10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 001-35339

ANGIE’S LIST, INC.

(Exact name of registrant as specified in its charter)

Delaware	27-2440197
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1030 E. Washington Street Indianapolis, IN	46202
(Address of principal executive offices)	(Zip Code)

(888) 888-5478

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted to its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of registrant’s common stock outstanding as of July 25, 2016 was 58,780,545.

Table of Contents

		Page No.
PART I – FINANCIAL INFORMATION		2
ITEM 1.	Condensed Financial Statements	2
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	32
ITEM 4.	Controls and Procedures	32
PART II – OTHER INFORMATION		33
ITEM 1.	Legal Proceedings	33
ITEM 1A.	Risk Factors	33
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
ITEM 3.	Defaults Upon Senior Securities	34
ITEM 4.	Mine Safety Disclosures	34
ITEM 5.	Other Information	34
ITEM 6.	Exhibits	34
	Signatures	35

PART I – FINANCIAL INFORMATION

ITEM 1.     CONDENSED FINANCIAL STATEMENTS

Angie’s List, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

	June 30, 2016			December 31, 2015
	(Unaudited)
Assets
Cash and cash equivalents	$	34,575		$	32,599
Short-term investments	23,913			23,976
Accounts receivable, net of allowance for doubtful accounts of $2,187 and $1,658 at June 30, 2016 and December 31, 2015, respectively	16,890			17,019
Prepaid expenses and other current assets	18,298			19,026
Total current assets	93,676			92,620
Property, equipment and software, net	84,226			77,635
Goodwill	1,145			1,145
Amortizable intangible assets, net	1,609			2,011
Total assets	$	180,656		$	173,411
Liabilities and stockholders’ equity (deficit)
Accounts payable	$	7,614		$	10,525
Accrued liabilities	29,581			20,287
Deferred membership revenue	29,250			32,702
Deferred advertising revenue	46,462			48,930
Current maturities of long-term debt	—			1,500
Total current liabilities	112,907			113,944
Long-term debt, net	57,950			56,134
Deferred membership revenue, noncurrent	3,108			3,742
Deferred advertising revenue, noncurrent	339			640
Other liabilities, noncurrent	1,152			1,332
Total liabilities	175,456			175,792
Commitments and contingencies (Note 9)	—			—
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value: 10,000,000 shares authorized, no shares issued or outstanding at June 30, 2016 and December 31, 2015	—			—
Common stock, $0.001 par value: 300,000,000 shares authorized, 67,336,563 and 67,162,990 shares issued and 58,777,851 and 58,604,278 shares outstanding at June 30, 2016 and December 31, 2015, respectively	67			67
Additional paid-in-capital	282,233			275,445
Treasury stock, at cost: 8,558,712 shares of common stock at June 30, 2016 and December 31, 2015	(23,719		)	(23,719		)
Accumulated deficit	(253,381		)	(254,174		)
Total stockholders’ equity (deficit)	5,200			(2,381		)
Total liabilities and stockholders’ equity (deficit)	$	180,656		$	173,411

See accompanying notes.

2

Angie’s List, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

	Three Months Ended   June 30,					Six Months Ended   June 30,
	2016		2015			2016		2015
	(Unaudited)					(Unaudited)
Revenue
Membership	$	15,645	$	16,910		$	31,979	$	34,249
Service provider	67,415		70,425			134,937		136,629
Total revenue	83,060		87,335			166,916		170,878
Operating expenses
Operations and support	10,172		15,456			22,381		29,454
Selling	26,983		31,552			54,815		59,844
Marketing	14,432		28,726			33,547		47,555
Product and technology	13,323		9,571			23,357		17,987
General and administrative	11,995		9,586			30,042		18,312
Operating income (loss)	6,155		(7,556		)	2,774		(2,274		)
Interest expense, net	1,352		784			1,968		1,696
Income (loss) before income taxes	4,803		(8,340		)	806		(3,970		)
Income tax expense	6		9			13		19
Net income (loss)	$	4,797	$	(8,349	)	$	793	$	(3,989	)
Net income (loss) per common share — basic	$	0.08	$	(0.14	)	$	0.01	$	(0.07	)
Net income (loss) per common share — diluted	$	0.08	$	(0.14	)	$	0.01	$	(0.07	)
Weighted-average number of common shares outstanding — basic	58,710,321		58,516,677			58,662,100		58,516,677
Weighted-average number of common shares outstanding — diluted	59,643,950		58,516,677			59,637,852		58,516,677

See accompanying notes.

3

Angie’s List, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended   June 30,
	2016			2015
	(Unaudited)
Operating activities
Net income (loss)	$	793		$	(3,989	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	5,254			3,203
Amortization of debt discount, deferred financing fees and bond premium	333			355
Non-cash stock-based compensation	6,718			4,523
Non-cash long-lived asset impairment charge	—			686
Non-cash loss on disposal of long-lived assets	171			279
Changes in certain assets:
Accounts receivable	129			(167		)
Prepaid expenses and other current assets	728			(3,257		)
Changes in certain liabilities:
Accounts payable	(2,542		)	9,918
Accrued liabilities	9,557			10,002
Deferred advertising revenue	(2,769		)	1,962
Deferred membership revenue	(4,086		)	(307		)
Net cash provided by operating activities	14,286			23,208
Investing activities
Purchases of investments	(11,274		)	(9,200		)
Sales of investments	11,320			10,995
Property, equipment and software	(3,208		)	(3,516		)
Capitalized website and software development costs	(8,973		)	(13,849		)
Intangible assets	(129		)	(206		)
Net cash (used in) investing activities	(12,264		)	(15,776		)
Financing activities
Proceeds from exercise of stock options	500			—
Taxes paid on behalf of employees related to net share settlement	(430		)	—
Payments on capital lease obligation	(116		)	(108		)
Net cash (used in) financing activities	(46		)	(108		)
Net increase in cash and cash equivalents	$	1,976		$	7,324
Cash and cash equivalents, beginning of period	32,599			39,991
Cash and cash equivalents, end of period	$	34,575		$	47,315
Supplemental cash flow disclosures
Capital expenditures incurred but not yet paid	$	820		$	1,643

See accompanying notes.

4

Angie’s List, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(in thousands, except share and per share data)

1. Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

Angie’s List, Inc. (collectively with its wholly owned subsidiaries, the “Company”, “we”, “us” or “our”) operates a national local services consumer review service and marketplace where members can research, shop for and purchase local services for critical needs, such as home, health and automotive services, as well as rate and review the providers of these services. Ratings and reviews, which are now available to members free-of-charge, assist members in identifying and hiring a highly-rated provider for their local service needs. The Company's services are provided in markets located across the continental United States.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP were condensed or omitted pursuant to such rules and regulations. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all information and footnotes necessary for fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The accompanying unaudited condensed consolidated balance sheet as of December 31, 2015 was derived from the audited consolidated financial statements as of that date but does not include all disclosures required by U.S. GAAP, including certain notes thereto.

The condensed consolidated financial statements reflect all adjustments of a normal recurring nature considered, in the opinion of management, necessary to fairly present the results for the periods presented. Operating results from interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

For additional information, including a discussion of the Company’s significant accounting policies, refer to the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Operating Segments

Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company manages its business on the basis of one operating segment.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes as well as the disclosure of contingent assets and liabilities and reported revenue and expenses. Actual results could differ from those estimates.

Reclassification of Prior Year Presentation

Certain prior year amounts were reclassified for consistency with the current period presentation, including the marketing compensation and personnel-related costs and general marketing operating expenditures that were moved from general and administrative expense and selling expense to marketing expense within the consolidated statements of operations. These reclassifications did not materially impact the consolidated financial statements.

5

Significant Accounting Policies

As of January 1, 2016, the Company adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Update No. 2015-03: Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, resulting in the Company reclassifying the deferred financing fees previously recorded in other noncurrent assets, including $1,462 as of December 31, 2015, to net long-term debt in the consolidated balance sheets. There were no other material changes to the Company's significant accounting policies from those described in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Income Taxes - Valuation Allowance

The Company evaluates whether it will realize the benefits of its net deferred tax assets and establishes a valuation allowance to reduce the carrying value of its deferred tax assets to the amount considered more likely than not to be recognized. Deferred tax assets arise as a result of tax loss carryforwards and various differences between the book basis and the tax basis of such assets. The Company periodically reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences. Should there be a change in the ability to recover deferred tax assets, the tax provision would be adjusted in the period in which the assessment is changed. There was no change to the Company's assessment during the three or six month periods ended June 30, 2016.

While the Company reported net income for the three and six months ended June 30, 2016, any taxable income for these periods will ultimately be reduced by net operating loss carryforwards. The Company maintains a full valuation allowance against its deferred tax assets, and as a result, there is no federal income tax expense recorded in the condensed consolidated statement of operations for the three and six months ended June 30, 2016.

Contractual Obligations

The Company's contractual obligations primarily consist of long-term noncancellable operating leases expiring through 2021 and long-term debt comprised of a $60,000 term loan scheduled to mature on September 26, 2019. There have been no significant changes in the Company's contractual obligations from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Total combined future minimum payment obligations under long-term noncancellable operating leases amounted to approximately $8,152 as of June 30, 2016, and the Company had $57,950 in outstanding borrowings, net of unamortized deferred financing fees and unamortized fees paid to the lender, under the term loan as of the same date.

Stock-Based Compensation

On June 29, 2016, the Company granted 3,034,329 performance awards of restricted stock units (“PRSUs”) under a long-term incentive plan (the “2016 LTIP”) to its executive officers and other members of the Company’s senior leadership team as of that date. The PRSUs granted are contingent upon the Company’s performance with respect to certain predetermined Total Cumulative Revenue targets over the 33-month period commencing April 1, 2016 and concluding December 31, 2018, subject to the Company's achievement of a predetermined cumulative Adjusted EBITDA threshold over the same time period. The 3,034,329 PRSUs granted represent the number of shares to be issued at the 100% target achievement level for this award. The number of shares ultimately issued could be 0% or range from 75% (threshold achievement level) to 200% (maximum achievement level) of the granted amount based on the Company's performance in relation to the performance conditions, and linear interpolation will be applied should Total Cumulative Revenue fall between the threshold and maximum achievement levels. Any PRSUs earned under the 2016 LTIP will vest in full on May 31, 2019, subject to continued employment as of that date. The Company will recognize stock-based compensation expense for these awards over the vesting period based on the probable achievement of the aforementioned performance conditions as of the end of each reporting period during the performance period and may periodically adjust the recognition of such expense, as necessary, in response to any changes in the Company’s forecasts with respect to the performance conditions. For the three and six months ended June 30, 2016, stock-based compensation expense related to the 2016 LTIP was not material.

6

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No. 2016-13: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The amendments in this update add to U.S. GAAP a current expected credit loss impairment model that is based on expected losses rather than incurred losses, requiring consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. ASU 2016-13 will be effective for the Company in fiscal year 2020, but early adoption is permitted beginning in 2019. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09: Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendments in this update simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 will be effective for the Company in fiscal year 2017, but early adoption is permitted. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases (Topic 842) (“ASU 2016-02”). The amendments in this update require lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. ASU 2016-02 will be effective for the Company in fiscal year 2019, but early adoption is permitted. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01: Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. In particular, the amendments in this update supersede, for public business entities, the requirement to disclose the methods and significant assumptions used in calculating the fair value of financial instruments required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 will be effective for the Company in fiscal year 2018, but early adoption is permitted. The Company does not believe that the adoption of the guidance set forth in this update will have a material impact on the consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09: Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). This update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” This update also requires significantly expanded disclosures related to revenue recognition. ASU 2014-09 will be effective for the Company in fiscal year 2018 following the issuance of Accounting Standards Update No. 2015-14: Deferral of the Effective Date in August 2015, which deferred the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued Accounting Standards Update No. 2016-08: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), amending the principal-versus-agent implementation guidance set forth in ASU 2014-09. Among other things, ASU 2016-08 clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. In April 2016, the FASB issued Accounting Standards Update No. 2016-10: Identifying Performance Obligations and Licensing (“ASU 2016-10”), which amends certain aspects of the guidance set forth in the FASB's new revenue standard related to identifying performance obligations and licensing implementation. In May 2016, the FASB issued Accounting Standards Update No. 2016-12: Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), amending certain aspects of ASU 2014-09 to address implementation issues identified by the FASB's transition resource group and clarify the new revenue standard's core revenue recognition principles. The Company is currently evaluating the future impact and method of adoption of these updates with respect to the consolidated financial statements.

7

2. Net Income (Loss) Per Common Share

Basic and diluted net income (loss) per common share is computed by dividing consolidated net income (loss) by the basic and diluted weighted-average number of common shares outstanding, respectively, for the period. Basic net income (loss) per common share was $0.08 and $(0.14) for the three months ended June 30, 2016 and 2015, respectively, and $0.01 and $(0.07) for the six months ended June 30, 2016 and 2015, respectively. Diluted net income (loss) per common share was $0.08 and $(0.14) for the three months ended June 30, 2016 and 2015, respectively, and $0.01 and $(0.07) for the six months ended June 30, 2016 and 2015, respectively.

The following table shows the calculation of the diluted weighted-average number of common shares outstanding:

	Three Months Ended   June 30,		Six Months Ended   June 30,
	2016	2015	2016	2015
Weighted-average number of common shares outstanding — basic	58,710,321	58,516,677	58,662,100	58,516,677
Total dilutive effect of outstanding equity awards	933,629	—	975,752	—
Weighted-average number of common shares outstanding — diluted	59,643,950	58,516,677	59,637,852	58,516,677

The following potentially dilutive equity awards were not included in the diluted net income (loss) per common share calculation as they would have an antidilutive effect for the periods presented:

	Three Months Ended   June 30,		Six Months Ended   June 30,
	2016	2015	2016	2015
Stock options	7,376,383	7,535,129	7,358,351	7,535,129
Restricted stock units	2,315,818	879,393	2,274,574	879,393
Performance awards of restricted stock units	3,614,784	—	3,631,937	—

The PRSUs granted under the 2016 LTIP were not included in the computation of diluted weighted-average number of common shares outstanding as the number of shares that will ultimately be issued is contingent upon the Company's achievement of certain predetermined performance conditions and does not meet the criteria for inclusion per the applicable U.S. GAAP guidance.

8

3. Fair Value Measurements

Whenever possible, quoted prices in active markets are used to determine the fair value of the Company's financial instruments. The Company's financial instruments are not held for trading or other speculative purposes. The estimated fair value of financial instruments was determined using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may materially impact the estimated fair value amounts.

Fair Value Hierarchy

Fair value is based on the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), the Company categorized the financial assets and liabilities that are adjusted to fair value based on the priority of the inputs to the valuation technique, following the three-level fair value hierarchy prescribed by ASC 820, as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

Level 3: Unobservable inputs that are used when little or no market data is available.

Valuation Techniques

The Company’s money market fund investments, the maturities for which are less than 90 days, are classified as cash equivalents within Level 1 of the fair value hierarchy on the basis of valuations using quoted market prices. Short-term investments consist of certificates of deposit, corporate bonds and U.S. Treasury securities with maturities of more than 90 days but less than one year. As many fixed income securities do not trade daily, fair values are often derived using recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data and industry and economic events. The Company’s fixed income certificates of deposit, U.S. Treasury securities and corporate bond investments with fixed maturities are valued using recent trades or pricing models and are therefore classified within Level 2 of the fair value hierarchy.

9

Recurring Fair Value Measurements

There were no movements between fair value measurement levels for the Company’s cash equivalents and investments in the first six months of 2016 or in 2015, and there were no material unrealized gains or losses as of June 30, 2016 or December 31, 2015.  

The following tables summarize the Company's financial instruments at fair value based on the fair value hierarchy for each class of instrument as of June 30, 2016 and December 31, 2015:

			Fair Value Measurement at June 30, 2016 Using
	Carrying Value at June 30, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	1,099	$	1,099	$	—	$	—
Investments:
Certificates of deposit	17,110		—		17,115		—
U.S. Treasury securities	6,803		—		6,810		—
Total assets	$	25,012	$	1,099	$	23,925	$	—

			Fair Value Measurement at December 31, 2015 Using
	Carrying Value at December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	970	$	970	$	—	$	—
Investments:
Certificates of deposit	19,310		—		19,292		—
U.S. Treasury securities	3,652		—		3,649		—
Corporate bonds	1,014		—		1,013		—
Total assets	$	24,946	$	970	$	23,954	$	—

The Company reviews its investment portfolio for other-than-temporary impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may be impaired, considering such factors as the duration, severity and reason for the decline in value as well as the potential recovery period. During the three and six months ended June 30, 2016 and 2015, the Company did not recognize any other-than-temporary impairment losses.

The carrying amount of the term loan approximates fair value, using Level 2 inputs, as this borrowing bears interest at a variable (market) rate at June 30, 2016 and December 31, 2015.

Non-Recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events, including those described in Note 6, “Goodwill and Amortizable Intangible Assets,” that are adjusted to fair value in certain circumstances when the carrying values are more than the fair values. The categorization of the framework used to price the assets in the event of an impairment is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value.

Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition using Level 2 and Level 3 inputs.

