LivingSocial Announces Preliminary FY 2013 Results

WASHINGTON, January 31, 2014 — LivingSocial announced today preliminary results for Q4 2013 and FY 2013, including an uplift in FY 2013 operating EBITDA (OEBITDA), an improvement of 78 percent as compared to FY 2012, from a loss of $109 million to a loss of $24 million. Total annual revenue for FY 2013 was $399 million, a decrease of 12 percent from FY 2012, due largely to a reduction in customer acquisition spend.

Revenue for the fourth quarter of 2013 was approximately $94 million, an increase of three percent over the third quarter of 2013 and OEBITDA for the same period came in at a loss of $4 million. LivingSocial’s OEBITDA for the first half of 2013 totaled a loss of $17 million and improved by 59 percent for the second half with the loss decreasing to $7 million.

During the same period, LivingSocial also realized an improvement in operating costs of 22 percent over the third quarter 2013. The fourth quarter included LivingSocial’s largest revenue day in company history on CyberMonday, as well as LivingSocial’s biggest net billings week including Black Friday through Cyber Monday. Further, LivingSocial’s Black Friday through Cyber Monday mobile revenue was up by 102 percent over 2012.

For the first time, the results reflect LivingSocial’s Korean business as discontinued operations (removing all of Ticket Monster’s revenue and expenses from continuing operations for current and prior periods), following the sale of that unit as announced in November 2013. LivingSocial’s estimated net loss for the fourth quarter was $82 million and included one-time non-cash items associated with the sale of Ticket Monster, such as share-based compensation, and also includes impairment charges related to other overseas investments.

The sale of Ticket Monster and the improvement of the LivingSocial cost base reflect ongoing strategic corporate initiatives designed to refocus the company on becoming the preferred marketing partner for merchants of all sizes.

“LivingSocial is moving away from areas that are no longer core to our strategy of being a marketing partner for merchants. This includes the few remaining events that we had produced on our own in cities across the U.S. and those at our 918 F Street venue,” said John Bax, CFO of LivingSocial. “LivingSocial’s 918 F Street will continue to operate until all scheduled classes have concluded and while no events will be cancelled we will not feature any new events produced by LivingSocial.”

Bax continued, “Like most companies, LivingSocial constantly evaluates the growth potential and strategic alignment of all our initiatives. We are clear that we operate most effectively as a marketing partner for third parties. In 2014, we are reinvesting in our customer acquisition and marketing to aggressively target our high value consumers and to build robust tools for our merchant partners. This is essential to meet our customers’ needs and grow our business.”

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