Spark (LOV) shares are off 22% to $4.51 in early Thursday trading after the company said 2014 could be a tough year for its ChristianMingle and JDate websites.
Spark said fourth-quarter revenue grew 6% to $17.2 million and full year revenue rose 12% to $69.4 million, while 2013 losses shrank to $3.5 million from $10.5 million in 2012.
CEO Greg Liberman said many first-timers in the dating pool let their subscriptions lapse in the third and fourth quarters.
"The more subscriptions to lapse in any period, the more first time subscribers and win backs we need to add to replace them just to maintain our subscriber base,'' says Liberman said.
ChristianMingle has grown from about 25,000 subscribers in 2010 to over 115,000 in 2013. But it will likely have slower 2014 growth as Spark pulls back advertising and marketing spending.The company gave no guidance on subscriber growth.
"We're pivoting a little bit here and focusing on profitability,'' Liberman said.
Spark Networks had about 298,000 paying subscribers in 2013, up 15% over 2012. But it face stiff competition from IAC/Interactive's Match.com and OkCupid, Craigslist and other websites.
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Spark has been a heartbreak for investors. With Thursday's losses, shares are down more than 50% from its May 2013 high.
The company is in a proxy fight with investment firm Osmium Partners, which has a14% stake in the company and is proposing a slate of directors.
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