The carrying amounts of accounts receivable and accounts payable reported in the condensed consolidated balance sheets approximate fair value.

10

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Prepaid and deferred commissions	$	7,373	$	8,573
Other prepaid expenses and current assets	10,925		10,453
Total prepaid expenses and other current assets	$	18,298	$	19,026

5. Property, Equipment and Software

Property, equipment and software was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
Furniture and equipment	$	16,024		$	14,179
Land	3,448			3,392
Buildings and improvements	19,943			19,035
Software	5,951			5,814
Capitalized website and software development costs	56,189			47,877
Total property, equipment and software	101,555			90,297
Less accumulated depreciation	(17,329		)	(12,662		)
Total property, equipment and software, net	$	84,226		$	77,635

11

6. Goodwill and Amortizable Intangible Assets

The Company has goodwill as well as certain amortizable intangible assets consisting of data acquisition costs, a member list, content, core technology and other intangible assets related to the purchase of a website domain name. Amortization of the intangible assets is computed using the straight-line method over the estimated lives of the assets, which are six years for the member list and three years for the content, core technology, data acquisition costs and other intangible assets.

Amortizable intangible assets as of June 30, 2016 and December 31, 2015 were as follows:

	Cost		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Amortization Period (in years)
June 30, 2016
Member list	$	1,670	$	812	$	858	3.1
Content	140		136		4		0.1
Core technology	110		107		3		0.1
Data acquisition costs	1,517		840		677		1.5
Other intangible assets	300		233		67		0.7
Total amortizable intangible assets	$	3,737	$	2,128	$	1,609

	Cost		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Amortization Period (in years)
December 31, 2015
Member list	$	1,670	$	673	$	997	3.6
Content	140		113		27		0.6
Core technology	110		88		22		0.6
Data acquisition costs	1,920		1,072		848		1.5
Other intangible assets	300		183		117		1.2
Total amortizable intangible assets	$	4,140	$	2,129	$	2,011

The Company’s recorded goodwill balance as of both June 30, 2016 and December 31, 2015 was $1,145.

7. Accrued Liabilities

Accrued liabilities was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Accrued sales commissions	$	1,149	$	1,461
Sales and use tax	4,316		4,307
Accrued compensation	6,462		6,826
Uninvoiced accounts payable	10,365		2,384
Contingent legal liability	3,500		—
Other accrued liabilities	3,789		5,309
Total accrued liabilities	$	29,581	$	20,287

12

8. Debt and Credit Arrangements

Long-term debt, net, was comprised of the following as of June 30, 2016 and December 31, 2015: 

	June 30, 2016			December 31, 2015
Term loan	$	60,000		$	60,000
Unamortized deferred financing fees	(1,267		)	(1,462		)
Unamortized fees paid to lender	(783		)	(904		)
Total debt, net	57,950			57,634
Less current maturities	—			(1,500		)
Total long-term debt, net	$	57,950		$	56,134

On September 26, 2014, the Company entered into a financing agreement for a $60,000 term loan and a $25,000 delayed draw term loan. On June 10, 2016, the Company entered into a first amendment to the financing agreement which, among other things, (i) extended the commencement of the Company’s quarterly repayment obligations under the term loan from September 30, 2016 to September 30, 2017; (ii) revised the financial covenants for minimum consolidated EBITDA, as defined in the financing agreement, for periods ending after June 30, 2016, (iii) revised the financial covenant related to minimum required liquidity from $10,000 to $30,000; (iv) removed the financial covenant related to minimum membership revenue for periods ending after March 31, 2016; and (v) modified the basis for the calculation of the applicable interest rate.

In accordance with the first amendment to the financing agreement, unless and until the Company's consolidated EBITDA exceeds $30,000 for any four consecutive fiscal quarters ending after June 10, 2016, amounts outstanding under the financing agreement bear interest at a per annum rate, at the option of the Company, equal to (i) the LIBOR rate for the interest period in effect, subject to a floor of 0.5%, plus 7.25% or (ii) the reference rate, which is based on the prime rate as published by the Wall Street Journal, subject to a floor of 3.25%, plus 6.25%. Should the Company's consolidated EBITDA exceed $30,000 for any four consecutive fiscal quarters ending after June 10, 2016, amounts outstanding under the financing agreement will bear interest thereafter at a per annum rate, at the option of the Company, equal to, in accordance with the basis for the calculation of the applicable interest rate set forth in the original financing agreement, (i) the LIBOR rate for the interest period in effect, subject to a floor of 0.5%, plus 6.75% or (ii) the reference rate, subject to a floor of 3.25%, plus 5.75%. The financing agreement requires monthly interest payments on the first business day of each month until maturity on any principal amounts outstanding under either debt facility. The financing agreement further obligates the Company to make quarterly principal payments on the term loan of $750 on the last day of each calendar quarter, commencing with the quarter ending September 30, 2017, and to repay the remaining balance of the term loan at maturity. The Company is required to make principal payments on the outstanding balance of the delayed draw term loan equal to 1.25% of the amount of such loan funded at or prior to the last day of each calendar quarter, commencing with the quarter ending September 30, 2016, and to repay the remaining outstanding balance of the delayed draw term loan at maturity. From the effective date of the financing agreement through September 26, 2017, the Company is also required to pay a commitment fee equal to 0.75% per annum of the unborrowed amounts of the delayed draw term loan.

The Company may prepay the amounts outstanding under the financing agreement at any time and is required to prepay the loans with (i) the net proceeds of certain asset sales, issuances of debt or equity, and certain casualty events, and (ii) up to 50% of consolidated excess cash flow, as defined in the financing agreement, for each fiscal year during the term of the financing agreement, commencing with the year ended December 31, 2015. As specified by the first amendment to the financing agreement, the Company must pay a 1% premium on prepayments made on or before June 10, 2017, subject to certain exceptions as set forth in the financing agreement. The Company’s obligations under the financing agreement are guaranteed by each of its subsidiaries and are secured by first priority security interests in all of their respective assets and a pledge of the equity interests of the Company’s subsidiaries. The term loan and the delayed draw term loan mature on September 26, 2019. As of June 30, 2016, the Company had $57,950 in outstanding borrowings, net of unamortized deferred financing fees of $1,267 and unamortized fees paid to the lender of $783, under the term loan and availability of $25,000 under the delayed draw term loan.

13

The financing agreement contains various restrictive covenants, including restrictions on the Company's ability to dispose of assets, make acquisitions or investments, incur debt or liens, make distributions to stockholders or repurchase outstanding stock, enter into related-party transactions and make capital expenditures, other than upon satisfaction of the conditions set forth in the financing agreement. The Company is also required to comply with certain financial covenants, including minimum consolidated EBITDA as defined in the financing agreement, minimum liquidity and maximum consolidated capital expenditures. Upon an event of default, which includes certain customary events such as, among other things, a failure to make required payments when due, a failure to comply with covenants, certain bankruptcy and insolvency events, defaults under other material indebtedness, or a change in control, the lenders may accelerate amounts outstanding, terminate the agreement and foreclose on all collateral. The Company was in compliance with all financial and non-financial covenants at June 30, 2016.

9. Commitments and Contingencies

The Company is regularly involved in litigation, both as a plaintiff and as a defendant, relating to its business and operations. The Company assesses the likelihood of any judgments or outcomes with respect to these matters and determines loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, the Company considers other relevant factors that could impact its ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. The Company’s reserves may change in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of the matters listed below will not have a material adverse effect on its business, consolidated financial position, results of operations or cash flows. Regardless of the outcome, litigation can adversely impact the Company as a result of defense and settlement costs, diversion of management resources and other factors.

Moore, et al. v. Angie's List, Inc., 2:15cv-01243-SD. On March 11, 2015, a lawsuit seeking class action status was filed against the Company in the U.S. District Court for the Eastern District of Pennsylvania. The lawsuit alleges claims for breaches of contract and the covenant of good faith and fair dealing, fraud and fraudulent inducement, unjust enrichment and violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law premised on the allegations that the Company does not disclose that it accepts advertising payments from service providers or that the payments allegedly will impact the service provider letter-grade ratings, the content and availability of reviews about the provider and the provider's place in search-result rankings. The Company filed a motion to dismiss on May 13, 2015, which was granted in part on August 7, 2015. In particular, the plaintiff's claims for breach of the covenant of good faith and fair dealing and unjust enrichment were dismissed from the action. The parties proceeded to exchange extensive written and document discovery and conducted depositions. Discovery closed on April 14, 2016. During the discovery period, certain other cases with similar allegations also were filed by some of the same plaintiffs’ counsel in federal court in California (Zygelman v. Angie's List, Inc., 3:16-cv-00276-SI) and New Jersey (Glick v. Angie's List, Inc., 2:16-cv-00546-MCA-MAH), each discussed below. Following mediation sessions held on April 4, 2016 and April 12, 2016, the parties executed a Memorandum of Understanding (“MOU”) on April 19, 2016 to settle the claims on a class-wide basis. Among other relief, the settlement provides for a cash payment of up to $2,350 to create a fund for the payment of cash to settlement class members and for the payment of attorneys’ fees and costs to plaintiffs’ counsel as approved by the court. Settlement class members will have the option of sharing in the cash fund or selecting a free period of membership of up to four months depending on the date and length of their membership with Angie’s List. The settlement also provides certain prospective relief in the form of enhanced explanations in the Company's Membership Agreement and in responses to Frequently Asked Questions concerning, among other things, the advertising revenue earned from service providers. In accordance with U.S. GAAP, the Company recorded a $3,500 contingent liability related to this matter in the first quarter of 2016, and this amount includes the cost of the cash fund described above as well as the payment of reasonable notice and administration costs, attorneys’ fees and an assumption of revenue the Company will forego as a result of certain class members selecting the option for a free period of membership. As part of the settlement, plaintiffs' counsel filed, and the Company did not oppose, a motion to amend the complaint in the Moore matter to add both the Zygelman and Glick plaintiffs as named plaintiffs for settlement purposes only, as well as a motion for preliminary approval of a class-wide settlement. By order dated July 11, 2016, the court granted the motion to amend the complaint, and the conditional amended class action complaint was filed as of that date. On July 12, 2016, the court entered an order granting the unopposed motion for preliminary approval of the proposed class action settlement, which, among other things, ordered that notice of the settlement be provided to the settlement class and scheduled a fairness hearing for November 8, 2016. The proposed settlement remains subject to final court approval. 

14

Glick v. Angie's List, Inc., 2:16-cv-00546-MCA-MAH. On February 1, 2016, Gary Glick, an Angie's List member, filed a putative class action lawsuit in the United States District Court for the District of New Jersey. The plaintiff alleged that the Company deceives its consumers by representing that service providers “can't pay” or “don't pay” to be on Angie's List, while concealing that service providers pay advertising fees to influence their search result ranking, and further asserts other claims substantially similar to those alleged in the Moore litigation. The plaintiff's complaint includes claims for breach of contract and for a violation of the New Jersey Consumer Fraud Act. The Glick action was voluntarily dismissed without prejudice on July 13, 2016, in accordance with the aforementioned class action settlement.

Zygelman v. Angie's List, Inc., 3:16-cv-00276-SI. On January 15, 2016, Michelle Zygelman, an Angie's List member, filed a putative class action lawsuit in the United States District Court for the Northern District of California. The plaintiff alleged claims substantially similar to those in the Glick action but is seeking relief under California consumer protection statutes. The Zygelman action was voluntarily dismissed without prejudice on July 14, 2016, in accordance with the aforementioned class action settlement.

Williams, et al. v. Angie’s List, Inc., 1:16-cv-878.On April 20, 2016, a group of former employees filed a lawsuit in the United States District Court for the Southern District of Indiana. The lawsuit alleges that the Company failed to pay (i) wages earned in a timely manner as required under Indiana Wage Statutes and (ii) overtime wages in violation of the Fair Labor Standards Act (29 U.S.C. §§ 206-07) and is requesting payment of all damages, including unpaid wages, interest, attorneys’ fees and other charges. A first and second amended complaint was filed, adding additional named plaintiffs, and the Company’s answer to the second amended complaint was filed on July 26, 2016. The plaintiffs filed a motion for conditional certification on June 10, 2016, and the Company filed its response brief in opposition to motion for conditional certification on July 15, 2016. The Company is currently unable to determine the likely outcome or reasonably estimate the amount or range of potential liability, if any, related to this matter, and accordingly, has not established any reserve for this matter.

Crabtree, et al. v. Angie’s List, Inc., 1:16-cv-877. On April 20, 2016, three former employees filed a lawsuit in the United States District Court for the Southern District of Indiana. The lawsuit alleges that the Company failed to pay (i) wages earned in a timely manner as required under Indiana Wage Statutes and (ii) overtime wages in violation of the Fair Labor Standards Act (29 U.S.C. §§ 206-07) and is requesting payment of all damages, including unpaid wages, interest, attorneys’ fees and other charges. The plaintiffs filed a first amended complaint in May 2016, adding one additional Indiana wage statute claim. The Company filed its answer and defenses on June 9, 2016. The Company is currently unable to determine the likely outcome or reasonably estimate the amount or range of potential liability, if any, related to this matter, and accordingly, has not established any reserve for this matter.

15

ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. All statements other than statements of historical fact, including statements regarding market and industry prospects and future results of operations or financial position, made in this Form 10-Q are forward-looking. In many cases, you can identify forward-looking statements by terminology, such as “may”, “should”, “will”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. The forward-looking information may include, among other information, statements concerning our estimated and projected earnings, revenues, costs, expenditures, cash flows, growth rates, financial results, our plans and objectives for future operations, changes to our business model, growth initiatives or strategies (including, but not limited to, merger and acquisition activity), profitability plans or the expected outcome or impact of pending or threatened litigation. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Risks and uncertainties may affect the accuracy of forward-looking statements, including, without limitation, those set forth in Item 1A. of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, in Item 1A. of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and in Item 1A. of Part II of this Form 10-Q, as well as in other reports we file with the Securities and Exchange Commission (“SEC”).

The forward-looking statements included in this report are made only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Overview

We operate a national local services consumer review service and marketplace where members can research, shop for and purchase local services for critical needs, such as home, health and automotive services, as well as rate and review the providers of these services across the United States. Our ratings and reviews, which are now available to members free-of-charge, assist members in identifying and hiring a highly-rated provider for their local service needs, and our dynamic tools and products provide members with multiple ways to get work done while reducing the time and effort required to hire a service provider.

Our long-term profitable growth plan, which we announced earlier this year, features a redefined product and service experience for members and service providers alike, transforming our legacy business model by dropping the ratings and reviews paywall. In addition to free memberships, our new model provides consumers with revamped tiered membership options offering an array of premium services at varying price points. Ultimately, service providers will also be able to take advantage of a host of new services and tools under our new model based on the nature and extent of the service provider's relationship with us.

Our long-term profitable growth plan entails three phases to be implemented over several years:

• Strengthen and Reposition the Core Business - includes redefining the paywall and launching premium consumer services, improving our member experience by scaling our new platform and optimizing the service provider sales organization to better monetize consumer traffic;

• Leverage the Home Services Platform - includes expanding value-added services provided on our platforms and improving our customer and service provider relationships with personalized offerings; and

• Expand to Adjacencies - includes expanding our member and service provider bases and developing partnerships to provide additional value-added services.

Our new model is designed to identify and leverage more ways to attract, engage and ultimately monetize consumer and service provider traffic on our platforms. During the second quarter of 2016, we achieved three key milestones integral to the implementation of our long-term profitable growth plan: (1) completed the migration to our new technology platform, (2) dropped our ratings and reviews paywall and launched our new tiered membership model and (3) optimized marketing and operations. Once fully implemented, we believe our long-term profitable growth plan will enhance the value of our service and generate accelerated growth, retention and engagement across our platforms, which we, in turn, believe will drive increased market penetration and meaningful revenue growth.

16

We generate revenue from both service providers and members. We derive service provider revenue principally from term-based sales of advertising, including on our website and mobile applications, in our publication and through our call center, to service providers meeting certain eligibility criteria. Our e-commerce solutions, which are available through postings on our website and mobile applications as well as via email promotions, offer members the opportunity to purchase services through us from highly-rated service providers and provide us with additional service provider monetization opportunities. Service provider revenue as a percentage of total revenue has continued to increase as we evolve and enhance the value proposition we offer service providers and leverage new service provider monetization strategies, and we expect this trend to continue following the recent removal of our ratings and reviews paywall. Our primary source of membership revenue is subscription fees, which are typically charged in advance and are now generated via our premium membership tiers. Membership revenue as a percentage of total revenue has continued to decline in recent periods due to the downward pressure on our membership revenue attributable to our former tiered membership pricing model, and we expect this trend to continue as we are now offering a free membership tier for consumers.

Market Cohort Analysis

We compile certain financial and operating data for our markets, grouped by the years in which the markets transitioned to paid membership status. Since our business has recently evolved, particularly with respect to the composition of our free and paid membership bases, we will no longer be including the market cohort analysis in future filings as we do not believe it will continue to provide a meaningful evaluation of our business. However, given that our prior paid membership model remained in place through early June 2016, we continued to utilize the market cohort analysis to understand and evaluate our performance and underlying trends in our business for the majority of the three and six month periods ended June 30, 2016 and determined it was appropriate to include in this Form 10-Q filing as a result.

