Springleaf Holdings, Inc. (NYSE:LEAF) Q3 2018 Earnings Conference Call Transcript

Nov 06, 2018 • 04:31 pm ET


Springleaf Holdings, Inc. (NYSE:LEAF) Q3 2018 Earnings Conference Call Transcript


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Good afternoon. My name is Jodi, and I will be your conference operator today. At this time, I'd like to welcome everyone to Leaf Group's Third Quarter 2018 Earnings Call.

On the call with me today is Sean Moriarty, CEO; Jantoon Reigersman, CFO; and Shawn Milne, Investor Relations. Shawn Milne, you may begin your conference.

Shawn Milne

On behalf of Leaf Group, welcome to our conference call. I'm pleased to have Sean Moriarty, our Chief Executive Officer; and Jantoon Reigersman, our Chief Financial Officer, on the call with me today. Following the Safe Harbor statement that I will make, Sean will update you on our business, and then Jantoon will provide more details on our quarterly financial performance and key operating metrics.

Any metrics discussed on the call without reference to a specific third-party source are based on our internal data. After the prepared remarks, we will open up the lines for Q&A. You will find a related release along with supplemental materials posted on the Investor Relations section of our corporate website located at ir.leafgroup.com.

(Forward-Looking Cautionary Statements)

I'd like to point out that during the call, we will discuss certain non-GAAP financial measures while talking about the company's financial and operating performance, including adjusted EBITDA and free cash flow. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures can be found in the financial tables included at the end of our press release.

Lastly, I would like to remind everyone that today's conference call is being recorded and that it is also available via webcast through the Investor Relations section of our corporate website. A replay will also be available on our website.

With that, I'll now turn the call over to our CEO, Sean Moriarty.

Sean Moriarty

We appreciate the opportunity to share our third quarter results. Our CFO, Jantoon Reigersman, will follow with more details on our financials.

Q3 marks an important milestone for Leaf Group as we return to profitability on an adjusted EBITDA basis, underscoring our business transformation, setting the stage for driving strong, sustainable revenue growth and significant operating leverage.

We see a long runway for revenue growth and diversification as we offer unique, high-quality products and services to our overall audience, which reaches nearly 1/5 of the U.S. Internet population.

In Q3, Leaf Group delivered 24% top line growth, with revenue of $41.5 million, driven by 53% growth in Media and 10% growth in Marketplaces. We also delivered significant margin improvement with a positive adjusted EBITDA of $0.1 million, a $2 million improvement year-over-year.

Our Media segment delivered significant top line growth and strong operating contribution in Q3. At the same time, we made significant progress integrating Well+ Good's direct sales across Livestrong and other premium sites. This is reflected in our Q3 revenue per visit, which increased 62% year-over-year, primarily driven by our growing direct relationships with advertisers, including Starbucks, Reebok and Chase Sapphire.

To further leverage our strengthening Media brands, in October, we added Michele Calhoun as Senior Vice President of