Summer 2021 | NYSE American: LOV - Spark Networks
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Summer 2021 | NYSE American: LOV
Safe Harbor Statement
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
statements involving known and unknown risks, uncertainties, and other factors that may cause Spark Networks’ performance or achievements to be materially different from those of any expected future
results, performance, or achievements.
Any statements in this presentation that are not statements of historical fact may be considered to be forward-looking statements. Written words, such as “believes,” “hopes,” “intends,” “estimates,” “expects,” “projects,”
“plans,” “anticipates,” and variations thereof, or the use of future tense, identify forward-looking statements. 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. These forward looking statements include statements regarding the significant online dating market opportunity; the clear competitive differentiation of
Spark Networks; Spark Networks’ 2020 priorities with respect to product innovation, marketing, operational efficiencies and capital structure including its exploration of debt alternatives; the cost and marketing synergies
of the Zoosk acquisition; the timing of the Spark App launch; the focus on profitability of existing channels and adding/scaling new marketing channels and tactics; the timing of the integration of the Zoosk technology
function; Spark Networks’ overall objectives with respect to stabilizing the topline, increasing profitability, preparing for growth and investor communications; guidance on 2020 total revenue and Adjusted EBITDA; Spark
Networks’ highly leverageable business model; the consolidating sector providing significant advantages to larger players; Spark Networks’ commitment to optimizing operations and its strong financial model with high
cash-flow and recurring revenue; Spark Networks’ low infrastructure costs and capital expenditures relating exclusively to technology investments; Spark Networks’ focus and management outlook for 2020 including driving
product innovation, improving and scaling marketing, running cost effective operations and enhancing Spark Networks’ capital structure to allow for further acquisitions in the future; and any statements or assumptions
underlying any of the foregoing
There are a number of factors that could cause actual results and developments to differ materially, including, but not limited to, the following; the risk that the benefits, including expected cost synergies, from the acquisition
of Zoosk, Inc. may not be fully realized or may take longer to realize than expected; risks related to the degree of competition in the markets in which Spark Networks operates; risks related to our ability to stabilize our
business; risks related to our ability to achieve our financial projections or estimates including with respect to Adjusted EBITDA; risks related to the ability of Spark Networks to retain and hire key personnel, operating results
and business generally; Spark Networks’ ability to continue to control costs and operating expenses; Spark Networks’ ability to achieve intended cost savings; the ability to promptly and effectively integrate the businesses
of Spark Networks SE and Zoosk, Inc.; Spark Networks’ ability to generate cash from operations, Leverage Existing Databases and Social Channels to Broaden Distribution: raise outside capital and to repay debt as it
comes due; Spark Networks’ ability to introduce new competitive products and the degree of market acceptance of such new products; the timing and market acceptance of new products introduced by Spark Networks’
competitors; identify potential acquisitions; successfully integrate acquired businesses and the ability of acquired businesses to perform as expected; Spark Networks’ ability to maintain strong relationships with branded
channel partners; changes in Spark Networks’ share price due to broader stock market movements and the performance of peer group companies; enforce intellectual property rights and protect their respective intellectual
property; comply with new and evolving regulations relating to data protection and data privacy; general competition and price measures in the market place; risks related to the duration and severity of COVID-19 and
its impact on Spark Networks’ business; the effects of shelter-in-place orders on Spark Networks’ business and the online dating industry; the impact of COVID-19 on the U.S. and global economies and financial markets;
and general economic conditions. Additional factors that could cause actual results to differ are discussed under the heading “Risk Factors” in Spark Networks’ Annual Report on Form 20-F for the year ended December 31,
2019 and in other sections of Spark Networks’ filings with the Securities and Exchange Commission (“SEC”), and in Spark Networks’ other current and periodic reports filed or furnished from time to time with the SEC. All
forward-looking statements in this presentation are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-
looking statement except as required by law.
spark Summer 2021 | 2
Social dating for Meaningful relationships Social Meaningful Augmenting traditional dating Primarily focused on the 40+ seeking experience with social features long term relationships
Spark Has Great Assets
40+ Dating Faith-based Dating
+
Over 30% market share of 45+ dating, the market with Most recognizable faith-based dating
the highest growth-rates brands worldwide
spark Summer 2021 | 4
In a large &
growing $5.7B 7%
market…
Online Dating market “Meaningful” segment
revenue in 2020 CAGR with 2.3B
revenue
2M 30%
Annual US growth Spark's market
rate of people aged 45+ share in 45+
Only 1/5 45+ singles use online dating vs 2/5 singles overall
Summer 2021 | 5
Social Discovery; an informal way of meeting people online.