The table below summarizes this data for the twelve month periods ended June 30, 2016 and June 30, 2015 by each respective cohort. The pre-2003 cohort includes our ten most established markets where we initially built out our business model. The markets in this cohort include several mid-sized urban markets in the Midwest as well as Chicago and Boston. The 2003-2007 cohort is comprised of the first major subset of markets, including many of our largest potential markets, that we targeted in our national expansion strategy. The post-2007 cohort primarily consists of smaller markets that we entered to fill out our national presence. 

	Pre-2003						2003-2007						Post-2007						Total
	June 30,						June 30,						June 30,						June 30,
	2016			2015			2016			2015			2016			2015			2016			2015
Number of Markets	10			10			35			35			208			208			253			253
Average Revenue/Market(1)	$	7,884,705		$	7,856,862		$	6,136,688		$	6,003,238		$	223,299		$	218,547		$	1,344,179		$	1,320,711
Average Marketing Expense/Market(2)	$	1,056,367		$	1,214,640		$	1,111,474		$	1,276,797		$	97,676		$	112,474		$	275,817		$	317,110
Membership Revenue/Paid Member(3)	$	24.12		$	28.38		$	22.52		$	25.83		$	14.68		$	15.09		$	20.80		$	23.47
Service Provider Revenue/Paid Member(4)	105.30			108.97			101.47			102.40			42.08			42.10			86.83			87.70
Total Revenue/Paid Member	$	129.42		$	137.35		$	123.99		$	128.23		$	56.76		$	57.19		$	107.63		$	111.17
Total Paid Memberships(5)	608,818			609,644			1,729,448			1,735,024			809,300			827,398			3,147,566			3,172,066
Estimated Penetration Rate(6)	16		%	17		%	13		%	13		%	11		%	12		%	13		%	13		%
Annual Membership Growth Rate(7)	—		%	14		%	—		%	13		%	(2		)%	9		%	(1		)%	12		%

(1) Average revenue per market is calculated by dividing the revenue recognized for the markets in a given cohort by the number of markets in the cohort at period end.

(2) Average marketing expense per market is calculated by first allocating marketing expense to each cohort based on the percentage of our total target demographic for all markets in each cohort, as determined by third-party data, and then dividing the allocated cohort marketing expense by the number of markets in the cohort at period end. We calculate this average per market to facilitate comparisons among cohorts, but it is not intended to represent typical characteristics of actual markets within the cohort. According to demographic studies by Merkle Inc. that we commissioned in December and June of 2015, there were approximately 27 million households in the United States in our target demographic, which consists of homeowners aged 35 to 64 with an annual household income of at least $75,000, including 24 million households located in our markets. The December 2015 study determined that the average number of households per market in our target demographic was 370,000, 390,000 and 30,000 for the pre-2003, 2003-2007 and post-2007 cohorts, respectively, while the June 2015 study determined the average number of households per market in our target demographic to be 370,000, 380,000 and 30,000, respectively.

17

(3) Membership revenue per paid membership is calculated as membership revenue in the cohort divided by the average number of paid memberships in the cohort. We calculate this average per market to facilitate comparisons among cohorts, but it is not intended to represent typical characteristics of actual markets within the cohort.

(4) Service provider revenue per paid membership is calculated as service provider revenue in the cohort divided by the average number of paid memberships in the cohort. We calculate this average per market to facilitate comparisons among cohorts, but it is not intended to represent typical characteristics of actual markets within the cohort.

(5) Total paid memberships in each cohort as of June 30, 2015 includes a de minimis number of complimentary memberships in what formerly comprised our paid markets. These complimentary memberships are no longer included in our paid membership counts and are therefore not reflected in the paid membership totals presented in the table above for each cohort as of June 30, 2016.

(6) Estimated penetration rate is calculated by dividing the number of paid memberships in a given cohort as of June 30, 2016 and 2015, respectively, by the number of households meeting our target demographic criteria in that cohort.

(7) Annual membership growth rate represents the rate of increase in the total number of paid memberships in the cohort between June 30, 2016 and 2015 for 2016 and June 30, 2015 and 2014 for 2015.

Our average revenue per market has generally grown with the maturity and corresponding increased penetration of our markets. Total revenue per paid membership fluctuates from period to period, reflecting the impact of a variety of factors, including:

• Our average service provider contract term typically approximates one year, and we do not increase rates for a given service provider prior to contract renewal. As such, there is a lag in our ability to leverage increased penetration in a market into increased advertising rates;

• On average across all markets, we are utilizing lower membership pricing and generating reduced membership revenue per paid member as a result of our previous tiered pricing membership structure, and more recently, the introduction of a free membership tier for consumers. As our business evolves, we may again alter or refine our strategy with regard to membership pricing in the future;

• Our approach to generating revenue from e-commerce continues to evolve as we refine the value proposition we offer to service providers and, concurrently, our service provider monetization strategies. Accordingly, we have in the past adjusted our approach with respect to e-commerce take rates in order to more effectively monetize our e-commerce offerings, and we may do so again in the future; and

• As we implement and scale our new technology platform, we have experienced and may continue to experience revenue losses as a result of temporary disruptions common to significant platform migrations such as this one.

At June 30, 2016, total revenue per paid membership was down across all cohorts and in total as compared to June 30, 2015, reflecting the impacts of declining average membership pricing and, more recently, near-term revenue losses attributable to transitional challenges associated with the migration to our new technology platform. We intend to continue to evaluate and adopt innovative packaging, pricing and monetization strategies, such as our tiered membership offerings, as well as introduce new products and services, in an effort to deliver compelling value to our members and service providers and thereby generate growth, retention and engagement across the business. Although the dynamics associated with the introduction of such strategies have caused and may continue to cause revenue per paid membership to decline sequentially in some or all of our cohorts in the near term, we believe that these strategies are critical to driving increased market penetration and meaningful revenue growth over time.

18

Key Operating Metrics

In addition to the line items in our condensed consolidated financial statements, we regularly review a number of other operating metrics related to our membership and service provider bases to evaluate our business, determine the allocation of resources and make decisions regarding business strategies. We believe these metrics are useful for investors and analysts to understand the underlying trends in our business. However, as our business evolves, the metrics we currently identify as critical to the evaluation of our operations and performance may change.

The following table summarizes our key operating metrics, which are unaudited, for the three and six months ended June 30, 2016 and 2015: 

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Total free memberships (end of period)	152,586			—			152,586			—
Total paid memberships (end of period)	3,147,566			3,172,066			3,147,566			3,172,066
Total memberships (end of period)	3,300,152			3,172,066			3,300,152			3,172,066
Gross free memberships added (in period)	152,586			—			152,586			—
Gross paid memberships added (in period)	129,534			289,866			317,776			519,853
Average paid membership renewal rate (in period)	73		%	78		%	74		%	77		%
Participating service providers (end of period)	54,690			53,514			54,690			53,514
Total service provider contract value (end of period, in thousands)	$	258,467		$	266,131		$	258,467		$	266,131
Total service provider contract value backlog (end of period, in thousands)	$	151,813		$	159,279		$	151,813		$	159,279

Total memberships. Total free memberships reflects the number of free members as of the end of the period who joined subsequent to us dropping our ratings and reviews paywall in June 2016. Total paid memberships represents the number of paid members at the end of each period presented. Total paid memberships as of June 30, 2015 also included a de minimis number of complimentary memberships in what formerly comprised our paid markets. These complimentary memberships are no longer included in our paid membership counts and are therefore not reflected in the paid membership totals presented in the table above as of June 30, 2016. We generally expect that there will be one membership per household and, as such, each membership may actually represent multiple individual consumers.

Gross memberships added. Gross free memberships added represents the number of new free members added during the reporting period, since we dropped our ratings and reviews paywall in June 2016. Gross paid memberships added reflects the total number of new paid members added in a reporting period.

Average paid membership renewal rate. Average paid membership renewal rate reflects the percentage of all paid memberships expiring in the reporting period that are renewed as paid members.

Participating service providers. We include in participating service providers the total number of service providers under contract for advertising, e-commerce or both at the end of the period.

Total service provider contract value. We calculate service provider contract value as the total contract value of active service provider contracts at the end of the period. Contract value is the total payment obligation of a service provider to us, including amounts already recognized in revenue, over the stated term of the contract.

Total service provider contract value backlog. Service provider contract value backlog consists of the portion of service provider contract value at the end of the period that is not yet recognized as revenue.

19

Results of Operations

The following tables set forth our results of operations for the periods presented in absolute dollars and as a percentage of our revenue for those periods. The financial results below are not necessarily indicative of future results.

	Three Months Ended   June 30,					Six Months Ended   June 30,
	2016		2015			2016		2015
	(in thousands)					(in thousands)
Revenue
Membership	$	15,645	$	16,910		$	31,979	$	34,249
Service provider	67,415		70,425			134,937		136,629
Total revenue	83,060		87,335			166,916		170,878
Operating expenses
Operations and support (1)	10,172		15,456			22,381		29,454
Selling (1)	26,983		31,552			54,815		59,844
Marketing (1)	14,432		28,726			33,547		47,555
Product and technology (1)	13,323		9,571			23,357		17,987
General and administrative (1)	11,995		9,586			30,042		18,312
Operating income (loss)	6,155		(7,556		)	2,774		(2,274		)
Interest expense, net	1,352		784			1,968		1,696
Income (loss) before income taxes	4,803		(8,340		)	806		(3,970		)
Income tax expense	6		9			13		19
Net income (loss)	$	4,797	$	(8,349	)	$	793	$	(3,989	)

(1) Includes non-cash stock-based compensation expense as follows:
Operations and support	$	57	$	29	$	88	$	49
Selling	430		149		709		160
Marketing	121		76		227		137
Product and technology	566		226		875		422
General and administrative	2,517		1,787		4,819		3,755
Total non-cash stock-based compensation expense	$	3,691	$	2,267	$	6,718	$	4,523

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2016		2015		2016		2015
Revenue
Membership	19	%	19	%	19	%	20	%
Service provider	81	%	81	%	81	%	80	%
Total revenue	100	%	100	%	100	%	100	%
Operating expenses
Operations and support	12	%	18	%	13	%	17	%
Selling	33	%	36	%	33	%	34	%
Marketing	17	%	33	%	20	%	28	%
Product and technology	16	%	11	%	14	%	11	%
General and administrative	14	%	11	%	18	%	11	%
Operating income (loss)	8	%	(9)	%	2	%	(1)	%
Interest expense, net	2	%	1	%	1	%	1	%
Income (loss) before income taxes	6	%	(10)	%	1	%	(2)	%
Income tax expense	—	%	—	%	—	%	—	%
Net income (loss)	6	%	(10)	%	1	%	(2)	%

20

Comparison of the Three Months Ended June 30, 2016 and 2015

Revenue

	Three Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Revenue
Membership	$	15,645		$	16,910		(7)	%
Service provider	67,415			70,425			(4)	%
Total revenue	$	83,060		$	87,335		(5)	%
Percentage of revenue by type
Membership	19		%	19		%
Service provider	81		%	81		%
Total revenue	100		%	100		%
Total paid memberships (end of period)	3,147,566			3,172,066			(1)	%
Gross paid memberships added (in period)	129,534			289,866			(55)	%
Participating service providers (end of period)	54,690			53,514			2	%

Total revenue decreased$4.3 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015.

Membership revenue decreased$1.3 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, primarily attributable to the combined impact of a 55% decline in gross paid memberships added period over period, lower membership renewal rates and a 10%decrease in membership revenue per average paid membership quarter over quarter. The declines in gross paid memberships added and membership renewal rates were largely the result of adjustments in the level of our advertising spend, representing a reduction of $16.1 million, in the second quarter of 2016 as compared to the same quarter in 2015. The decrease in membership revenue per average paid membership was due to reductions in membership fees, on average, across all markets under our former tiered membership pricing structure. Additionally, we introduced a free membership offering in all markets in June 2016, officially dropping our ratings and reviews paywall to non-paying consumers and further negatively impacting membership revenue, as anticipated. Membership revenue accounted for 19% of total revenue for each of the three months ended June 30, 2016 and 2015. We generally expect membership revenue as a percentage of total revenue to decline in future periods due to downward pressure on membership revenue associated with the evolution of our membership plan offerings and pricing, including the recent introduction of a free membership tier for consumers.

Service provider revenue, which consists primarily of revenue from advertising contracts with service providers, decreased$3.0 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, attributable to declines in service provider advertising originations and renewal rates, as well as increases in service provider attrition, during the second quarter. While we experienced a modest 2% increase in the number of participating service providers year over year, service provider contract value and contract value backlog decreased by $7.7 million and $7.5 million, respectively, over the same time period, reflecting, in part, the impact of certain limited disruptions related to our recent migration to a new technology platform. Historically, as our penetration of a given market increases, we are typically able to charge higher rates for advertising as service providers are able to reach a larger base of potential customers. However, as we generally only adjust advertising rates at the time of contract renewal, growth in service provider revenue typically trails increases in market penetration. Accordingly, as we transition our business model and provide access to our ratings and reviews free-of-charge, the anticipated corresponding increases in service provider revenue may not be immediate. Revenue from our e-commerce offerings is also included in service provider revenue and will fluctuate from period to period as offerings and monetization strategies evolve and due to seasonality. Declines in second quarter e-commerce unit sales, attributable to transitional challenges associated with the implementation of our new technology platform, also contributed to the decline in service provider revenue quarter over quarter. Service provider revenue accounted for 81% of total revenue for each of the three months ended June 30, 2016 and 2015. We generally expect service provider revenue as a percentage of total revenue to increase as we evolve and enhance the value proposition we offer service providers and leverage new service provider monetization strategies in connection with the recent removal of our ratings and reviews paywall, subject to any near-term negative impacts associated with the migration to our new technology platform.

21

Operations and support

	Three Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Operations and support	$	10,172		$	15,456		(34)	%
Percentage of revenue	12		%	18		%
Non-cash stock-based compensation expense	$	57		$	29

Operations and support expense decreased$5.3 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015. The most significant factors contributing to the quarter over quarter decline in operations and support expense were a $1.9 million decrease in publication costs and a $1.6 million reduction in compensation and personnel-related expenditures. The decline in publication costs was the result of our implementation of a digital content distribution strategy wherein we increased digital distribution of the Angie's List Magazine during the quarter, yielding a period over period decrease in the costs incurred to provide the print magazine to our members, and the reduction in compensation and personnel-related expenditures was driven by a 27% decrease in operations and support headcount year over year. Operations and support expense was also positively impacted by a period over period decline in credit card processing fees of $0.6 million, largely attributable to lower transaction volume in the second quarter of 2016. Operations and support expense decreased as a percentage of revenue quarter over quarter, and we believe this trend will continue over the remainder of 2016 as we leverage identified operations and support efficiencies.

Selling

	Three Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Selling	$	26,983		$	31,552		(14)	%
Percentage of revenue	33		%	36		%
Non-cash stock-based compensation expense	$	430		$	149

Selling expense decreased$4.6 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015. Although selling expense generally correlates with fluctuations in service provider revenue, we experienced quarter over quarter leverage in selling expense as service provider revenue decreased4% for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, while selling expense declined 14% over the same time period. The primary factor driving the period over period reduction in selling expense was prior year event costs, contributing to decreases in (i) travel, meals and entertainment of $1.1 million, (ii) selling-related service provider marketing expenditures of $0.8 million and (iii) outsourced services of $0.6 million. Headcount also influenced the quarter over quarter leverage in selling expense, as there was a 6% reduction in the total number of employees in our sales organization from June 30, 2015 to June 30, 2016, and when coupled with the impact of recent changes in our sales compensation plans and organizational structure, yielded a $1.8 million decrease in selling compensation and personnel-related costs for commissions, wages and other employee benefits. While selling expense as a percentage of total revenue declined in the second quarter of 2016 as compared to the second quarter of 2015, we expect that selling expense will increase, both in absolute dollars and as a percentage of revenue, over the duration of the year due to planned headcount growth in our sales organization.

22

Marketing

	Three Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Marketing	$	14,432		$	28,726		(50)	%
Percentage of revenue	17		%	33		%
Non-cash stock-based compensation expense	$	121		$	76

Marketing expense, which now includes the marketing compensation and personnel-related costs and general marketing operating expenditures that were formerly classified as general and administrative expenses, decreased$14.3 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015. While we continue to make investments in increasing our membership base and expanding our market reach, in recent years we shifted our marketing focus from solely driving member growth to also highlighting our e-commerce offerings, as well as new products and services, and that strategy remained in place during the second quarter of 2016. Accordingly, our marketing expense is not only a reflection of the cost incurred to obtain new members but also the marketing dollars we are spending to generate traffic to and transactions on our platforms. For the three months ended June 30, 2016, the most significant factor contributing to the quarter over quarter decrease in marketing expense was a $16.1 million decline in advertising spend, as we purposefully reduced such costs in the second quarter of 2016, as compared to 2015, ahead of a planned acceleration in advertising spend during the third quarter of the year to highlight our new free membership offerings and related initiatives. The period over period decline in marketing expense attributable to reductions in advertising spend was partially offset by a $1.0 million increase in service provider marketing costs related to our efforts to further enhance our relationships with service providers, and a $1.0 million increase in marketing-related outsourced service expenditures, a portion of which was attributable to fees paid to our advertising creative agency. Consistent with the seasonality that characterizes our business, we generally expect marketing expense to peak in either the second or third quarter of the year. In 2016, we are planning for this peak to occur in the third quarter in connection with the recent launch of our long-term profitable growth plan and the removal of our ratings and reviews paywall.

