According to its latest report, Angie’s List in the third quarter saw a net loss of $16.8 million as compared to net income of $0.1 million in 3Q of 2015. This is due to a decline in revenue and an increase in operating expenses over the same time. Additionally, the company’s revenue went down from to $79.7 million from $87.0 million this time last year.
By removing its paywall for new members, the company gained an additional 1.6 million, bringing the total member count to 4.5 million. Membership revenue however, was $13.7 million, down 20% from 2015’s 3Q report of $17.2 million.
The company this year switched from paid to free customer memberships, factoring into the 3Q net loss. The switch has allowed consumers to access its ratings and review for free. Angie’s List made the switch in order to attract more members, hoping that the increase in membership would attract more paid advertising.
In a press release, Scott Durchlag, President and Chief Executive Officer of Angie’s List said:
Our revenue and adjusted EBITDA are down year over year so our financial results are lagging the leading indicators in our operating metrics, as often happens when changing business models. While we’ve previously implemented changes in our cost structure to align it with our new business model, including $10 million in operating expense reductions, we are now able to execute an additional $15 million to $20 million of annualized cost efficiencies and reductions in the fourth quarter that will benefit 2017 and beyond.