…further Augmented by social functionality,
augmented by online dating TAM could eventually double
Social Discovery TY PES O F SO CIAL DISCO VERY
market
Livestreams Events Messaging
A.I. Matchmaking Movie Night Games
BRANDS IN THE SPACE
*Match’s $1.7 billion acquisition, Hyperconnect
6
Limited Competition
Consolidated Sector – only 4 scaled players with ability to create local user concentration at national level
Summer 2021 | 7
Subscription Revenue
• High visibility 1-9 months increments
• Returning customers with low CAC
Attractive Business
Model
Economies of Scale & Scope Asset Light
• Favorable Working Capital Dynamics
• Cross-portfolio Marketing Optimization
(29 days AP, 9 days AR)
• One team that builds shared tech infrastructure
• Low Cap Ex
spark Summer 2021 | 8
Multiple Growth Levers
Spark has several drivers to capture growth
Large growing Emerging Large Social Product and App penetration
TAM ($5.7B+) Discovery Conversion
+ Ancillary Revenue enhancements
spark Summer 2021 | 9
Strong Financial Trajectory
Revenue +38% 233
Revenue CAGR: 30%
Adjusted EBITDA
171
USD millions
+46%
+24% 114
+14% 97
81
Adjusted
EBITDA CAGR: 53%
38
11 10
7 5
2016 2017 2018 2019 2020
spark Summer 2021 | 10Increasing Registrations & Paying Subscribers
Total Registrations
Total Avg. Paying Subscribers
Registration CAGR of 21%
14.8M
12.7M
10.1M Avg. Paying Subscribers
CAGR: 32%
8.5M
6.9M .9M
.7M
.5M
.4M
.3M
2016 2017 2018 2019 2020
spark Summer 2021 | 11Proven Execution
After successful executive handover
Management team has Successfully transitioned 18% H2 2020 US growth Zoosk turnaround from 10-
exceeded and raised to U.S. domestic filer of our top 3 brands (Silver 15 topline decline in 2019
fiscal guidance since Singles, Elite, Christian to organic growth by end
2019 Mingle) of 2021
spark Summer 2021 | 12Strong Leadership Team
Eric Eichmann Gitte Bendzulla Tobias Plaputta
Chief Executive Officer COO & Chief Legal Officer Chief Technology Officer
Seasoned Global Tech CEO Experienced executive with track record 10+ years of experience with Spark Products
20+ years in consumer and ad tech of compliance and growth Successfully led development of innovative dating
apps
Kirill Priyatel David Yarus
Chief Commercial Officer Head of Brand
JSwipe Founder
Deep online dating industry experience
Senior creative and marketing executive
Strong strategic and product leader
spark Summer 2021 | 13Potential for Appreciation
Product Improvements
Social Functionality Investor Room for growth
& Innovation
Transparency $38 B
Aesthetics refresh Livestreaming video Domestic Filer
CRM tool migration Great online social dates Increased Outreach $7B
$200 M
Price/CRM/Funnel optimization Increased user engagement MTCH BMBL LOV
spark Summer 2021 | 14Portfolio Rebrand
Current Refresh
spark Summer 2021 | 15Portfolio Rebrand spark Summer 2021 | 16
Q3 livestreaming on Zoosk
• New ways for singles to connect
• Community of streamers and viewers sending
virtual gifts and video chatting
spark Summer 2021 | 17Spark is a Value Outlier
(in USD thousands) SPARK BUMBLE MATCH
Revenues $ 233M $ 582M $ 2,344M
Adjusted EBITDA $ 38M $ 153M $ 897M
Direct Marketing Expense $ 115M $ 147M $ 439M
Enterprise Value $ 297M ~7B ~38B
EV / (Marketing + EBITDA) 2X 24X 31X
Paying Users 928,000 2,500,000 10,900,000
Monthly ARPU 20.93 18.89 18.8*
EBITDA Multiple 5X 42X 42X
Revenue Multiple >1X 11X 16X
spark * Match Metric is ARPPU (Average Revenue Per Paying User. Their true ARPU is $0.62 Summer 2021 | 182021 Strategic Priorities
Product Improvements Organic Growth
• Top-line growth since 2014
• 2021 revenue expected to surpass 2020
• Zoosk expected to begin growing organically in 2021
Social Discovery Domestic Filing Status
• Livestreaming video launch Q3 2021
spark Summer 2021 | 19Investment
Highlights
• Well positioned to capture large and growing TAM
• One of 4 large players with significant scale advantages
in consolidated sector
• Strong financial asset light model with scale economies
and subscription revenue
• Multiple growth levers from product, marketing and
emerging social discovery category
• Domestic filer starting in 2021 provides more investor transparency
spark Summer 2021 | 20Contact Us
Spark Networks SE
Chris Camarra, VP of Investor Relations
Christopher.camarra@spark.netYou can also read