Product and technology

	Three Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Product and technology	$	13,323		$	9,571		39	%
Percentage of revenue	16		%	11		%
Non-cash stock-based compensation expense	$	566		$	226

Product and technology expense increased$3.8 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015. The increase in product and technology expense was largely the result of a $1.9 million quarter over quarter increase in depreciation expense related to our new technology platform, which we placed in service as of the end of the first quarter of 2016. Increases in our product and technology headcount also contributed to the period over period fluctuation in product and technology expense. Specifically, the number of product and technology personnel we employ increased 36% from June 30, 2015 to June 30, 2016 as we strengthened our product and technology organizations to execute on our technology platform migration and product roadmap, contributing to an additional $1.3 million in compensation and personnel-related costs quarter over quarter. Product and technology expense increased as a percentage of revenue period over period, and we expect this trend to continue over the remainder of the year in connection with the migration to and depreciation of our new technology platform. As utilization of the related assets has now commenced, certain platform expenditures, including internal labor, that do not represent qualifying upgrades, enhancements or new functionality are no longer classified as capitalized website and software development costs and are instead expensed as incurred.

23

General and administrative

	Three Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
General and administrative	$	11,995		$	9,586		25	%
Percentage of revenue	14		%	11		%
Non-cash stock-based compensation expense	$	2,517		$	1,787

General and administrative expense, which no longer includes the marketing compensation and personnel-related costs and general marketing operating expenditures that are now classified as marketing expenses, increased$2.4 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015. The most significant driver of the increase in general and administrative expense period over period was a $3.4 million increase in outsourced service expenditures and professional fees attributable to third-party consulting costs incurred for, among other things, the execution of our long-term profitable growth plan and optimization of our service provider go-to-market activities. General and administrative expense increased as a percentage of revenue for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, and, as a percentage of revenue, we expect period over period increases in general and administrative expense over the course of the year as a result of the impact of personnel added in 2015 as well as recent stock-based compensation awards.

Interest expense

Interest expense for the three months ended June 30, 2016 was $1.4 million as compared to $0.8 million for the three months ended June 30, 2015, reflecting the impact of recurring monthly interest payments on our outstanding long-term debt and monthly interest charges for deferred financing fee and debt discount amortization related to the September 2014 debt financing transaction. The increase in interest expense was primarily attributable to a reduction in capitalized interest in 2016 as compared to 2015. As the migration to our new technology platform is now complete, we ceased capitalizing interest on website and software development for the new platform as of the end of the first quarter of 2016.

24

Comparison of the Six Months EndedJune 30, 2016 and 2015

Revenue

	Six Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Revenue
Membership	$	31,979		$	34,249		(7)	%
Service provider	134,937			136,629			(1)	%
Total revenue	$	166,916		$	170,878		(2)	%
Percentage of revenue by type
Membership	19		%	20		%
Service provider	81		%	80		%
Total revenue	100		%	100		%
Total paid memberships (end of period)	3,147,566			3,172,066			(1)	%
Gross paid memberships added (in period)	317,776			519,853			(39)	%
Participating service providers (end of period)	54,690			53,514			2	%

Total revenue decreased$4.0 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015.

Membership revenue decreased$2.3 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015, primarily attributable to the combined impact of a 39% decline in gross paid memberships added year over year, lower membership renewal rates and a 10%decrease in membership revenue per average paid membership for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015. The declines in gross paid memberships added and membership renewal rates were largely the result of adjustments in the level of our advertising spend, representing a reduction of $17.7 million, in the first half of 2016 as compared to the same period in 2015. The decrease in membership revenue per average paid membership was due to reductions in membership fees, on average, across all markets under our former tiered membership pricing structure. Additionally, we introduced a free membership offering in all markets in June 2016, officially dropping our ratings and reviews paywall to non-paying consumers and further negatively impacting membership revenue, as anticipated. Membership revenue accounted for 19% and 20% of total revenue for the six months ended June 30, 2016 and 2015, respectively. We generally expect membership revenue as a percentage of total revenue to decline in future periods due to downward pressure on membership revenue associated with the evolution of our membership plan offerings and pricing, including the recent introduction of a free membership tier for consumers.  

Service provider revenue decreased$1.7 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015, primarily attributable to declines in service provider advertising originations and renewal rates, as well as increases in service provider attrition, during the period. While we experienced a modest 2% increase in the number of participating service providers year over year, service provider contract value and contract value backlog decreased by $7.7 million and $7.5 million, respectively, over the same time period, reflecting, in part, the impact of certain limited disruptions related to our recent migration to a new technology platform. Historically, as our penetration of a given market increases, we are typically able to charge higher rates for advertising as service providers are able to reach a larger base of potential customers. However, as we generally only adjust advertising rates at the time of contract renewal, growth in service provider revenue typically trails increases in market penetration. Accordingly, as we transition our business model and provide access to our ratings and reviews free-of-charge, the anticipated corresponding increases in service provider revenue may not be immediate. Revenue from our e-commerce offerings will fluctuate from period to period as offerings and monetization strategies evolve and due to seasonality. Declines in e-commerce unit sales during the period, attributable to transitional challenges associated with the implementation of our new technology platform, also contributed to the decline in service provider revenue year over year. Service provider revenue accounted for 81% and 80% of total revenue for the six months ended June 30, 2016 and 2015, respectively. We generally expect service provider revenue as a percentage of total revenue to increase as we evolve and enhance the value proposition we offer service providers and leverage new service provider monetization strategies in connection with the recent removal of our ratings and reviews paywall, subject to any near-term negative impacts related to the migration to our new technology platform.

25

Operations and support

	Six Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Operations and support	$	22,381		$	29,454		(24)	%
Percentage of revenue	13		%	17		%
Non-cash stock-based compensation expense	$	88		$	49

Operations and support expense decreased$7.1 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015. The most significant factors contributing to the year over year decline in operations and support expense were a $2.8 million reduction in compensation and personnel-related expenditures and a $1.6 million decrease in publication costs. The reduction in compensation and personnel-related expenditures was driven by a 27% decrease in operations and support headcount year over year, and the decline in publication costs was the result of our implementation of a digital content distribution strategy wherein we increased digital distribution of the Angie's List Magazine during the year, yielding a year over year decrease in the costs incurred to provide the print magazine to our members. Operations and support expense was also positively impacted by a period over period decline in credit card processing fees of $1.1 million, which was largely attributable to lower transaction volume in the first half of 2016. Operations and support expense decreased as a percentage of revenue year over year, and we believe this trend will continue over the remainder of 2016 as we leverage identified operations and support efficiencies.

Selling

	Six Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Selling	$	54,815		$	59,844		(8)	%
Percentage of revenue	33		%	34		%
Non-cash stock-based compensation expense	$	709		$	160

Selling expense decreased$5.0 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015. Although selling expense generally correlates with fluctuations in service provider revenue, we experienced year over year leverage in selling expense as service provider revenue decreased1% for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015, while selling expense declined 8% over the same time period. The primary factor driving the period over period reduction in selling expense was a $2.4 million decrease in selling compensation and personnel-related costs for commissions, wages and other employee benefits, largely attributable to a 6% reduction in the total number of employees in our sales organization from June 30, 2015 to June 30, 2016, as well as the impact of recent changes in our sales compensation plans and organizational structure. Prior year event costs also influenced the year over year leverage in selling expense, contributing to decreases in (i) travel, meals and entertainment of $1.2 million, (ii) selling-related service provider marketing expenditures of $0.7 million and (iii) outsourced services of $0.3 million. While selling expense as a percentage of total revenue declined for the six months ended June 30, 2016 as compared to the six months ended June 30, 2016, we expect that selling expense will increase, both in absolute dollars and as a percentage of revenue, over the duration of the year due to planned headcount growth in our sales organization.

26

Marketing

	Six Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Marketing	$	33,547		$	47,555		(29)	%
Percentage of revenue	20		%	28		%
Non-cash stock-based compensation expense	$	227		$	137

Marketing expense, which now includes the marketing compensation and personnel-related costs and general marketing operating expenditures that were formerly classified as general and administrative expenses, decreased$14.0 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015. While we continue to make investments in increasing our membership base and expanding our market reach, in recent years we shifted our marketing focus from solely driving member growth to also highlighting our e-commerce offerings, as well as new products and services, and that strategy remained in place during the first half of 2016. Accordingly, our marketing expense is not only a reflection of the cost incurred to obtain new members but also the marketing dollars we are spending to generate traffic to and transactions on our platforms. For the six months ended June 30, 2016, the most significant factor contributing to the year over year decrease in marketing expense was a $17.7 million decline in advertising spend, as we purposefully reduced such costs in the first half of 2016, as compared to 2015, ahead of a planned acceleration in advertising spend during the third quarter of the year to highlight our new free membership offerings and related initiatives. The year over year decline in marketing expense attributable to reductions in advertising spend was partially offset by a $2.5 million increase in marketing-related outsourced service expenditures, a portion of which was attributable to fees paid to our advertising creative agency, and $1.0 million increase in service provider marketing costs related to our efforts to further enhance our relationships with service providers. Consistent with the seasonality that characterizes our business, we generally expect marketing expense to peak in either the second or third quarter of the year. In 2016, we are planning for this peak to occur in the third quarter in connection with the recent launch of our long-term profitable growth plan and the removal of our ratings and reviews paywall.

Product and technology

	Six Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
Product and technology	$	23,357		$	17,987		30	%
Percentage of revenue	14		%	11		%
Non-cash stock-based compensation expense	$	875		$	422

Product and technology expense increased$5.4 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015. The increase in product and technology expense was largely the result of year over year increases in compensation and personnel-related costs and depreciation expense of $2.2 million and $2.1 million, respectively. The year over year increase in product and technology compensation and personnel-related costs was primarily attributable to the 36% growth in our product and technology headcount from June 30, 2015 to June 30, 2016 as we strengthened our product and technology organizations to execute on our technology platform migration and product roadmap, while the increase in depreciation expense period over period was related to our new technology platform, which we placed in service as of the end of the first quarter of 2016. Product and technology expense increased as a percentage of revenue year over year, and we expect this trend to continue over the remainder of the year in connection with the migration to and depreciation of our new technology platform. As utilization of the related assets has now commenced, certain platform expenditures, including internal labor, that do not represent qualifying upgrades, enhancements or new functionality are no longer classified as capitalized website and software development costs and are instead expensed as incurred.

27

General and administrative

	Six Months Ended   June 30,
	2016			2015			% Change
	(dollars in thousands)
General and administrative	$	30,042		$	18,312		64	%
Percentage of revenue	18		%	11		%
Non-cash stock-based compensation expense	$	4,819		$	3,755

General and administrative expense, which no longer includes the marketing compensation and personnel-related costs and general marketing operating expenditures that are now classified as marketing expenses, increased$11.7 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015. The most significant driver of the increase in general and administrative expense year over year was a $6.9 million increase in outsourced service expenditures and professional fees attributable to third-party consulting costs incurred for, among other things, the development and execution of our long-term profitable growth plan, optimization of our service provider go-to-market activities and activist activity in our stock. General and administrative expense was also negatively impacted by a $3.5 million contingent liability recorded during the first quarter of 2016 for the pending Moore litigation and related cases. Additionally, there was a cumulative $1.0 million net benefit to general and administrative expense in the first six months of 2015, related to adjustments to a legal settlement accrual for a prior legal obligation, that did not recur in 2016, further impacting the year over year fluctuation in general and administrative expense. A $0.9 million increase in compensation and personnel-related costs, largely attributable to stock-based compensation expense, also contributed to the year over year increase in general and administrative expense. General and administrative expense increased as a percentage of revenue for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015, and, as a percentage of revenue, we expect period over period increases in general and administrative expense over the course of the year as a result of the impact of personnel added in 2015 as well as recent stock-based compensation awards.

Interest expense

Interest expense for the six months ended June 30, 2016 was $2.0 million as compared to $1.7 million for the six months ended June 30, 2015, reflecting the impact of recurring monthly interest payments on our outstanding long-term debt and monthly interest charges for deferred financing fee and debt discount amortization related to the September 2014 debt financing transaction, partially offset by capitalized interest on website and software development. The year over year increase in interest expense was primarily attributable to a reduction in capitalized interest in 2016 as compared to 2015. As the migration to our new technology platform is now complete, we ceased capitalizing interest on website and software development for the new platform as of the end of the first quarter of 2016.

28

Liquidity and Capital Resources

General

At June 30, 2016, we had $34.6 million in cash and cash equivalents and $23.9 million in short-term investments. Cash and cash equivalents consists of bank deposit accounts and money market funds as well as any investments in certificates of deposit, U.S. Treasury securities or corporate bonds with contractual maturities of three months or less, which, at times, may exceed federally insured limits. Short-term investments consist of certificates of deposit, U.S. Treasury securities and corporate bonds with maturities of more than 90 days but less than one year. To date, the carrying values of these investments approximate their fair values, and we have incurred no material loss in these accounts.

Summary cash flow information for the six months ended June 30, 2016 and 2015 is set forth below.

	Six Months Ended   June 30,
	2016			2015
	(in thousands)
Net cash provided by operating activities	$	14,286		$	23,208
Net cash (used in) investing activities	(12,264		)	(15,776		)
Net cash (used in) financing activities	(46		)	(108		)

Net Cash Provided by Operating Activities

Cash provided by operating activities for the six months ended June 30, 2016 of $14.3 million was largely attributable to total combined non-cash activity of $12.5 million during the first half of the year, including $6.7 million in stock-based compensation expense and $5.3 million in depreciation and amortization. Operating cash flow for the six months ended June 30, 2016 was also positively impacted by a $7.0 million net increase in accounts payable and accrued liabilities since December 31, 2015, driven by accrued marketing expenses and the expected timing of payment of such accrued balances, as well as a $3.5 million contingent liability recorded during the first quarter of 2016 for the pending Moore litigation and related cases. Uses of cash from operations for the period included a $6.9 million net decrease in deferred revenue, which was primarily the result of near-term pressures on both our membership and service provider revenue streams associated with the migration to our new technology platform and the transition of our business model, including the removal of our ratings and reviews paywall.

Cash provided by operating activities for the six months ended June 30, 2015 of $23.2 million was generated despite a net loss of $4.0 million incurred over the same time period, predominately attributable to a $19.9 million net increase in accounts payable and accrued liabilities from December 31, 2014, driven by increases in accrued marketing expenses, trade accounts payable, accrued e-commerce and the expected timing of payment of these balances. Additionally, an increase in total combined deferred advertising revenue, offset by a corresponding decline in total combined deferred membership revenue, resulted in a net $1.7 million increase to operating cash flow for the six months ended June 30, 2015, reflecting the impact of increases in service provider contract values and concurrent decreases in membership revenue per paid membership. Non-cash activity, including $4.5 million in stock-based compensation expense, $3.2 million in depreciation and amortization and $0.7 million for a non-cash long-lived asset impairment charge, accounted for a $9.0 million positive contribution to operating cash flows for the first half of 2015. Uses of cash from operations for the period included a $3.3 million increase in prepaid expenses and other current assets associated with certain technology and marketing service agreements.

Net Cash (Used In) Investing Activities

Our use of cash in investing activities of $12.3 million for the six months ended June 30, 2016 was primarily attributable to the total combined $12.2 million in capital expenditures for property, equipment and software during the period, consisting of $9.0 million in capitalized website and software development costs related to our new technology platform as well as $3.2 million for facilities improvements and technology hardware and software.

 Our use of cash in investing activities of $15.8 million for the six months ended June 30, 2015 was largely attributable to the total combined $17.4 million in capital expenditures for property, equipment and software during the first half of 2015, consisting of $13.8 million for capitalized website and software development as well as $3.5 million for facilities improvements and upgrades and additions to technology hardware and software. Sales of short-term investments at maturity, net of purchases of short-term investments, which amounted to $1.8 million for the six months ended June 30, 2015, partially offset our use of cash in investing activities related to capital expenditures.  

29

Net Cash (Used In) Financing Activities

Net cash used in financing activities for the six months ended June 30, 2016 was attributable to the combined impact of taxes paid for net share settlements associated with the vesting of restricted stock units and payments on our capital lease obligation, partially offset by proceeds from stock option exercises.

Net cash used in financing activities for the six months ended June 30, 2015 was entirely attributable to payments on our capital lease obligation.

Debt Obligations

On September 26, 2014, we entered into an $85.0 million financing agreement, comprised of a $60.0 million term loan and a $25.0 million delayed draw term loan, to provide increased financial flexibility for investments in growth while simultaneously reducing our interest rate. On June 10, 2016, in connection with the decision to remove our ratings and reviews paywall, we entered into a first amendment to the financing agreement which, among other things, (i) extended the commencement of our quarterly repayment obligations from September 30, 2016 to September 30, 2017; (ii) revised the financial covenants for minimum consolidated EBITDA, as defined in the financing agreement, for periods ending after June 30, 2016, (iii) revised the financial covenant related to minimum required liquidity from $10.0 million to $30.0 million; (iv) removed the financial covenant related to minimum membership revenue for periods ending after March 31, 2016; and (v) modified the basis for the calculation of the applicable interest rate.

