City Paper is not for tourists
It’s never good news when your good news is that you lost $25 million. But that’s the LivingSocial way these days, and today’s third quarter earnings report shows that the company posted a $25 million net loss for the third quarter of 2013—-its best earnings report this year.
The online-coupon company reported $384 million in revenue so far this year, with $120 million of that coming from the third quarter. That’s a 7 percent decrease from quarter No. 2, but the loss is offset by a 7 percent decrease in operating costs this quarter. The company has a total net loss of $107 million for the first three months of 2013, compared to a $516 million net loss for 2012. (Washington City Paper also sells online coupons.)
LivingSocial is not a public company, but Amazon owns 31 percent of it, so its earnings are posted in Amazon’s third quarter earnings.
Two sources within the company told City Desk the news today suggests that some changes to LivingSocial’s business model may be working. (They requested anonymity because of something to do with LivingSocial executives being on a plane.) The company used to offer a single deal available for a day or so on its website, and while it still offers a Daily Deal, it now offers dozen of deals that are available for longer periods of times. “We have introduced some new technology assets, this is some of the innovation that our CEO has been talking about,” one of the sources said. “And at the same time we have really pulled back on our costs. Revenue is down, but we have really fixed the platform to operate in a different way.”
D.C. has a lot of cash riding on the success or failure of LivingSocial. The company’s nearly $33 million in District tax breaks is contingent upon the firm employing 1,000 people in the District by 2015 and hiring 50 additional people per year after that, with half of all new hires required to be D.C. residents. The company must also build a new office in the District of at least 200,000 square feet.
Read the earnings reports below. (LivingSocial’s earnings are on page 15.)