After a tumultuous 2014, Spark Networks has released its first financial report of their 2015 “crawl, walk and run” growth strategy.
In their earnings report for Q1 2015, CEO Michael S. Egan said the company had entered its “walk” phase.
Spark’s revenue for the first quarter of 2015 was $13.5m, a decrease of 19% compared to the year before, and a 5% decrease from the previous quarter.
In terms of breakdown between their two main titles – JDate saw a 13% decrease in revenue, and Christian Mingle a 31% fall.
Spark said this revenue drop was down to a pretty substantial 25% decrease in the number of paying subscribers.
Spark Network’s total number of paying subscribers at the end of Q1 was 213,445 – a drop of 14,429 from the previous quarter.
JDate and Christian Mingle saw a 7% and 5% decrease respectively, compared to the previous quarter.
Since taking over from Greg Liberman, new CEO Michael S. Egan has overseen a massive 47% decrease in direct marketing expenses compared to the year before – dropping to $6.1m – and an 18% drop compared to the previous quarter.
Speaking about the results, Egan said: “Q1 was the first quarter of our ‘walk’ strategy where we began to focus on a series of foundational initiatives aimed at stabilizing our subscriber base and enabling us to become a more nimble, innovative and growth-oriented company by the end of the year.
“We still have considerable work in front of us, but we are very encouraged by what we are seeing so far. On the JDate side we have a clearer picture of what it will take to stabilize the slow decline the brand has experienced over the last two years and have prioritized our core product initiatives accordingly.
“For Christian Mingle we believe we have now entered a phase of equilibrium, where our profitable acquisition marketing strategy has created a more stable base of subscribers. For the remainder of the year we expect Christian Mingle to experience seasonal subscriber count fluctuations, and do not anticipate future periods with significant subscriber declines.”
But although Spark’s net income of $723,000 in Q1 2015 was improved from a loss of $2.9m the year before, it was significantly down from an income of $3.9m in the previous quarter.
The company has wiped out all outstanding debt however, and as of March 31 2015, has cash of $13.5m – an increase of 16% from $11.7m at the end of last year.
Egan also said they had made important marketing hires – including appointing John Volturo as CMO.
Volturo was the founder and CEO of Strategic Mgmt. 360, and served as CMO at Beachmint from 2010 to 2012.
See the full earnings report here.