In accordance with the first amendment to the financing agreement, unless and until our consolidated EBITDA exceeds $30.0 million for any four consecutive fiscal quarters ending after June 10, 2016, amounts outstanding under the financing agreement bear interest at a per annum rate, at our option, equal to (i) the LIBOR rate for the interest period in effect, subject to a floor of 0.5%, plus 7.25% or (ii) the reference rate, which is based on the prime rate as published by the Wall Street Journal, subject to a floor of 3.25%, plus 6.25%. Should our consolidated EBITDA exceed $30.0 million for any four consecutive fiscal quarters ending after June 10, 2016, amounts outstanding under the financing agreement will bear interest thereafter at a per annum rate, at our option, equal to, in accordance with the basis for the calculation of the applicable interest rate set forth in the original financing agreement, (i) the LIBOR rate for the interest period in effect, subject to a floor of 0.5%, plus 6.75% or (ii) the reference rate, subject to a floor of 3.25%, plus 5.75%.

The financing agreement requires monthly interest payments on the first business day of each month until maturity on any principal amounts outstanding under either debt facility. The financing agreement further obligates us to make quarterly principal payments on the term loan of $0.8 million on the last day of each calendar quarter, commencing with the quarter ending September 30, 2017, and to repay the remaining balance of the term loan at maturity. We are required to make principal payments on the outstanding balance of the delayed draw term loan equal to 1.25% of the amount of such loan funded at or prior to the last day of each calendar quarter, commencing with the quarter ending September 30, 2016, and to repay the remaining outstanding balance of the delayed draw term loan at maturity.

We may prepay the amounts outstanding under the financing agreement at any time and are required to prepay the loans with (i) the net proceeds of certain asset sales, issuances of debt or equity, and certain casualty events, and (ii) up to 50% of consolidated excess cash flow, as defined in the financing agreement, for each fiscal year during the term of the financing agreement, commencing with the year ended December 31, 2015. As specified by the first amendment to the financing agreement, we must pay a 1% premium on prepayments made on or before June 10, 2017, subject to certain exceptions as set forth in the financing agreement. Our obligations under the financing agreement are guaranteed by each of our subsidiaries and are secured by first priority security interests in all of our respective assets and a pledge of the equity interests of our subsidiaries. The term loan and the delayed draw term loan mature on September 26, 2019. As of June 30, 2016, we had $58.0 million in outstanding borrowings, net of unamortized deferred financing fees of $1.3 million and unamortized fees paid to the lender of $0.8 million, under the term loan and availability of $25.0 million under the delayed draw term loan.

The financing agreement contains various restrictive covenants, including restrictions on our ability to dispose of assets, make acquisitions or investments, incur debt or liens, make distributions to stockholders or repurchase outstanding stock, enter into related-party transactions and make capital expenditures. We are also required to comply with certain financial covenants, including minimum consolidated EBITDA as defined in the financing agreement, minimum liquidity and maximum consolidated capital expenditures. Upon an event of default, which includes, among other things, a failure to make required payments when due, a failure to comply with covenants, certain bankruptcy and insolvency events, defaults under other material indebtedness, or a change in control, the lenders may accelerate amounts outstanding, terminate the agreement and foreclose on all collateral. We were in compliance with all financial and non-financial covenants at June 30, 2016.

30

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet activities, other than long-term noncancellable operating leases as described herein, nor do we maintain any off-balance sheet interests in variable interest entities, special-purpose entities or other structured finance entities.

Contractual Obligations

Our contractual obligations primarily consist of long-term noncancellable operating leases expiring through 2021 and long-term debt comprised of a $60.0 million term loan scheduled to mature on September 26, 2019. There were no material changes in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015. Total combined future minimum payment obligations under long-term noncancellable operating leases amounted to approximately $8.2 million as of June 30, 2016, and we had $58.0 million in outstanding borrowings, net of unamortized deferred financing fees and unamortized fees paid to the lender, under the term loan as of the same date. 

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of the condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates. With respect to critical accounting policies, we believe there is now sufficient historical data available for the volatility of our common stock, and as such, we began utilizing our own historical volatility data for the volatility input to our calculation of the estimated fair value of stock option awards in the determination of stock-based compensation expense in 2016. There were no other material changes to our critical accounting policies and estimates from those described in our Annual Report on Form 10-K for the year ended December 31, 2015.

Recent Accounting Pronouncements

For detailed information regarding recently issued accounting pronouncements and the expected impact on our condensed consolidated financial statements, see Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” in the accompanying Notes to Condensed Consolidated Financial Statements included in Item 1. of Part I of this Form 10-Q.

31

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in our exposure to market risk since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2015. Please refer to Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2015 for a more complete discussion of the market risks we encounter.

ITEM  4.     CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in U.S. Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the second quarter of 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

32

PART II – OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

Information pertaining to legal proceedings can be found in Part I, Item 1. “Condensed Financial Statements” — Note 9, “Commitments and Contingencies,” of this Quarterly Report on Form 10-Q and is incorporated by reference herein.

ITEM 1A.     RISK FACTORS

Investing in our common stock involves a high degree of risk. In addition to the information set forth in this Quarterly Report on Form 10-Q, including in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended December 31, 2015 and in Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, as well as the risk factor discussed below, all of which could materially affect our business, financial condition and future results. These risks are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may become important factors that may materially affect our business, financial condition and future results. The trading price of our common stock could decline due to any of these risks or uncertainties, and you may lose all or part of your investment.

The covenants in the financing agreement that governs our current indebtedness may limit our operating and financial flexibility.

The covenants in the financing agreement limit our ability to:

• incur debt and liens;

• pay dividends;

• make redemptions and repurchases of capital stock;

• make loans and investments;

• make capital expenditures;

• prepay, redeem or repurchase debt, other than under the financing agreement;

• engage in acquisitions, consolidations, asset dispositions, sale-leaseback transactions and affiliate transactions;

• change our business;

• amend our material agreements;

• issue and sell capital stock of subsidiaries;

• receive distributions from subsidiaries; and

• grant negative pledges to other creditors.

The financing agreement also requires us to comply with certain financial covenants, including minimum consolidated EBITDA, minimum liquidity and maximum consolidated capital expenditures and is secured by a pledge of substantially all of our assets and, through a delayed draw term loan facility, provides a source of liquidity to enable us to fund our current and future operations. A breach of any of the covenants or requirements in the financing agreement could result in a default under the financing agreement, unless we are able to obtain the necessary waivers or amendments. Upon the occurrence of an event of default that is not waived, and subject to any appropriate cure periods, the lenders could elect to exercise any of their available remedies, which may include the right to not lend any additional amounts to us or, in certain instances, to declare all outstanding borrowings, together with accrued interest and other fees, to be immediately due and payable. If we are unable to repay the borrowings with respect to the financing agreement when due, the lender would be permitted to proceed against our collateral. If the lender takes any or all of these steps, our business, financial condition or results of operations could be materially and adversely impacted, and we may be unable to continue to fund our operations.

33

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    OTHER INFORMATION

None.

ITEM  6.    EXHIBITS

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
3.01	Third Amended and Restated Certificate of Incorporation	S-1/A	333-176503	3.1	10/31/2011
3.02	Amended and Restated Bylaws	S-1/A	333-176503	3.2	10/31/2011
10.01	First Amendment to Financing Agreement, dated as of June 10, 2016, by and among Angie's List, Inc., subsidiaries of Angie's List, Inc., the lenders party thereto and TCW Asset Management Company as Collateral Agent and Administrative Agent	8-K	001-35339	10.01	6/15/2016
10.02	Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of June 10, 2016, by AL Real Estate Holdings, LLC to and for the benefit of TCW Asset Management Company	8-K	001-35339	10.02	6/15/2016
10.03	Employment Agreement, dated December 10, 2015, by and between Angie's List, Inc. and Darin E. Brown					X
10.04	Employment Agreement, dated February 18, 2016, by and between Angie's List, Inc. and Shannon M. Shaw					X
10.05	Form of Performance Award Attributable to Restricted Stock Unit Agreement under the Amended and Restated Omnibus Incentive Plan for Executive Officer - Long-Term Incentive Plan					X
31.01	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act					X
31.02	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act					X
32.01	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act *					X
32.02	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act *					X
101	Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015 and (iv) Notes to Condensed Consolidated Financial Statements					X

* Furnished, not filed.

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on July 28, 2016.

ANGIE’S LIST, INC.
By:	/s/ CHARLES HUNDT
Name:	Charles Hundt
Title:	Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer)

35

EXHIBIT INDEX

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
3.01	Third Amended and Restated Certificate of Incorporation	S-1/A	333-176503	3.1	10/31/2011
3.02	Amended and Restated Bylaws	S-1/A	333-176503	3.2	10/31/2011
10.01	First Amendment to Financing Agreement, dated as of June 10, 2016, by and among Angie's List, Inc., subsidiaries of Angie's List, Inc., the lenders party thereto and TCW Asset Management Company as Collateral Agent and Administrative Agent	8-K	001-35339	10.01	6/15/2016
10.02	Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of June 10, 2016, by AL Real Estate Holdings, LLC to and for the benefit of TCW Asset Management Company	8-K	001-35339	10.02	6/15/2016
10.03	Employment Agreement, dated December 10, 2015, by and between Angie's List, Inc. and Darin E. Brown					X
10.04	Employment Agreement, dated February 18, 2016, by and between Angie's List, Inc. and Shannon M. Shaw					X
10.05	Form of Performance Award Attributable to Restricted Stock Unit Agreement under the Amended and Restated Omnibus Incentive Plan for Executive Officer - Long-Term Incentive Plan					X
31.01	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act					X
31.02	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act					X
32.01	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act*					X
32.02	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act*					X
101	Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015 and (iv) Notes to Condensed Consolidated Financial Statements					X

* Furnished, not filed.

36

EX-10.03

Exhibit 10.03

December 10, 2015

Mr. Darin Brown

8736 Corinthian Lane

Indianapolis, IN 46236

Dear Darin:

On behalf of Angie’s List, Inc. (the “Company”), we are very pleased to extend this offer to you for the position of Chief Technology Officer with an effective promotion date of December 14, 2015, which upon your acceptance will become an employment agreement between you and the Company (the “Agreement”):

1. Employment. In your role as the Company’s Chief Technology Officer, you will perform duties and responsibilities that are commensurate with your position and such other duties as may be assigned to you from time to time. You will report directly to the Chief Executive Officer of the Company. You agree to devote your full business time, best efforts, skill, knowledge, attention, and energies to the advancement of the Company’s business and interests and to the performance of your duties and responsibilities as an employee of the Company. Nothing herein, however, shall prohibit you from engaging in civic and charitable activities, provided that such activities do not interfere with the performance of your duties and are not undertaken during business time without prior Board approval. Any service on a for-profit entity must be approved in advance by the Board and will be subject to such conditions as the Board may establish. You agree to abide by the rules, regulations, instructions, personnel practices and policies of the Company, and any changes therein that may be adopted from time to time by the Company. Your principal place of employment shall continue to be at our headquarters in Indianapolis, Indiana, subject to business travel as needed to properly fulfill your employment duties and responsibilities. You have already provided proof of eligibility to work in the United States and completed a satisfactory background check.

2. Base Salary. Your current, annualized base salary is set at Three Hundred Thirty Five Thousand Dollars and Zero Cents ($335,000.00), less all applicable taxes and withholdings, payable in installments in accordance with the Company’s regular payroll practices.

3. Annual Performance Bonus (Beginning in Fiscal Year 2016). Following the end of each fiscal year, excluding the 2015 fiscal year, you will be eligible to receive a retention and performance bonus of 60% at target. Any bonus amount you may receive for a given fiscal year (the “Annual Discretionary Bonus”) will be as determined by the Board at its sole discretion and pursuant to its bonus practices and policies as they may exist from time to time. You must be an active employee of the Company on the date any Annual Discretionary Bonus is distributed in order to be eligible for and to earn any such bonus award.

4. Benefits and Perquisites. During your employment, you shall be entitled to participate in all generally applicable employee retirement, health and welfare and disability benefit plans, practices and programs maintained by the Company, as in effect from time to time (collectively, "Employee Benefit Plans"), on a basis which is no less favorable than is provided to other similarly situated executives of the Company, to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. You will also be entitled to the fringe benefits and perquisites that are made available to other similarly situated executives of the Company, each in accordance with and subject to the eligibility and other provisions of such plans and programs. The Company reserves the right to amend, modify or terminate any of its benefit plans or programs at any time and for any reason, subject to the terms of such Employee Benefit Plan and applicable law.

5. Vacation and Days Off. You will be entitled to the number of days of paid time off per year that you determine is necessary in your reasonable discretion.

6. Proprietary Information. You hereby confirm and reaffirm your obligations to the Company as set forth in the Employee Proprietary Information and Inventions Agreement you previously executed for the benefit of the Company. Notwithstanding anything herein to the contrary, any confidentiality, non-disclosure or similar provision in this agreement or the Employee Proprietary Information and Inventions Agreement does not prohibit or restrict you (or your attorney) from initiating communications directly with, or responding to any inquiry from, or providing testimony before, the SEC, FINRA, any other self-regulatory organization or any other state or federal regulatory authority, regarding this offer letter, your employment agreement or the underlying facts or circumstances related thereto.

7. Limited Non-Competition. Given your position of trust and confidence, and the access you will have to the highest levels of the Company’s proprietary information, it is very important for the Company to protect in a reasonable and limited manner its legitimate business interests by reasonably restricting your ability to unfairly compete with the Company. Accordingly, these prohibitions against unfair competition are drafted narrowly so as to be able to safeguard the Company’s legitimate business interests while not unreasonably interfering with your ability to obtain subsequent employment. The Company does not intend, and you acknowledge, that this limited non-competition provision is not an attempt to prevent you from obtaining other employment in violation of Indiana Code § 22-5-3-1 or similar law(s).

a. Because of Company's legitimate business interest as described herein and the good and valuable consideration offered to you described herein, beginning on the first day of your employment with Company and for a period of twelve (12) months thereafter, you agree and covenant not to engage in Prohibited Activity within the local services industry and Daily Deal industry.

b. For purposes of this non-compete clause:

i. “Prohibited Activity” is activity in which you contribute your knowledge, directly or indirectly, in whole or in part, in a competitive capacity as an employee, employer, owner, operator, manager, advisor, consultant, agent, employee, partner, director, stockholder, officer, volunteer, intern or any other similar capacity to a Competitor of Company. Prohibited Activity also includes activity that may require or inevitably require disclosure of Company’s trade secrets, proprietary information or Confidential Information.

ii. “Competitor of Company” includes HomeAdvisor, Groupon, Yelp, ReachLocal, LivingSocial, Red Beacon, Houzz, Task Rabbit, FrontPorch, Amazon Home Services, Thumbtack, Pro.com, and any other entity engaged in the same or similar business as the Company, including those engaged in the business of local service provider, Daily Deal, and similar e-commerce offerings.

c. Nothing herein shall prohibit you from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation provided that such ownership represents a passive investment and that you are not a controlling person of, or a member of a group that controls such corporation.

d. This Section shall be construed as independent of any other provision of this Agreement and shall survive the termination of this Agreement. The existence of any alleged claim or cause of action by you against Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Company of the non-competition provisions of this Agreement.

2

The parties agree the terms of this Section are reasonable, valid and enforceable. However, in the unlikely event a court of competent jurisdiction determines any of the terms, provisions, or covenants of this Section are unreasonable or overbroad, the court shall limit, modify or rewrite such term, provision or covenant and proceed to enforce those terms as so limited or modified to the fullest extent permissible under the law

8. Termination of Employment. Your employment hereunder may be terminated by either the Company or you at any time and for any reason or no reason. Upon termination of your employment, you shall be entitled to the compensation and benefits described in this Section 8 and shall have no further rights to any compensation or any other benefits from the Company or any of its affiliates.

a. Termination without Cause or For Good Reason. In the event that (a) your employment is terminated by the Company without Cause (as defined below) or by you for Good Reason (as defined below and in accordance with the process set forth below), (b) such termination does not occur in the 18-month period following a Change of Control (as defined below), and (c) within sixty (60) days following your termination date you timely execute and do not revoke a separation and release agreement drafted by and satisfactory to the Company (the “Separation Agreement”), the Company will provide you with the following payments (the “Severance Payments”):

i. Severance pay equal to twelve (12) months of your then current base salary, payable in bi-weekly installments on the Company’s usual payroll dates starting on the Payment Commencement Date (as defined below) and minus all applicable taxes and withholdings; and

ii. Should you be eligible for and timely elect to continue receiving group medical insurance pursuant to the federal “COBRA” law, the Company shall pay a stipend equal to the cost of the COBRA payment for a period of eighteen (18) months payable in installments on the Company’s usual payroll dates starting on the Payment Commencement Date, subject to all applicable taxation.

