Thursday, February 24, 2011

2010 Year Financial Results for Ancestry.com

Ancestry.com has just reported its 2010 financial results in a press release Ancestry.com Inc. Reports 2010 Financial Results on the GeneaPress blog.  There will be an investors telephone call at 2 p.m. PST - see the press release.

Tim Sullivan, Ancestry.com CEO, is quoted saying:

"2010 was a productive and very successful year for Ancestry.com. We drove substantial gains in our subscriber base both domestically and internationally, delivered strong financial results and executed on our plan to position the Company for long-term growth," said Tim Sullivan, Chief Executive Officer of Ancestry.com. "Highlights included investments in our product and our talent base, the completion of three complementary acquisitions, and our highly successful partnership with NBC in bringing Who Do You Think You Are? to the U.S. The hard work will continue in 2011, but we believe these achievements give us a solid foundation for growth in the coming year and beyond."
Some selected financial results:

*  For the full year 2010, total revenue was $300.9 million, an increase of 33.8% over the full year 2009, with Ancestry.com Web site revenue growth of 37.7%.

*  For the full year 2010, operating income was $60.6 million compared to $32.0 million for the full year 2009.

*   For the full year 2010, net income was $36.8 million, or $0.76 per fully diluted share, compared to $21.3 million, or $0.51 per fully diluted share, for the full year 2009.


My comments:

*  Net income was 12.2%, which is healthy.  This is good, because they have resources to continue to advertise, acquire content and provide services.

*  Year-over-year growth in revenues was 33.8%, which includes acquisition of Footnote.com and ProGenealogists.  No information was provided about those properties. 

There are also some interesting statistics:

"- Subscribers totaled 1,395,000 as of December 31, 2010, a 31% increase over the end of 2009 and up modestly since the end of the third quarter of 2010.

"Gross subscriber additions were 203,000 in the fourth quarter of 2010, compared to 165,000 in the fourth quarter of 2009 and 252,000 in the third quarter of 2010.

"Monthly churn[1] was 3.9% in the fourth quarter of 2010, compared to 3.6% in the fourth quarter of 2009 and 4.0% in the third quarter of 2010.

"Subscriber acquisition cost[2] in the fourth quarter of 2010 was $96.87, compared to $85.21 in the fourth quarter of 2009 and $81.58 in the third quarter of 2010.

"Average monthly revenue per subscriber[3] in the fourth quarter of 2010 was $17.78, compared to $16.67 in the fourth quarter of 2009 and $17.75 in the third quarter of 2010."


"Ancestry.com Inc. (Nasdaq:ACOM) is the world's largest online family history resource, with nearly 1.4 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 20 million family trees containing over 2 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."
My takeaways here are:

*  Churn continues at about 4% - that's a 4% loss of subscribers every month, which is overcome by new or returning subscribers.  A 31% increase in subscribers in 2010 is a net of about 330,000 subscribers, or an average of about 27,000 per month.  So they lose an average of 55,000 subscribers each month, but gain 82,000 subscribers per month (my estimates) 

*  Advertising works!  But the breakeven time for a new subscriber is about six months (my guess).

*  The number of online trees (20 million) and profiles (2 billion) is impressive.  Even so, each tree contains an average of only 100 persons.

1 comment:

Joan Miller (Luxegen) said...

The subscriber acquisition costs of
$96.87 are interesting, and higher than I thought they would be. Most of the cost would likely be paid advertising (net, print, tv) There would also be the cost of creating newsletters and other initiatives such as attending conferences in order to stay in touch with potential customers.