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SNAP Interactive Reports 79% Increase in Revenue Run Rate Based on December 2009 Gross Receipts(January 26, 2010)
NEW YORK, NY -- (Marketwire) -- 01/26/10 -- SNAP Interactive, Inc. (OTCBB: STVI), a leading provider of online dating applications for social networking websites, is pleased to announce that it has an experienced a significant increase in gross receipts since transitioning to a premium subscription model on its 'Are You Interested?' brand in late 2009.
-- $5.6 million + Annual Revenue Run Rate Based on December 2009 Gross Receipts -- Based on December 2009 Gross Receipts, Annual Run Rate Increases More than 79% over Pre-subscription Revenue Run Rate -- Recurring Revenue from 3 & 6 Month Subscriptions Expected to Propel Further Revenue Growth
For the month of December 2009 our revenue run rate based on gross receipts has increased to more than $5.6 million on an annual basis. This represents an increase of more than 79% from our 2009 revenue run rate of slightly more than $3 million as of September 30, 2009. These sales include gross revenue from the sale of multi month subscriptions as well as advertising revenue. However, from a GAAP accounting perspective revenues from multi month subscriptions are recognized over the length of the subscription rather than when purchased.
SNAP CEO Cliff Lerner stated: "The second half of 2009 was largely devoted to our transition to a subscription-based premium membership model on our 'Are You Interested?' brand. The subscription model has been successful in the online dating industry and we felt that converting to such a model was in our best interests in order for the company to grow and prosper as well as help us meet our objective of becoming less advertising-dependent for revenue generation. Another important change as a result of this transition is that we have now increased our spending on advertising and marketing and this may cause us to operate at a net loss in the near-term while the model ramps up. However based on the initial data that we have seen we are very pleased with the early results from our subscription model."
Lerner continued, "What is perhaps most encouraging about these early results is that these figures do not reflect any projected additional revenue from recurring subscriptions by current subscribers. The recurring revenue component is where the potential from this model becomes most visible and exciting. The majority of our subscription revenue is from users who purchased 3 and 6 month subscriptions. The current data does not reflect any incremental revenue from these users recurring once their initial subscriptions conclude. Clearly each user has a value to us far beyond what is attained from their initial purchase and this additional incremental revenue could be quite substantial. A further benefit of this model is that our revenue stream becomes more stable and allows to us to better forecast our revenues and expenses going forward. We look forward to seeing the full rewards of the subscription model in 2010 as the program continues to ramp up and further optimizations are made."
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 an online dating site for singles called AreYouInterested.com that utilizes Facebook Connect to share content with their Facebook friends and an iPhone application for mobile dating called 'Are You Interested?' For more information visit 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, 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.
SNAP Interactive, Inc.
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