The Severance Payments shall commence on the sixtieth (60^th) day following your date of termination (the “Payment Commencement Date”); provided, however, that if by the 60th day following your date of termination the Severance Agreement has not become binding, then you shall not be entitled to the Severance Payments and the Severance Payments shall not be paid or commence. All Severance Payments shall be subject to the terms and conditions set forth in Section 13 below and subject to your continued compliance with Paragraphs 6 and 7 above.

For purposes hereof, “Cause” shall mean a determination by the Company (which determination shall not be arbitrary or capricious) that: (i) you were convicted of, or pled nolo contendere to, a felony (regardless of the nature of the felony), or a crime of moral turpitude, (ii) you engaged in theft, embezzlement, bribery, dishonesty, or fraud, (iii) you engaged in or acted with willful misconduct in connection with the performance of your duties and responsibilities to the Company or any of its subsidiaries which was injurious to the Company or any of its subsidiaries, (iv) you acted with recklessness in the performance of your duties, (v) you willfully failed to follow the lawful directives of the Board, or (vi) you willfully breached any written agreement or obligation to the Company or any of its subsidiaries.

b. Termination without Cause or For Good Reason within 18 Months Following a Change of Control. In the event that your employment is terminated by the Company without Cause or by you for Good Reason, in each case within the 18-month period following a Change of Control (as defined below), and provided that within sixty (60) days following your termination date you timely execute and do not revoke the Separation Agreement, the Company will provide you with the following payments and benefits (the “Change of Control Benefits”):

3

i. Severance pay equal to twenty four (24) months of your then current base salary, payable in bi-weekly installments on the Company’s usual payroll dates starting on the Payment Commencement Date and minus all applicable taxes and withholdings;

ii. Should you be eligible for and timely elect to continue receiving group medical insurance pursuant to the federal “COBRA” law, the Company shall pay a stipend equal to the cost of the COBRA payment for a period of eighteen (18) months payable in installments on the Company’s usual payroll dates starting on the Payment Commencement Date, subject to all applicable taxation; and

The Change of Control Benefits shall be paid or commence, as applicable, on the Payment Commencement Date. All Change of Control Benefits shall be subject to the terms and conditions set forth in Section 13 below and subject to your continued compliance with Paragraphs 6 and 7 above.

For purposes hereof, “Change of Control” means, with respect to the Company, any of the following events: (i) the sale of all or substantially all of the business, properties, and assets of the Company to a person or entity that is not controlled by the persons or entities who were shareholders of the Company immediately prior to such sale, (ii) any reorganization, merger, consolidation, sale, or exchange of securities in which the Company does not survive and the surviving entity is not controlled by the persons or entities who were shareholders of the Company immediately prior to such event, or (iii) any acquisition by any person or group (as defined in Section 13d of the Exchange Act) of beneficial ownership of more than 50% of the then outstanding shares of the Company's common stock.

For purposes hereof, the term “Good Reason” shall mean one or more of the following conditions arising without your consent: (i) a material diminution in your base compensation; or (ii) a material diminution in your authority, duties, or responsibilities. To be entitled to terminate your employment for Good Reason, you must (i) provide written notice to the Company of the event or change you consider constitutes “Good Reason” within 30 calendar days following its occurrence, (ii) provide the Company with a period of at least 30 calendar days to cure the event or change, and (iii) if the Good Reason persists following the cure period, actually resign by written resignation letter within 90 calendar days following the event or change.

Notwithstanding anything contained in this Agreement to the contrary, if your employment is terminated within three (3) months prior to a Change in Control and you reasonably demonstrate that such termination (i) was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control and who effectuates a Change in Control or (ii) otherwise occurred in connection with, or in anticipation of, a Change in Control which actually occurs, then for all purposes of this Agreement, the date of a Change in Control with respect to you shall mean the date immediately prior to the date of your termination of employment.

Notwithstanding anything in this Agreement to the contrary, in the event that it shall be determined (as hereinafter provided) that any payment or distribution by the Company to or for the benefit of you, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement, or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any grants under the Company’s Amended and Restated Omnibus Incentive Plan, any stock option, restricted stock, restricted stock unit, stock appreciation right or other right, or the lapse or termination of any restriction on, or the vesting or exercisability of, any of the foregoing (in the aggregate “Total Payments”), would be subject, but for the application of this paragraph, to the excise tax imposed by Code Section 4999 (or any successor provision thereto) (the “Excise Tax”) by reason of being considered “contingent on a change in ownership or control” of the Company and as being considered an “excess parachute payment,” both within the meaning of Code Section 280G (or any successor provision thereto), then:

4

(a)    If the aggregate Parachute Value (as defined below) of the Total Payments is 110% or less than the Safe Harbor Amount (as defined below), then the payments payable to you shall be reduced to such an amount so that Total Payments will be capped to the extent necessary so that Total Payments will equal the Safe Harbor Amount and no Excise Tax will be triggered.

(b)    If, however, the aggregate Parachute Value of the Total Payments exceeds 110% of the Safe Harbor Amount, then the payments payable to you shall not be reduced but instead, the full amount of Total Payments shall be paid to you and the Excise Tax will be triggered.

“Safe Harbor Amount” is the maximum aggregate Parachute Value of the Total Payments that may be paid or distributed to you or for your benefit without triggering the Excise Tax because such amount is less than three times your “base amount,” within the meaning of Code Section 280G. The “Parachute Value” of the Total Payments is the aggregate present value as of the date of the Change in Control of that portion of the Total Payments that constitutes “parachute payments,” within the meaning of Code Section 280G. The calculation of the Total Payments, the Safe Harbor Amount, and the Parachute Value, as well as the method in which the reduction in payments under this paragraph will be applied, shall be conducted and determined by a national accounting firm selected by the Company and its determinations shall be binding on the Company and you.

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

c. Termination Due to Death or Disability. In the event that your employment is terminated by the Company due to your death or Disability (as defined below), you or your estate, as applicable, shall be entitled to your unpaid base salary through the date of your termination of employment, payable on the regular payday immediately following such termination date. You will not be entitled to any other compensation or consideration, including any bonus not yet paid, that you may have received had your employment with the Company not ceased.

For purposes hereof, “Disability” shall be defined as your inability to perform the essential functions of your job duties despite reasonable accommodations by virtue of illness or physical or mental incapacity or disability (from any cause or causes whatsoever) in substantially the manner and to the extent required prior to the commencement of such disability for periods aggregating to 180 days or more, whether or not continuous, within any continuous period of two (2) years.

d. Termination at Any Time for Cause or Without Good Reason. In the event that your employment is terminated at any time by the Company for Cause or by you without Good Reason, you will be entitled only to your unpaid base salary through the date of your termination of employment, which shall be paid on the regular payday immediately following your termination date. You will not be entitled to any other compensation or consideration, including any bonus not yet paid, that you may have received had your employment with the Company not ceased.

9. Cooperation. The parties agree thatcertain matters in which you will be involved during your employment may necessitate your cooperation in the future. Accordingly, following the termination of your employment for any reason, to the extent reasonably requested by the Board, you shall cooperate with the Company in connection with matters arising out of your service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of your other activities. The Company shall reimburse you for reasonable expenses incurred in connection with such cooperation and, to the extent that you are required to spend substantial time on such matters, the Company shall compensate you at an hourly rate.

10. Stock Ownership Requirements. As the Company’s Chief Technology Officer, you will be required to comply with the Company's Stock Ownership Requirements applicable to executive officers.

5

11. No Conflict. You represent and warrant that you are not bound by any employment contract, restrictive covenant, or other restriction preventing you from carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this Agreement. You further represent and warrant that you will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or others.

12. At-Will Employment. This Agreement shall not be construed as an agreement, either expressed or implied, to employ you for any stated term and shall in no way alter the Company’s policy of employment at-will under which both the Company and you remain free to end the employment relationship for any reason, at any time, with or without cause or notice. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at-will” nature of your employment may only be changed by a written agreement signed by you and the Chairman of the Board that expressly states the intention to modify the at-will nature of your employment.

Similarly, other than as set forth in Section 8 above, nothing in this Agreement shall be construed as an agreement, either expressed or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company. Notwithstanding the foregoing, following your termination of employment with the Company, you will be reimbursed for all reimbursable expenses reasonably incurred in the course of your work for the Company and documented in accordance with the Company’s then current expense reimbursement policies and practices. Any such reimbursements shall be subject to Section 14(c) below.

13. Section 409A.

a. To the extent possible under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), any taxable benefits or payments provided under this Agreement are intended to be separate payments that qualify for the “short-term deferral” exception to Section 409A (as described in Treasury Regulation Section 1.409A-1(b)(4)) to the maximum extent possible, and to the extent they do not so qualify, for the “separation pay plan” exceptions to Section 409A (as described in Treasury Regulation Section 1.409A-1(b)(9)) to the maximum extent possible. A termination of your employment by the Company without Cause or by you for Good Reason is intended to constitute an “involuntary separation from service” and in turn a “substantial risk of forfeiture” under the meaning of Section 409A.

b. To the extent a payment to you is deferred compensation under Section 409A, any payments provided to you shall begin only upon the date of your “separation from service” (determined as set forth below), which occurs on or after the date of your termination of employment. If, as of the date of your separation from service from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each of the payments shall be made on the dates and terms set forth in this Agreement as applicable. If, as of the date of your separation from service from the Company, you are a “specified employee” (within the meaning of Section 409A), then: each of the payments due pursuant to this Agreement that is deferred compensation under Section 409A and that would, absent this subsection, be paid within the six-month period following your separation from service from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such payments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent payments, if any, being paid in accordance with the dates and terms set forth herein. The determination of whether and when your separation from service from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-l(h). Solely for purposes of this subsection (b), “Company” shall include all persons with whom the Company would be considered a single employer as determined under Treasury Regulation Section 1.409A-l(h)(3).

6

c. All reimbursements and in-kind benefits provided for in this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

d. With respect to any provision that provides for reimbursement of medical expenses, such provision shall be interpreted in accordance with Treasury Regulation Section 1.409A-1(b)(9)(v)(A).

e. Notwithstanding anything herein to the contrary, the Company shall have no liability to you or to any other person if the payments and benefits provided pursuant to this Agreement that are intended to be exempt from or compliant with Section 409A are not so exempt or compliant.

14. Clawback. Any and all amounts payable hereunder are subject to the Executive Compensation Recovery Policy established by the Compensation Committee from time to time providing for clawback or recovery of amounts that were paid to you. The Compensation Committee of the Board will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulation.

15. Restricted Stock Units and/or Other Equity Program. As part of your promotion, you will be awarded a value of $250,000 of Restricted Stock Units effective December 14, 2015. This grant will consist of Restricted Stock Units (“RSUs”) with the number based on the Company’s closing stock price at the grant to equal the total award value, which shall vest 1/4^th on each of the first four anniversary dates of the grant date. The grant will be made pursuant to the Company’s Amended and Restated Omnibus Incentive Plan and will be subject to your prompt execution of the award agreement required by the Company. To the extent the Company has or offers any other equity program, then you will participate in such program in the same manner as other similarly situated employees.

16. Non-Solicitation of Employees. You understand and acknowledge that the Company has expended and continues to expend significant time and expense in recruiting and training its employees and that the loss of employees would cause significant and irreparable harm to the Company. You agree and covenant not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company during twenty-four (24) months, to run consecutively, beginning on the last day of your employment with the Company.

17. Indemnification. You will be indemnified pursuant to the Company’s standard indemnification agreement that you previously executed.

18. Pre-Litigation Mediation. You and the Company agree that prior to either party filing a lawsuit regarding any claims under this Agreement or any claims by one party against the other related to your employment with or separation of employment from the Company, we will engage in good faith in pre-litigation mediation pursuant to the then-current rules of the Indiana Supreme Court’s Rules of Court for Alternative Dispute Resolution regarding optional early or pre-litigation mediation. You and the Company agree that neither party will initiate a lawsuit until exhausting such pre-litigation mediation efforts. The only exception to this Section is that the Company may seek temporary or preliminary injunctive relief in court regarding your alleged or threatened breach of your obligations described in Section 7, Limited Non-Competition, herein.

7

19. Choice of Law and Forum. This Agreement shall be interpreted, construed, and governed by the laws of the State of Indiana, regardless of its place of execution or performance and without regard to conflict of laws principles. You agree that any cause of action regarding this Agreement shall be brought only in a court having jurisdiction over the Company in Indiana. By this section, you hereby expressly agree to personal jurisdiction over you in such State or Federal Court in Indiana and waive any entitlement you might otherwise have to a transfer of venue under State or Federal rules of procedure.

20. Entire Agreement; Binding on Successors. Unless specifically provided herein, this Agreement contains all of the understandings and representations between you and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. The parties mutually agree that this Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement. This Agreement shall not be assignable by you. This Agreement shall be binding upon the successors and assigns of the Company, including any successor in connection with a Change in Control.

21. Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by you and the chair of the Board. No waiver by either of the parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

22. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement.

The parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by law.

The parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been set forth herein.

23. Captions. Captions and headings of the sections and Sections of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or Section.

24. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

8

By accepting this offer, you represent and warrant that you are able to accept this position and carry out the work that it would involve without breaching any legal restrictions on your activities, such as non-competition, non-solicitation or other work-related restrictions imposed by a current or former employer. You also represent and warrant that you will inform the Company about any such restrictions and provide the Company with as much information about them as possible, including any agreements between you and your current or former employer describing such restrictions on your activities. You further confirm that you will not remove or take any documents or proprietary data or materials of any kind, electronic or otherwise, with you from your current or former employer to the Company without written authorization from your current or former employer, nor will you use or disclose any such confidential information during the course and scope of your employment with the Company. If you have any questions about the ownership of particular documents or other information, you should discuss such questions with your former employer before removing or copying the documents or information.

If you have any questions about the above details, please call me immediately. If you wish to accept this position, please sign below and return this Agreement to me.

Sincerely,
Angie's List
By:
	Scott Durchslag
	Chief Executive Officer

[SIGNATURE PAGE OF CANDIDATE FOLLOWS]

The foregoing correctly sets forth the terms of my at-will employment with Angie’s List, Inc. and I agree with the foregoing. By my execution below I accept this offer and this Agreement is a binding contract between me and the Company and enforceable against me. I am not relying on any representations other than those set forth above.

Darin E. Brown

EX-10.04

Exhibit 10.04

February 18, 2016

Ms. Shannon Shaw

3651 Haverhill Dr.

Indianapolis, IN 46240

(317) 860-0244 | shannons@angieslist.com

Dear Shannon:

On behalf of Angie’s List, Inc. (the “Company”) I am pleased to provide you with the following terms and conditions regarding your continued employment as Chief Legal Officer & Corporate Secretary with the Company:

1. Employment. In your role as Chief Legal Officer & Corporate Secretary, you agree to devote your full business time, best efforts, skill, knowledge, attention and energies to the advancement of the Company’s business and interests and to the performance of your duties and responsibilities as an employee of the Company. You will report directly to the Chief Executive Officer. You agree to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein that may be adopted from time to time by the Company. Your employment will continue to be based out of the Company’s headquarters in Indianapolis, Indiana. The effective date of of this notice is Thursday, February 18, 2016.

2. Base Salary. Your current, annualized base salary is set at $321,000.00, less all applicable taxes and withholdings, payable in installments in accordance with the Company’s regular payroll practices.

3. Discretionary Bonus Plan. You will be eligible to receive a retention and performance bonus of a target payment amount of 50% of your base salary. Any bonus amount you may receive for a given fiscal year (the “Discretionary Bonus”) will be as determined by the Company at its sole discretion and pursuant to its bonus practices and policies as they may exist from time to time. You must be an active employee of the Company on the date any Discretionary Bonus is distributed in order to be eligible for and to earn any such bonus award.

4. Benefits. During your employment, you shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company, as in effect from time to time (collectively, "Employee Benefit Plans"), on a basis which is no less favorable than is provided to other similarly situated executives of the Company, to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right to amend or cancel any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law.

5. Vacation and Days Off. It is at the discretion of the Executive Officer to schedule paid time off as needed.

6. Restrictive Covenants.

a. Proprietary Information. You hereby confirm and reaffirm your obligations to the Company as set forth in the Employee Proprietary Information and Inventions Agreement you previously executed for the benefit of the Company.

b. Limited Non-Competition During Employment. You agree that during your employment with Company, you will not, directly or indirectly, (i) have any ownership interest in, work for, advise, consult for, or have any business connection or business relationship with any person or entity that competes with the Company or that is planning to compete with the Company; (ii) recruit, solicit, or encourage, directly or indirectly, any employee of Company to separate from Company; (iii) recruit, solicit, or encourage, directly or indirectly, any customer of Company to cease or curtail its business with Company; or (iv) directly or indirectly market, sell or otherwise provide any products or services which are competitive with or substantially similar to any product or service produced, sold or distributed by the Company, to any customer of the Company.

