ServiceMagic 2014 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2014 ServiceMagic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

Table of Contents
Depreciation
For the year ended December 31, 2014 compared to the year ended December 31, 2013
Depreciation in 2014 increased from 2013 due to acquisitions and the incremental depreciation associated with capital expenditures, partially
offset by certain fixed assets becoming fully depreciated and the inclusion in the prior year of the write-off of $2.7 million in capitalized software
costs at The About Group primarily related to projects which commenced prior to its acquisition.
For the year ended December 31, 2013 compared to the year ended December 31, 2012
Depreciation in 2013 increased from 2012 due to the incremental depreciation associated with capital expenditures, various acquisitions and
the write-off of $2.7 million in capitalized software costs at The About Group described above, partially offset by certain fixed assets becoming
fully depreciated.
Adjusted EBITDA
Refer to Note 13 to the consolidated financial statements for reconciliations of Adjusted EBITDA to operating income (loss) by reportable
segment.
For the year ended December 31, 2014 compared to the year ended December 31, 2013
Search & Applications Adjusted EBITDA decreased 6% to $362.0 million , primarily due to the lower revenue noted above, increases in
selling and marketing expense and general and administrative expense and losses related to the acquisition of SlimWare, partially offset by the
move of CityGrid from the eCommerce segment to the Search & Applications segment, a decrease in cost of revenue and the contribution from the
acquisition of the ValueClick O&O website businesses. The loss from SlimWare was due to the write-off of $11.0 million of deferred revenue in
connection with its acquisition on April 1, 2014. The increase in selling and marketing expense was primarily due to an increase in online
marketing related to our B2C downloadable applications and About.com. The increase in general and administrative expense was primarily due to
increases in compensation and professional fees. The decrease in cost of revenue was primarily due to a decrease in traffic acquisition costs driven
from lower revenue from our B2B operations.
The Match Group Adjusted EBITDA decreased 1% to $264.7 million despite higher revenue noted above, primarily due to losses related to
The Princeton Review and FriendScout24 acquisitions and higher cost of revenue, selling and marketing expense and general and administrative
expense. The losses from The Princeton Review and FriendScout24 were due to the write-off of $11.8 million of deferred revenue in connection
with these acquisitions. The increase in cost of revenue was primarily due to increases in revenue share payments made in connection with in-app
purchases sold through Dating's mobile products and hosting fees. The increase in selling and marketing expense was primarily due to an increase
in offline and online marketing. The increase in general and administrative expense was primarily due to an increase in compensation, partially
29
Years Ended December 31,
2014
$ Change
% Change
2013
$ Change
% Change
2012
(Dollars in thousands)
Depreciation $61,156
$2,247
4%
$58,909
$6,428
12%
$52,481
As a percentage of revenue 2%
2%
2%
Years Ended December 31,
2014
$ Change
% Change
2013
$ Change
% Change
2012
(Dollars in thousands)
Search & Applications
$
362,029
$
(23,822
)
(6
)%
$
385,851
$
57,710
18
%
$
328,141
The Match Group
264,736
(2,213
)
(1
)%
266,949
30,171
13
%
236,778
Media
(36,720
)
(19,744
)
(116
)%
(16,976
)
21,579
56
%
(38,555
)
eCommerce
17,282
(5,608
)
(25
)%
22,890
(8,310
)
(27
)%
31,200
Corporate
(63,251
)
(2,840
)
(5
)%
(60,411
)
(292
)
—
%
(
60,119
)
Total
$
544,076
$
(54,227
)
(9
)%
$
598,303
$
100,858
20
%
$
497,445
As a percentage of revenue 17%
20%
18%