http://www.snap-interactive.com () —
SNAP Interactive, Inc. ("SNAP" or the "Company") (OTCBB: STVI), a leading provider of online dating applications for social networking websites, today announced operating results for the quarter ended March 31, 2010.
(A comprehensive description of results follows below.)
"Q1 2010 was our first full quarter since the implementation of our subscription model on the AreYouInterested.com online dating (http://www.areyouinterested.com) brand and we're extremely encouraged by our results," stated SNAP President and CEO Clifford Lerner. "We experienced a month-to-month increase in average daily gross cash receipts from premium and subscription sales in each month during the quarter and overall gross cash receipts in excess of $1,300,000 for the quarter. Due to our revenue recognition policy, which requires us to recognize revenue over the term of a user's subscription period, our gross cash receipts exceeded revenue during the quarter, which caused an increase in deferred revenue as we continue to ramp up our subscriptions. We also began aggressively buying traffic to target new users with our objective being to convert these users into paying subscribers over time. We anticipate further revenue growth as recurring revenue from our 3 and 6 month subscriptions kick in as we move toward the middle of 2010."
Due to GAAP accounting, revenues from multi month subscriptions are recognized over the length of the subscription term rather than when purchased. Because the majority of our subscription sales occurred from subscriptions with a term of three or six months, we apportion that revenue over the duration of the subscription term even though it is collected in full at the time of purchase. As a result, a portion of the gross cash receipts from subscription purchases may not be recognized in the quarter in which the subscription was actually purchased. The difference between the gross cash receipts collected and the recognized revenue from those sales during that reporting period per our financials will appear as deferred revenue. As of March 31, 2010 this deferred revenue amount was $604,531.
Comprehensive Operational Results Description
Revenues Revenue increased from $768,972 for the three months ended March 31, 2009 to $927,436 for the three months ended March 31, 2010, an increase of $158,464. The revenues generated during 2009 were primarily from advertising revenue. Our 2010 revenue is primarily generated from premium features placed on our various applications as well as subscription fees for subscriptions to our AreYouInterested (http://www.areyouinterested.com) ? application on Facebook. The increase in revenue for the three months ended March 31, 2010 was primarily due to the revenue produced by the implementation of subscriptions on our Are You Interested brand.
Net Income Net income decreased to a net loss of $803,449 for the three months ended March 31, 2010 from net income of $66,472 for the three months ended March 31, 2009, a decrease of $869,921. The decrease in net income and shift to a net loss was primarily due to the revenue recognition impact of our shift to a subscription model in which revenue is recognized on a deferred basis when subscriptions occur over more than a single month as well as increased user acquisition costs associated with the shift to a subscription model on the Are You Interested. Advertising and marketing expense for the three months ended March 31, 2010 was $829,416. These expenses were minimal for the three months ended March 31, 2009 and were not recognized independently. The increase in advertising and marketing expense is primarily due to the shift to a subscription based model and the associated user acquisition costs.
To view the entire 10-Q filing please visit: http://www.sec.gov/Archives/edgar/data/1355839/00012139001000199 /00 01213900-10-001992-index.htm (http://www.sec.gov/Archives/edgar/data/1355839/0001213900100019 2/0 001213900-10-001992-index.htm)
About SNAP Interactive, Inc. Incorporated in Delaware and headquartered in New York City, SNAP Interactive, Inc. is a leading provider of online dating applications for social networking websites and mobile platforms. SNAP has developed two dating applications built on Facebook Platform which have more than 19 million installations on Facebook. SNAP has also launched dating applications on MySpace Developer Platform, Bebo, and Hi5 Developer Platform. SNAP's portfolio also includes the AreYouInterested.com online dating site (http://www.areyouinterested.com) for singles (http://www.areyouinterested.com/) that utilizes Facebook Connect to share content with their Facebook friends and an iPhone (http://www.areyouinterested.com/iphone) application for mobile dating called AreYouInterested?. For more information visit www.snap-interactive.com (http://www.snap-interactive.com) .
Facebook@ is a registered trademark of Facebook Inc. iPhone is a trademark of Apple Inc.
Forward-Looking Safe Harbor Statement: This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the near future. There are a number of factors that could cause actual results and developments to differ materially from forecasted results. These risks and uncertainties include our ability to: attract members; convert members into paying subscribers and retain our paying subscribers; our ability to successfully implement our current long-term growth strategy; as well as product demand, market competition, fluctuations in advertising payouts, reliance on credit card processors and related necessary merchant account approvals, delays in website & application development, technical issues beyond our control, reliance on the various platforms that we build applications on, and risks inherent in our operations. For a discussion of these risks and uncertainties, please see our filings with the Securities and Exchange Commission. Our public filings with the SEC are available from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov (http://www.sec.gov) .