7. Termination of Employment. Your employment may be terminated by either the Company or you at any time and for any reason. Upon termination of your employment, you shall be entitled to the compensation and benefits described herein and shall have no further rights to any compensation or any other benefits from the Company or any of its affiliates.

a. Termination without Cause. In the event that (a) your employment is terminated by the Company without Cause (as defined below), (b) such termination does not occur within the 3 month period prior to or within the 18 month period following Change of Control (as defined below), and (c) within sixty (60) days following your termination date you timely execute and do not revoke a separation and release agreement drafted by and satisfactory to the Company (the “Separation Agreement”), the Company will provide you with the following payments (the “Severance Payments”):

i. Severance pay equal to twelve (12) months of your then current base salary, payable in a lump sum on the Payment Commencement Date (as defined below); and

ii. The Company shall pay you an additional lump sum insurance stipend equal to eighteen (18) times the monthly COBRA premium that corresponds, as of the date of your termination of employment, to the health, dental, and vision coverage immediately prior to termination of employment. The stipend will be subject to all applicable withholdings and deductions, and will be paid to you on the same payroll date as the first installment of severance pay as defined below. You may apply the stipend towards the purchase of COBRA continuation coverage or for any other purpose. Provided, however, you will not be entitled to the Insurance Stipend should you voluntarily resign your employment or if the Company terminates your employment for Cause.

iii. The Severance Payments shall be paid or commence, as applicable, on the sixtieth (60th) day following your date of termination (the “Payment Commencement Date”); provided, however, that if by the 60th day following your date of termination the Severance Agreement has not become binding, then you shall not be entitled to the Severance Payments and the Severance Payments shall not be paid or commence. All Severance Payments shall be subject to the terms and conditions set forth herein.

iv. For purposes hereof, “Cause” shall mean a determination by the Company (which determination shall not be arbitrary or capricious) that: (i) you were convicted of, or pled nolo contendere to, a felony (regardless of the nature of the felony), or any other crime involving theft, embezzlement, bribery, dishonesty, fraud, or moral turpitude, (ii) you engaged in or acted with willful misconduct (including, but not limited to, acts of fraud, criminal activity, or professional misconduct) in connection with the performance of your duties and responsibilities to the Company or any of its subsidiaries which was injurious to the Company or any of its subsidiaries, (iii) you acted with recklessness or criminal fraud in the performance of your duties, or (iv) you willfully breached any written agreement or obligation to the Company or any of its subsidiaries.

b. Termination without Cause or For Good Reason the 3 Month Period Prior to or within the 18 Month Period Following a Change of Control. In the event that your employment is terminated by the Company without Cause or by you for Good Reason (as defined below and in accordance with the process set forth below), in each case within the 3 month period prior to or within the 18-month period following a Change of Control (as defined below), and provided that within sixty (60) days following your termination date you timely execute and do not revoke the Separation Agreement, the Company will provide you with the following payments and benefits (the “Change of Control Benefits”):

i. Severance pay equal to twenty-four (24) months of your then current base salary, payable in a lump sum on the Payment Commencement Date; and

ii. The Company shall pay you an additional lump sum insurance stipend equal to eighteen (18) times the monthly COBRA premium that corresponds, as of the date of your termination of employment, to the health, dental, and vision coverage immediately prior to termination of employment. The stipend will be subject to all applicable withholdings and deductions, and will be paid to you on the same payroll date as the first installment of severance pay as defined below. You may apply the stipend towards the purchase of COBRA continuation coverage or for any other purpose. Provided, however, you will not be entitled to the Insurance Stipend should you voluntarily resign your employment or if the Company terminates your employment for Cause.

iii. The Change of Control Benefits shall be paid or commence, as applicable, on the Payment Commencement Date. All Change of Control Benefits shall be subject to the terms and conditions set forth herein.

iv. For purposes hereof, “Change of Control” means, with respect to the Company, any of the following events: (i) the dissolution, liquidation, or sale of all or substantially all of the business, properties, and assets of the Company, (ii) any reorganization, merger, consolidation, sale, or exchange of securities in which the Company does not survive, (iii) any sale, reorganization, merger, consolidation, or exchange of securities in which the Company does survive and any of the Company's shareholders have the opportunity to receive cash, securities of another corporation, partnership, or limited liability company and/or other property in exchange for their capital stock of the Company, or (iv) any acquisition by any person or group (as defined in Section 13d of the Exchange Act) of beneficial ownership of more than 50% of the then outstanding shares of the Company's common stock.

v. For purposes hereof, the term “Good Reason” shall mean one or more of the following conditions arising without your consent and existing for no longer than an 18-month period before the date you terminate employment: (i) a material diminution in your base compensation; or (ii) a material diminution in your authority, duties, or responsibilities. To be entitled to terminate your employment for Good Reason, you must (i) provide written notice to the Company of the event or change you consider constitutes “Good Reason” within 30 calendar days following its occurrence, (ii) provide the Company with a period of at least 30 calendar days to cure the event or change, and (iii) if the Good Reason persists following the cure period, actually resign by written resignation letter within 90 calendar days following the event or change.

vi. Notwithstanding anything contained in this letter to the contrary, if your employment is terminated within three (3) months prior to a Change in Control and you reasonably demonstrate that such termination (i) was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control and who effectuates a Change in Control or (ii) otherwise occurred in connection with, or in anticipation of, a Change in Control which actually occurs, then for all purposes of this Agreement, the date of a Change in Control with respect to you shall mean the date immediately prior to the date of your termination of employment.

8. Termination Due to Death or Disability. In the event that your employment is terminated by the Company due to your death or Disability (as defined below), you or your estate, as applicable, shall be entitled to your unpaid base salary through the date of your termination of employment, payable on the regular payday immediately following such termination date. You will not be entitled to any other compensation or consideration, including any bonus not yet paid that you may have received had your employment with the Company not ceased.

For purposes hereof, “Disability” shall be defined as your inability to perform your job duties by virtue of illness or physical or mental incapacity or disability (from any cause or causes whatsoever) in substantially the manner and to the extent required prior to the commencement of such disability for periods aggregating to 180 days or more, whether or not continuous, within any continuous period of two (2) years.

9. Termination at Any Time for Cause or Without Good Reason. In the event that your employment is terminated at any time by the Company for Cause or by you without Good Reason, you will be entitled only to your unpaid base salary through the date of your termination of employment, plus any monies due to you under the provisions of Company’s Paid Time Off Policy, if applicable to you. You will be paid these amounts as soon as administratively possible on the Company’s first regular pay cycle following your termination date. You will not be entitled to any other compensation or consideration, including any bonus not yet paid that you may have received had your employment with the Company not ceased.

10. No Conflict. You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter. You further represent that you will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or others.

11. At-Will Employment. This letter shall not be construed as an agreement, either express or implied, to employ you for any stated term, and shall in no way alter the Company’s policy of employment at- will, under which both the Company, and you remain free to end the employment relationship for any reason, at any time, with or without cause or notice. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at-will” nature of your employment may only be changed by a written agreement signed by you and the Interim Chief Executive Officer of the Company that expressly states the intention to modify the at-will nature of your employment. Following your termination of employment with the Company you will be reimbursed for all reimbursable expenses reasonably incurred in the course of your work for the Company and documented in accordance with the Company’s then current expense reimbursement policies and practices.

12. Section 409A

a. It is intended that the payments and benefits provided under Paragraphs 3 and 7 shall be exempt from the application of the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). This letter shall be construed, administered, and governed in a manner that affects such intent. Specifically, any taxable benefits or payments provided under this letter are intended to be separate payments that qualify for the “short-term deferral” exception to Section 409A (as described in Treasury Regulation Section 1.409A- 1(b)(4)) to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the “separation pay plan” exceptions to Section 409A (as described in Treasury Regulation Section 1.409A-1(b)(9)) to the maximum extent possible and a termination of your employment by the Company without Cause or by you for Good Reason are intended to constitute an “involuntary separation from service” and in turn a “substantial risk of forfeiture” under the meaning of Section 409A.

b. To the extent a payment to you is deferred compensation under Section 409A, any payments provided to you shall begin only upon the date of your “separation from service” (determined as set forth below), which occurs on or after the date of your termination of employment. If, as of the date of your separation from service from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each of the payments shall be made on the dates and terms set forth in this letter as applicable. If, as of the date of your separation from service from the Company, you are a “specified employee” (within the meaning of Section 409A), then: (i) each of the payments due pursuant to this letter that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the separation from service occurs, be paid within the short-term deferral period (as defined in Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A; and (ii) each of the payments due pursuant to this letter that is not described in l (b)(i) above and that would, absent this subsection, be paid within the six-month period following your separation from service from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such payments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent payments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any severance payments and benefits if and to the maximum extent that such payment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-l(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). The determination of whether and when your separation from service from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-l(h). Solely for purposes of this subsection (b), “Company” shall include all persons with whom the Company would be considered a single employer as determined under Treasury Regulation Section 1.409A-l(h)(3).

c. All reimbursements and in-kind benefits provided for in this letter shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

d. With respect to any provision that provides for reimbursement of medical expenses, such provision shall be interpreted in accordance with Treasury Regulation Section 1.409A- 1(b)(9)(v)(A).

e. Notwithstanding anything herein to the contrary, the Company shall have no liability to you or to any other person if the payments and benefits provided pursuant to this letter that are intended to be exempt from or compliant with Section 409A are not so exempt or compliant.

13. Section 280G Golden Parachute Rules. Notwithstanding any provision to the contrary in this letter, if the payments and benefits due to you hereunder in connection with or following a change in control (as defined in Section 280G of the Internal Revenue Code), either alone or together with any other payments received or to be received by you from the Company (collectively, the “Aggregate Payments”), or any portion thereof, would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (or any successor thereto), the following provisions shall apply:

a. If the net amount that would be retained by you after all taxes on the Aggregate Payments are paid would be greater than the net amount that would be retained by you after all taxes are paid if the Aggregate Payments were limited to the largest amount that would result in no portion of the Aggregate Payments being subject to such excise tax, you shall be entitled to receive the Aggregate Payments.

b. If, however, the net amount that would be retained by you after all taxes were paid would be greater if the Aggregate Payments were limited to the largest amount that would result in no portion of the Aggregate Payments being subject to such excise tax, the Aggregate Payments to which you are entitled shall be reduced to such largest amount.

14. Pre-Litigation Mediation. You and the Company agree that prior to either party filing a lawsuit regarding any claims under this Agreement or any claims by one party against the other related to your employment with or separation of employment from Company, we will engage in good faith in pre-litigation mediation pursuant to the then-current rules of the Indiana Supreme Court’s Rules of Court for Alternative Dispute Resolution regarding optional early or pre-litigation mediation. You and Company agree that neither party will initiate a lawsuit until exhausting such pre-litigation mediation efforts. The only exception to this paragraph is that the Company may seek temporary or preliminary injunctive relief in court regarding your alleged or threatened breach of your obligations described herein under No Conflict.

15. Choice of Law and Forum. This Agreement shall be interpreted, construed and governed by the laws of the State of Indiana, regardless of its place of execution or performance. You agree that any cause of action regarding this Agreement shall be brought only in a court having jurisdiction over Company in Indiana. By this paragraph, you hereby expressly agree to personal jurisdiction over you in such State or Federal Court in Indiana and waive any entitlement you might otherwise have to a transfer of venue under State of Federal rules of procedure.

16. Entire Understanding; Binding on Successors. This letter supersedes all prior understandings and agreements, whether written or oral, relating to the terms of your employment. This letter shall not be assignable by you. This letter shall be binding upon the successors and assigns of the Company, including any successor in connection with a Change in Control.

Shannon, we look forward to you continuing your employment with Angie’s List. If this letter correctly sets forth the terms of your employment with the Company, please sign this letter in the space provided below and return it to Human Resources.

Sincerely,

Scott Durchslag

Chief Executive Officer

The foregoing correctly sets forth the terms of my at-will employment with Angie’s List, Inc. I am not relying on any representations other than those set forth above.

Shannon Shaw Date

EX-10.05

Exhibit 10.05

Angie’s List, Inc.

Amended and Restated Omnibus Incentive Plan

NOTICE OF PERFORMANCE AWARD ATTRIBUTABLE TO RESTRICTED STOCK UNIT GRANT

«Recipient»

You have been granted the following performance award attributable to performance-based restricted stock units (the “PRSUs”):

Date of Grant: June 29, 2016

Number of Shares Subject

to PRSU Award (at Target): [ __________ ]

Performance Commencement Date: April 1, 2016

Vesting Schedule: See attached Performance Award Attributable to Restricted Stock Unit Agreement.

By accepting these PRSUs, you agree that these PRSUs are granted under and governed by the terms and conditions of the Angie’s List, Inc. Amended and Restated Omnibus Incentive Plan, as amended (the “Plan”), this Notice and the Performance Award Attributable to Restricted Stock Unit Agreement (the “Agreement”), each of which are incorporated by reference herein. You also agree and acknowledge that you and the PRSUs are subject to the Executive Compensation Recovery Policy.

In addition, you agree and acknowledge that your rights to any Shares underlying the PRSUs will be earned only to the extent that you and the Corporation meet the performance criteria specified herein and you provide services to the Corporation over time and that nothing in this Notice, the Plan or the Agreement confers upon you any right to continue your employment with the Corporation for any period of time, nor does it interfere in any way with your right or the Corporation’s right to terminate that relationship at any time, for any reason or no reason, with or without cause.

	Angie’s List, Inc.
	By:
«Recipient»	Name: Thomas R. Fox
	Title: Chief Financial Officer

Angie’s List, Inc.

Amended and Restated Omnibus Incentive Plan

PERFORMANCE AWARD ATTRIBUTABLE TO RESTRICTED STOCK UNIT AGREEMENT

Angie’s List, Inc., a Delaware corporation (the “Corporation”), hereby grants to you (“Participant”) a performance award attributable to performance-based restricted stock units (“PRSUs”) representing an opportunity to Shares, as described below, subject to this Performance Award Attributable to Restricted Stock Unit Agreement (this “Agreement”) and the terms, definitions and provisions of the Corporation’s Amended and Restated Omnibus Incentive Plan (as amended, the “Plan”) adopted by the Corporation and the Notice of Performance Award Attributable to Restricted Stock Unit Grant (the “Notice”), each of which are incorporated in this Agreement by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings defined in the Notice or the Plan, as applicable. The terms and conditions of this Agreement, to the extent not controlled by the terms and conditions contained in the Plan, are as follows:

1. Performance Period. The performance period to which these PRSUs relate is the period of April 1, 2016 through December 31, 2018 (the “Performance Period”).

2. Performance-Based Vesting Condition.

(a) General. Subject to the Participant’s continued employment through the Vesting Date (as defined herein), the terms of the Notice, this Agreement and the Plan and the Corporation’s achievement of a threshold performance goal of $100 million in Adjusted EBITDA (as defined herein) during the Performance Period, the PRSUs shall vest based on the Corporation’s Total Cumulative Revenue (as defined herein) performance during the Performance Period, as follows:

Performance Level	Cumulative Total Revenue	Percentage of Target Award Opportunity Eligible for Vesting*
Below Threshold	Less than $1.051 Billion	0%
Threshold	At least $1.051 Billion	75%
Target	At least $1.136 Billion	100%
Stretch	At least $1.234 Billion or more	200%

* Linear interpolation shall be applied for Total Cumulative Revenue between the threshold and maximum performance levels.

(b) Definitions. For purposes of this Agreement, the performance goals shall be defined as follows:

“Adjusted EBITDA” shall mean the Corporation’s cumulative earnings before interest, income taxes, depreciation and amortization, non-cash stock-based compensation, contingent liabilities, and excluding the impact of litigation and adjustments related to litigation settlements, gain or loss on debt extinguishment, adjustments related to restructuring costs, non-cash long-lived asset impairment and disposal charges and advisor and other costs related to one-time events outside of normal business operations, including, but not limited to, acquisitions, dispositions, recapitalization (debt refinancing or equity-related transactions), special meeting(s) of shareholders and activist defense during the Performance Period as reported on the Company's quarterly earnings report. 

“Total Cumulative Revenue” shall mean the cumulative revenue of the Corporation during the Performance Period, determined in accordance with U.S. GAAP based on the Company’s quarterly reports.

1

3. Service-Based Vesting Condition.

(a) General. Subject to the satisfaction of the performance-based vesting conditions set forth herein and except as otherwise provided for in this Section 3, the PRSUs shall vest on May 31, 2019 (the “Vesting Date”), provided the Participant remains continuously employed by the Corporation or any of its subsidiaries through such date and any unvested PRSUs shall be forfeited without consideration upon the Participant’s Termination of Service prior to the Vesting Date.

(b) Termination due to Disability or Death. Notwithstanding the foregoing, if the Participant experiences a Termination of Service by the Corporation as a result of Disability (as defined below) or death prior to the Vesting Date, the performance goals shall be deemed satisfied based on actual performance through the date of Termination of Service due to Disability or death (or, in the event of a Termination of Service due to Disability or death following a Change in Control, the deemed performance level set forth in Section 3(c) of this Agreement), and a prorated portion of the PRSUs shall vest based on the number of full months during the Performance Period that the Participant was employed by the Corporation. For purposes hereof, “Disability” means Participant’s inability to perform the essential functions of his or her job duties despite reasonable accommodations by virtue of illness or physical or mental incapacity or disability (from any cause or causes whatsoever) in substantially the manner and to the extent required prior to the commencement of such disability for periods aggregating 180 days or more, whether or not continuous, within any continuous period of 2 years. In the event the PRSUs shall vest pursuant to this Section 3(a), the Shares will be issued, within 60 days following such Termination of Service as a result of Disability or death.

