EFTA01378014.pdf

Years ended December 31, 2013 2014 % change (dollars in thousands, except ARPPU) Direct Revenue: North America $ 493,729 $ 525.928 6.5% International 260,340 273599 5.1% Total Direct Revenue 754,069 799,527 6 0% Indirect Revenue 34,128 36.931 8.2% Total Dating Revenue 788,197 836.458 6.1% Non dating Revenue 14,892 51,810 247.9% Total Revenue $ 803,089 $ 888,268 10.6% Percentage of Total Revenue: Direct Revenue: North America 61.5% 59.2% International 324% 30.8% Total Direct Revenue 93.9% 90.0% Indirect Revenue 4 2% 4.2% Total Dating Revenue 98.1% 94.2% Non-dating Revenue 19% 5.8% Total Revenue 1000% 100.096 Average PMC: North America 2.169 2.404 10.8% International 1.020 1,097 7.5% Total 3.189 3.501 9.8% ARPPU: North America $ 0.62 $ 0.60 (3.9%) International 0.70 $ 0.68 (2.3%) Total $ 0.65 $ 0.63 (3.4%) Revenue increased $85.2 million, or 10.6%. in 2014 versus 2013. North America Direct Revenue grew by $32.2 million, or 6.5%, in 2014 versus 2013, driven by 10.8% growth in Average PMC. partially offset by a 3.9% decline in ARPPU. Average PMC growth was driven by a strong increase in beginning PMC and strong new user growth, partially offset by mix shift to brands where a lower percentage of new users become paid members. ARPPU decreased due to mix shifts to lower rate brands as well as a decline in mix-adjusted rates. International Direct Revenue grew by $13.3 million, or 5.1%, in 2014 versus 2013, driven by 7.5% growth in Average PMC, partially offset by a 2.3% decline in ARPPU. Average PMC growth was driven by a strong 75 Table of Contentc increase in beginning PMC, the acquisition of FriendScout24 and growth in new users, partially offset by mix shift to brands where a lower percentage of new users become paid members. ARPPU decreased due to mix shift to lower rate brands, partially offset by mix-adjusted rate increases. Non-dating revenue grew $36.9 million, or 247.9%. as a result of our acquisition of The Princeton Review in August 2014. Cost of revenue (exclusive of depreciation) Years ended December 31, 2013 2014 % change (dollars In thousands) Cost of revenue $ 85,945 $ 120,024 39.7% Percentage of revenue 10.7% 13.5% Cost of revenue increased $34.1 million, or 39.7%. in 2014 versus 2013. Dating cost of revenue increased $16.0 million, or 20.4%, meaningfully more than the growth in revenue driven primarily by a significant increase in in-app purchases given that our native mobile apps were largely introduced in the second quarter of 2014, as well as higher hosting fees driven by growth in users and product features. Non-dating cost of revenue increased $18.0 million, or 250.6%. driven by the acquisition of The Princeton Review, for which cost of revenue represents a meaningfully larger percentage of revenue than in Dating. Selling and marketing expense Years ended December 31, http: sec.govAn:Itives data/157518910M 0474691500643112226458^-lahlnifI Pter20139:21:I7 AMJ CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0075174 CONFIDENTIAL SONY GM_00221358 EFTA01378014