Friday, July 30, 2010's Second Quarter Results (ACOM) posted their second quarter 2010 financial results yesterday - I read the press release on John D. Reid's blog, Anglo-Celtic Connections, in ACOM (Ancestry) reports positive second quarter first. The press release is here and has more detailed financial information The Ancestry presentation (with graphs) is here and provides more historical context.

Some observations (all mine):

* continues to be profitable (net income of $8.5 million was 11.7% of total revenue of $74.5 million for the second quarter). Profits are good for continued growth and investment in products, content and technology.

* The number of subscribers grew by 8% over the second quarter 2010, to 1,311,000 - that means an increase of about 99,000 persons. However, the number of new subscribers in the quarter was 291,000 persons, which means that they lost about 192,000 previous subscribers in those three months. The average churn rate (the loss of subscribers) was 4.3%, which is slightly increased over the previous quarter.

* The projections for the full fiscal 2010 year are for total subscribers of about 1,370,000, which is only about 60,000 more than at the end of the second quarter. I wonder if the reruns of Who Do You Think They Are? in August and September will give the subscriber a boost?

* In the 2010 second quarter, annual subscribers are 61% of the base, monthly subscribers are 30% and quarterly subscribers are 7%.

* In the first six months of 2010, revenue included $130.1 million from subscriptions and $8.8 million from Product and other revenues (presumably products like Family Tree Maker, MyCanvas and DNA Ancestry).

* In the first six months of 2010, costs included $22.7 million on "costs of subscription revenues" (which probably means providing the website hardware and software) and the cost of Product and other revenues was $2.7 million.

* In the first six months of 2010, has spent $19.9 million on Technology and Development, $46.9 million on Marketing and advertising, and $15.8 million on General and administrative expenses.

* Marketing expense has significantly increased over the past two quarters, but "subscriber acquisition cost" has not increased significantly (now at $74 per new subscriber).

* This is a really interesting company - they have to keep adding to and improving their product to keep existing customers, and they have to keep marketing their product to gain new subscribers to replace the ones that drop their subscriptions.

Disclosure: I am not an employee, contractor, affiliate or shareholder of, although I am a fully paid US Collection subscriber. I am not an expert in financial matters, but am interested in them. The opinions expressed above are all mine.

1 comment:

David said...

> In the first six months of 2010,
> has spent... $46.9
> million on Marketing and
> advertising...

They might want to rethink their marketing budget if the best they can come up with is "you don't have to know what to look for," or whatever the current tag line is from their recent commercials. Plus, doesn't that figure seem high?