LOOPNET, INC. Reports Operating Results (10-Q)

Author's Avatar
Apr 27, 2012
LOOPNET, INC. (LOOP, Financial) filed Quarterly Report for the period ended 2012-03-31.

Loopnet Inc has a market cap of $673.5 million; its shares were traded at around $19.19 with a P/E ratio of 76.4 and P/S ratio of 7.8.

Highlight of Business Operations:

We own and operate the leading online marketplace for commercial real estate in the United States, based on the number of monthly unique visitors to our marketplace, which averaged approximately 2.1 million per month during the first quarter of 2012, compared with approximately 2.0 million per month during 2011, and 1.5 million per month during 2010, as reported by comScore Media Metrix. comScore Media Metrix defines a unique visitor as an individual who visited any content of a website, a category, a channel, or an application. Our online marketplace, available at www.LoopNet.com, enables commercial real estate agents, working on behalf of property owners and landlords, to list properties for sale or for lease and submit detailed information on property listings including qualitative descriptions, financial and tenant information, photographs and key property characteristics, in order to find a buyer or tenant. Commercial real estate agents, buyers and tenants use the LoopNet online marketplace to search for available property listings that meet their commercial real estate criteria. We offer two types of memberships on the LoopNet online marketplace. Basic membership is available free-of-charge, and enables members to experience some of the benefits of the LoopNet offering, with limited functionality. LoopNet premium membership is available for a monthly subscription fee and provides enhanced marketing exposure for property listings and full access to LoopNet property listings, as well as numerous other features. The minimum term of a premium membership subscription is one month. Premium membership service remains the largest revenue contributor to our business and accounted for 64% of our revenues in the first quarter of 2012, compared with 66% in 2011 and 71% in 2010, reflecting changing market conditions, as well as our ongoing efforts to expand and develop our business beyond our core marketplace services.

Our registered members have grown to approximately 5.8 million as of March 31, 2012, from approximately 5.5 million as of December 31, 2011, and 4.6 million as of December 31, 2010. The number of monthly unique visitors to our marketplace averaged approximately 2.1 million in the first quarter of 2012. Our premium members were 75,829 as of March 31, 2012, compared to 73,550 as of December 31, 2011, and 68,608 as of December 31, 2010. The average monthly subscription price paid by our premium members was $65.59 in the first quarter of 2012, compared to $66.39 in 2011, and $66.59 in 2010. Our average monthly cancellation rate in the first quarter of 2012 fell within the 4.5% to 6.5% range we began seeing in late 2007. We believe the higher cancellation rate seen in the last several years is primarily the result of a significant slow-down in transaction activity in the commercial real estate industry that began in the fourth quarter of 2007, due to deteriorating economic conditions and due to the credit crunch impacting the availability and cost of debt capital for real estate transactions. Premium membership fees have driven the majority of our growth in revenues since 2001 and were the source of approximately 64% of our revenue in the first quarter of 2012, compared to 66% of our revenues in 2011, and 71% in 2010. The number of listings on our marketplace has increased to 826,765 as of March 31, 2012, from 820,391 as of December 31, 2011, and 788,330 as of December 31, 2010. The number of property profiles that were viewed by visitors of LoopNet grew to 112.8 million in the first quarter of 2012, compared to 76.5 million in the first quarter of 2011. The number of unique paying subscribers to one or more of our commercial real estate related products and services (i.e. Premium Membership, Property Comps, Property Facts, Professional Profile, LandsofAmerica, and LandAndFarm) was 97,944 as of March 31, 2012, and the average monthly revenue per unique paying subscriber during the period ending March 31, 2012 was $60.19.

We derive the substantial majority of our revenues from customers that pay monthly fees for a suite of services to market and search for commercial real estate and operating businesses. The fee for our LoopNet premium membership averaged $65.59 per month during the first quarter of 2012, compared to $66.39 per month during 2011, and $66.59 during 2010. The minimum term of a premium membership subscription is one month. We also offer quarterly and annual memberships which are priced and discounted accordingly, and paid in advance for the subscription period. A customer choosing to cancel a discounted annual or quarterly membership will receive a refund based on the number of months the membership was used and charging the customer at the monthly rate rather than at the discounted quarterly or annual rates.

We also generate revenue from Property Comps, by charging a flat monthly fee to access our database of recent commercial real estate transactions or a per transaction fee for individual transactions; Property Facts, for which we charge a flat monthly fee to access our database of commercial property information or a per property record fee for individual property record purchases; LoopLink, which we license to commercial real estate brokerage firms who pay a monthly, quarterly or annual fee; and, BizBuySell and BizQuest, for which we charge a flat monthly fee for business brokers to market their listings or a per listing fee for owners to market their own listings. Revenues from other sources include advertising and lead generation revenues from both our LoopNet and business-for-sale marketplaces, which are recognized ratably over the period in which the advertisement is displayed, provided that no significant obligations remain and collection of the resulting receivable is probable. Advertising rates are dependent on the services provided and the placement of the advertisements. To date, the duration of our advertising commitments has generally averaged two to three months.

Read the The complete Report