0.04 $ (1.26 ) $ (0.96 ) $ (4.16 )
Diluted $ 0.03 $ (1.26 ) $ (0.96 ) $ (4.16 )

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:

Basic 27,269 7,034 17,943 6,765
Diluted 36,877 7,034 17,943 6,765
THE ACTIVE NETWORK, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2011 2010
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 157,507 $ 31,441
Restricted cash 5,000 5,000
Accounts receivable, net 55,706 34,096
Inventories 1,810 -
Prepaid expenses and other current assets 5,048 4,181
Total current assets 225,071 74,718
Property and equipment, net 26,919 28,181
Software development costs, net 42,188 37,013
Goodwill 213,406 207,113
Intangible assets, net 35,162 41,208
Deposits and other assets 2,212 2,315
Total assets $ 544,958 $ 390,548
Liabilities, preferred stock and stockholders' equity (deficit)
Current liabilities:
Accounts payable $ 5,044 $ 5,372
Registration fees payable 99,566 40,667
Accrued expenses 31,715 32,172
Deferred revenue 46,115 34,013
Current portion of debt - 16,866
Capital lease obligations, current portion 1,997 1,983
Other current liabilities 2,564 1,630
Total current liabilities 187,001 132,703
Debt, net of current portion - 27,537
Capital lease obligations, net of current portion 968 1,663
Other long-term liabilities 5,325 4,353
Deferred tax liability 19,703 17,960
Total liabilities 212,997 184,216
Convertible preferred stock - 21,187
Redeemable convertible preferred stock - 371,126
Total preferred stock - 392,313
Stockholders' equity (deficit):
Common stock 55 9
Treasury stock (11,959 ) (11,959 )
Additional paid-in capital 599,171 65,224
Accumulated other comprehensive income 10,038 8,866
Accumulated deficit (265,344 ) (248,121 )
Total stockholders' equity (deficit) 331,961 (185,981 )
Total liabilities, preferred stock and stockholders' equity (deficit) $ 544,958 $ 390,548
THE ACTIVE NETWORK, INC.
SUPPLEMENTARY DATA

(In thousands, except net registration revenue per registration)

(Unaudited)
Operational Data: Three Months Ended Six Months Ended
June 30, % June 30, %
2011 2010 change 2011 2010 change
Net registration revenue $ 69,741 $ 60,561 15% $ 121,174 $ 106,241 14%
Registrations 22,926 21,464 7% 36,857 34,385 7%
Net registration revenue per registration $ 3.04 $ 2.82 8% $ 3.29 $ 3.09 6%
Gross Profit Margin: Three Months Ended % or Six Months Ended % or
June 30, bps June 30, bps
2011 2010 change 2011 2010 change
Total net revenue $ 99,005 $ 81,662 21% $ 171,717 $ 144,884 19%
GAAP gross profit 58,818 47,596 97,380 82,764
Add back: stock-based compensation 39 28 55 54
Add back: amortization 1,433 1,216 2,826 2,478
Add back: depreciation 4,111 2,150 8,073 3,694
Non-GAAP gross profit excluding non-cash items 64,401 50,990 26% 108,334 88,990 22%
Gross profit margin (profit divided by total net revenue):
GAAP gross profit margin 59.4 % 58.3 % 110 bps 56.7 % 57.1 % (40) bps
Non-GAAP gross profit margin excluding non-cash items 65.0 % 62.4 % 260 bps 63.1 % 61.4 % 170 bps
Stock-based compensation: Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Cost of net revenue $ 39 $ 28 $ 55 $ 54
Sales and marketing 576 132 763 256
Research and development 203 138 321 279
General and administrative 1,250 1,106 1,673 2,604
Total $ 2,068 $ 1,404 $ 2,812 $ 3,193
THE ACTIVE NETWORK, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Non-GAAP net income (loss):
GAAP net income (loss) $ 5,529 $ (1,940 ) $ (5,413 ) $ (14,346 )
Add back: stock-based compensation 2,068 1,404 2,812 3,193
Add back: amortization 5,151 5,289 10,247 10,598
Income tax effect (2,527 ) (2,343 ) (4,571 ) (4,827 )
Non-GAAP net income (loss) $ 10,221 $ 2,410 $ 3,075 $ (5,382 )
Non-GAAP net income (loss) per share:
Non-GAAP net income (loss) $ 10,221 $ 2,410 $ 3,075 $ (5,382 )
GAAP basic shares 27,269 7,034 17,943 6,765
Add: preferred stock conversion 20,551 34,632 27,552 34,632
Non-GAAP basic shares 47,820 41,666 45,495 41,397
GAAP diluted shares 36,877 7,034 17,943 6,765
Add: preferred stock and other securities conversion 20,551 38,907 36,754 34,632
Non-GAAP diluted shares 57,428 45,941 54,697 41,397
Non-GAAP net income (loss) per share:
Basic $ 0.21 $ 0.06 $ 0.07 $ (0.13 )
Diluted $ 0.18 $ 0.05 $ 0.06 $ (0.13 )
Adjusted EBITDA:
Net income (loss) $ 5,529 $ (1,940 ) $ (5,413 ) $ (14,346 )
Interest expense, net 1,377 1,408 2,631 2,694
Income tax provision 788 853 1,580 1,708
Depreciation 5,686 4,585 11,261 8,459
Amortization 5,151 5,289 10,247 10,598
Stock-based compensation 2,068 1,404 2,812 3,193
Other expense (income), net (193 ) 244 (142 ) 621
Adjusted EBITDA $ 20,406 $ 11,843 $ 22,976 $ 12,927
THE ACTIVE NETWORK, INC.
FUTURE PERFORMANCE - 3RD QUARTER 2011 OUTLOOK
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands)
Estimated
3rd Quarter 2011
Low End High End
Net loss $ (3,500 ) $ (1,500 )
Interest, taxes & other 900 900
Depreciation & amortization 11,000 11,000
Stock-based compensation 1,600 1,600
Adjusted EBITDA $ 10,000 $ 12,000

SOURCE: The Active Network, Inc.

Active Network
Kristin Carroll, 858-964-3834
Kristin.Carroll@activenetwork.com
or
The Blueshirt Group
Brinlea Johnson, 212-331-8424
Brinlea@blueshirtgroup.com

Upcoming Events

    View All