(c) Change in Control. Notwithstanding the foregoing, upon a Change in Control (as defined below) prior to the end of the Performance Period, the Adjusted EBITDA goal and the Cumulative Total Revenue goal shall be deemed satisfied, with the Cumulative Total Revenue goal deemed satisfied at the target performance level, and the Participant shall remain subject to the service-based vesting conditions set forth in this Agreement. In the event the Participant experiences a Termination of Service by the Corporation without Cause (as defined below) or a resignation by Participant for Good Reason (as defined below), in each case, within 18 months following a Change in Control and provided that within sixty (60) days following Participant’s termination date Participant timely executes and does not revoke a separation agreement releasing the Corporation and affiliates from all claims, a prorated portion of the PRSUs shall vest based on the deemed performance level specified in this Section 3(c) and prorated based on the number of full months during the Performance Period that the Participant was employed by the Corporation (provided, however, that if by the 60^th day following Participant’s date of termination the separation agreement has not become binding, then the Participant shall not be entitled to such benefit).

For purposes hereof, “Change of Control” means, with respect to the Corporation, any of the following events: (i) the sale of all or substantially all of the business, properties, and assets of the Corporation to a person or entity that is not controlled by the persons or entities who were shareholders of the Corporation immediately prior to such sale, (ii) any reorganization, merger, consolidation, sale, or exchange of securities in which the Corporation does not survive and the surviving entity is not controlled by the persons or entities who were shareholders of the Corporation immediately prior to such event, or (iii) any acquisition by any person or group (as defined in Section 13d of the Exchange Act) of beneficial ownership of more than 50% of the then outstanding shares of the Corporation's common stock.

For purposes hereof, the term “Good Reason” shall mean one or more of the following conditions arising without Participant’s consent: (i) any material decrease in Participant’s base compensation; (ii) a material diminution in Participant’s authority, duties or responsibilities with respect to the Corporation; (iii) any requirement that Participant be based in or regularly travel to another headquarters that is located more than 50 miles from Indianapolis, Indiana; and (iv) any material

2

breach of this Agreement by Corporation. To be entitled to terminate Participant’s employment for Good Reason, Participant must (i) provide written notice to the Corporation of the event or change Participant considers constitutes “Good Reason” within 30 calendar days following its initial occurrence, (ii) provide the Corporation with a period of at least 30 calendar days to cure the event or change, and (iii) if the Good Reason persists following the cure period, actually resign by written resignation letter within 90 calendar days following the event or change.

For purposes hereof, “Cause” shall mean that: (i) Participant was convicted of, or pled nolo contendere to, a felony (regardless of the nature of the felony), or any other crime involving theft, embezzlement, bribery, dishonesty, fraud, or moral turpitude; (ii) Participant engaged in or acted with willful misconduct (including, but not limited to, acts of fraud, criminal activity, or professional misconduct) in connection with the performance of Participant’s duties and responsibilities to the Corporation or any of its subsidiaries which was injurious to the Corporation or any of its subsidiaries; (iii) Participant acted with recklessness or criminal fraud in the performance of Participant’s duties; or (iv) Participant willfully breached any material agreement with the Corporation or any of its subsidiaries. For purposes of this Agreement, acts or omissions will be “willful” if such acts or omissions are taken in bad faith and without a reasonable belief that they were in the best interests of the Corporation and its subsidiaries.

4. Settlement of Award. Except as otherwise provided for in Section 3, Shares shall be issued with respect to vested PRSUs within 30 days following the Vesting Date, subject to the written certification by the Committee as to the achievement of the performance goals. As a condition to such issuance or payment, Participant shall have satisfied his or her tax withholding obligations and shall have completed, signed and returned any documents and taken any additional action that the Corporation deems appropriate to enable it to accomplish the delivery of the Shares. In no event will the Corporation be obligated to issue a fractional share. Notwithstanding the foregoing, (i) the Corporation shall not be obligated to deliver any Shares during any period when the Corporation determines that the conversion of a PRSU or the delivery of Shares hereunder would violate any federal, state or other applicable laws and/or may issue Shares subject to any restrictive legends that, as determined by the Corporation’s counsel, is necessary to comply with securities or other regulatory requirements, and (ii) the date on which Shares are issued, may include a delay, to the extent permitted under Section 409A, in order to provide the Corporation such time as it determines appropriate to address tax withholding and other administrative matters. Notwithstanding anything in this Agreement to the contrary, the Committee may elect, in its sole discretion, to settle a portion or all of the PRSUs in cash [based on the Fair Market Value of the PRSUs on the Vesting Date].

5. Tax Treatment. Any withholding tax liabilities (whether as a result of federal, state or other law and whether for the payment and satisfaction of any income tax, social security tax, payroll tax, or payment on account of other tax related to withholding obligations that arise by reason of the PRSUs) incurred in connection with the PRSUs becoming vested and Shares issued, or otherwise incurred in connection with the PRSUs, may be satisfied in any of the following manners: (i) by the sale by Participant of a number of Shares that are issued under the PRSUs, which the Corporation determines is sufficient to generate an amount that meets the tax withholding obligations plus additional shares to account for rounding and market fluctuations, and payment of such tax withholding to the Corporation, and such Shares may be sold as part of a block trade with other participants of the Plan; (ii) by the Corporation withholding a number of Shares or cash value that would otherwise be issued under the PRSUs that the Corporation determines have a fair market value equal to the minimum amount of taxes that the Corporation concludes it is required to withhold under applicable law (or, in the Corporation's sole discretion, such larger number of Shares with a fair market value in excess of the minimum required withholding that the Corporation determines may be withheld without an adverse accounting consequence); or (iii) by payment by Participant to the Corporation in cash or by check an amount equal to the minimum amount of taxes that the Corporation concludes it is required to withhold under applicable law. Participant hereby authorizes the Corporation to withhold such tax withholding amount from any amounts owing to Participant to the Corporation and to take any action necessary in accordance with this paragraph. Notwithstanding the foregoing, Participant acknowledges and agrees that he or she is responsible for all taxes

3

that arise in connection with the PRSUs becoming vested and Shares being issued or otherwise incurred in connection with the PRSUs, regardless of any action the Corporation takes pursuant to this Section.

6. Restrictions on Transfer. Participant understands and agrees that the PRSUs may not be sold, given, transferred, assigned, pledged or otherwise hypothecated by the holder.

7. Certificates. Certificates, transfer agent book entries or other evidence of ownership as determined by the Corporation issued in respect of the Shares shall, unless the Committee otherwise determines, be registered in the name of Participant. The stock certificate, if any, shall carry such appropriate legends, and such written instructions shall be given to the Corporation transfer agent, as may be deemed necessary or advisable by counsel to the Corporation in order to comply with the requirements of the Securities Act of 1933, any state securities laws or any other applicable laws.

8. No Stockholder Rights. Participant will have no voting, dividend or other rights as the Corporation’s other stockholders with respect to the PRSUs or with respect to the Shares until issuance of the Shares.

9. No Employment/Service Rights. Neither this Agreement nor the grant of the PRSUs hereby confers on Participant any right to continue in the employ or service of the Corporation or any subsidiary or interferes in any way with the right of the Corporation or any subsidiary to determine the terms of Participant’s employment or service.

10. Entire Agreement; Terms of Plan, Interpretations. Participant acknowledges that he or she has received and reviewed a copy of the Plan. The Plan and this Agreement (including the Notice) contains the entire understanding of the parties hereto in respect of the subject matter contained herein. This Agreement together with the Plan supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof. This Agreement and the terms and conditions herein set forth are subject in all respects to the terms and conditions of the Plan, which shall be controlling. All interpretations or determinations of the Committee and/or the Board shall be binding and conclusive upon Participant and his legal representatives on any question arising hereunder.

11. Compliance With Section 409A of the Code. This Award is intended to be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended, and shall be interpreted and construed accordingly. To the extent this Agreement provides for the Award to become vested and be settled upon the Participant’s termination of employment, the applicable Shares shall be transferred to the Participant or his or her beneficiary upon the Participant’s “separation from service,” within the meaning of Section 409A of the Code; provided that if the Participant is a “specified employee,” within the meaning of Section 409A of the Code, then to the extent the Award constitutes nonqualified deferred compensation, within the meaning of Section 409A of the Code, such Shares shall be transferred to the Participant or his or her beneficiary upon the earlier to occur of (i) the six-month anniversary of such separation from service and (ii) the date of the Participant’s death.

12. Section 280G. The Participant agrees and acknowledges that this Agreement and the PRSUs granted hereunder are subject to the 280G cutback provisions included in the Participant's employment agreement.

4

EX-31.01

Exhibit 31.01

Certification of Chief Executive Officer

Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Scott A. Durchslag, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Angie’s List, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2016

/s/ SCOTT A. DURCHSLAG

Scott A. Durchslag

Chief Executive Officer

(Principal Executive Officer)

EX-31.02

Exhibit 31.02

Certification of Chief Financial Officer

Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Thomas R. Fox, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Angie’s List, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2016

/s/ THOMAS R. FOX

Thomas R. Fox

Chief Financial Officer

(Principal Financial Officer)

EX-32.01

Exhibit 32.01

Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes – Oxley Act of 2002

I, Scott A. Durchslag, the Chief Executive Officer of Angie’s List, Inc., certify that (i) the quarterly report on Form 10-Q for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Angie’s List, Inc.

/s/ SCOTT A. DURCHSLAG

Scott A. Durchslag

Chief Executive Officer

(Principal Executive Officer)

July 28, 2016

Date

EX-32.02

Exhibit 32.02

Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes – Oxley Act of 2002

I, Thomas R. Fox, Chief Financial Officer of Angie’s List, Inc., certify that (i) the quarterly report on Form 10-Q for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Angie’s List, Inc.

/s/ THOMAS R. FOX

Thomas R. Fox

Chief Financial Officer

(Principal Financial Officer)

July 28, 2016

Date

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 25, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Angie's List, Inc.
Entity Central Index Key	0001491778
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		58,780,545

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 34,575,000	$ 32,599,000
Short-term investments	23,913,000	23,976,000
Accounts receivable, net of allowance for doubtful accounts of $2,187 and $1,658 at June 30, 2016 and December 31, 2015, respectively	16,890,000	17,019,000
Prepaid expenses and other current assets	18,298,000	19,026,000
Total current assets	93,676,000	92,620,000
Property, equipment and software, net	84,226,000	77,635,000
Goodwill	1,145,000	1,145,000
Amortizable intangible assets, net	1,609,000	2,011,000
Total assets	180,656,000	173,411,000
Liabilities and stockholders’ equity (deficit)
Accounts payable	7,614,000	10,525,000
Accrued liabilities	29,581,000	20,287,000
Less current maturities	0	1,500,000
Total current liabilities	112,907,000	113,944,000
Long-term debt, net	57,950,000	56,134,000
Other liabilities, noncurrent	1,152,000	1,332,000
Total liabilities	175,456,000	175,792,000
Commitments and contingencies (Note 9)	0	0
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value: 10,000,000 shares authorized, no shares issued or outstanding at June 30, 2016 and December 31, 2015	0	0
Common stock, $0.001 par value: 300,000,000 shares authorized, 67,336,563 and 67,162,990 shares issued and 58,777,851 and 58,604,278 shares outstanding at June 30, 2016 and December 31, 2015, respectively	67,000	67,000
Additional paid-in-capital	282,233,000	275,445,000
Treasury stock, at cost: 8,558,712 shares of common stock at June 30, 2016 and December 31, 2015	(23,719,000)	(23,719,000)
Accumulated deficit	(253,381,000)	(254,174,000)
Total stockholders’ equity (deficit)	5,200,000	(2,381,000)
Total liabilities and stockholders’ equity (deficit)	180,656,000	173,411,000
Deferred membership revenue [Member]
Liabilities and stockholders’ equity (deficit)
Deferred revenue, current	29,250,000	32,702,000
Deferred revenue, noncurrent	3,108,000	3,742,000
Deferred advertising revenue [Member]
Liabilities and stockholders’ equity (deficit)
Deferred revenue, current	46,462,000	48,930,000
Deferred revenue, noncurrent	$ 339,000	$ 640,000

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 2,187	$ 1,658
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	67,336,563	67,162,990
Common stock, shares outstanding	58,777,851	58,604,278
Treasury stock, at cost, shares of common stock	8,558,712	8,558,712

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenue
Membership	$ 15,645	$ 16,910	$ 31,979	$ 34,249
Service provider	67,415	70,425	134,937	136,629
Total revenue	83,060	87,335	166,916	170,878
Operating expenses
Operations and support	10,172	15,456	22,381	29,454
Selling	26,983	31,552	54,815	59,844
Marketing	14,432	28,726	33,547	47,555
Product and technology	13,323	9,571	23,357	17,987
General and administrative	11,995	9,586	30,042	18,312
Operating income (loss)	6,155	(7,556)	2,774	(2,274)
Interest expense, net	1,352	784	1,968	1,696
Income (loss) before income taxes	4,803	(8,340)	806	(3,970)
Income tax expense	6	9	13	19
Net income (loss)	$ 4,797	$ (8,349)	$ 793	$ (3,989)
Earnings Per Share, Basic	$ 0.08	$ (0.14)	$ 0.01	$ (0.07)
Earnings Per Share, Diluted	$ 0.08	$ (0.14)	$ 0.01	$ (0.07)
Weighted Average Number of Shares Outstanding, Basic	58,710,321	58,516,677	58,662,100	58,516,677
Weighted Average Number of Shares Outstanding, Diluted	59,643,950	58,516,677	59,637,852	58,516,677

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating activities
Net income (loss)	$ 793	$ (3,989)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	5,254	3,203
Amortization of debt discount, deferred financing fees and bond premium	333	355
Non-cash stock-based compensation	6,718	4,523
Asset Impairment Charges	0	686
Gain (Loss) on Disposition of Assets	171	279
Changes in certain assets:
Accounts receivable	129	(167)
Prepaid expenses and other current assets	728	(3,257)
Changes in certain liabilities:
Accounts payable	(2,542)	9,918
Accrued liabilities	9,557	10,002
Net cash provided by operating activities	14,286	23,208
Investing activities
Purchases of investments	(11,274)	(9,200)
Sales of investments	11,320	10,995
Property, equipment and software	(3,208)	(3,516)
Capitalized website and software development costs	(8,973)	(13,849)
Intangible assets	(129)	(206)
Net cash (used in) investing activities	(12,264)	(15,776)
Financing activities
Proceeds from exercise of stock options	500	0
Taxes paid on behalf of employees related to net share settlement	(430)	0
Payments on capital lease obligation	(116)	(108)
Net cash (used in) financing activities	(46)	(108)
Net increase in cash and cash equivalents	1,976	7,324
Cash and cash equivalents, beginning of period	32,599	39,991
Cash and cash equivalents, end of period	34,575	47,315
Supplemental cash flow disclosures
Capital expenditures incurred but not yet paid	820	1,643
Deferred advertising revenue [Member]
Changes in certain liabilities:
Deferred revenue	(2,769)	1,962
Deferred membership revenue [Member]
Changes in certain liabilities:
Deferred revenue	$ (4,086)	$ (307)

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

Angie’s List, Inc. (collectively with its wholly owned subsidiaries, the “Company”, “we”, “us” or “our”) operates a national local services consumer review service and marketplace where members can research, shop for and purchase local services for critical needs, such as home, health and automotive services, as well as rate and review the providers of these services. Ratings and reviews, which are now available to members free-of-charge, assist members in identifying and hiring a highly-rated provider for their local service needs. The Company's services are provided in markets located across the continental United States.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP were condensed or omitted pursuant to such rules and regulations. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all information and footnotes necessary for fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The accompanying unaudited condensed consolidated balance sheet as of December 31, 2015 was derived from the audited consolidated financial statements as of that date but does not include all disclosures required by U.S. GAAP, including certain notes thereto.

The condensed consolidated financial statements reflect all adjustments of a normal recurring nature considered, in the opinion of management, necessary to fairly present the results for the periods presented. Operating results from interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

For additional information, including a discussion of the Company’s significant accounting policies, refer to the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Operating Segments

Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company manages its business on the basis of one operating segment.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes as well as the disclosure of contingent assets and liabilities and reported revenue and expenses. Actual results could differ from those estimates.

Reclassification of Prior Year Presentation

Certain prior year amounts were reclassified for consistency with the current period presentation, including the marketing compensation and personnel-related costs and general marketing operating expenditures that were moved from general and administrative expense and selling expense to marketing expense within the consolidated statements of operations. These reclassifications did not materially impact the consolidated financial statements.

Significant Accounting Policies

As of January 1, 2016, the Company adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Update No. 2015-03: Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, resulting in the Company reclassifying the deferred financing fees previously recorded in other noncurrent assets, including $1,462 as of December 31, 2015, to net long-term debt in the consolidated balance sheets. There were no other material changes to the Company's significant accounting policies from those described in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Income Taxes - Valuation Allowance

The Company evaluates whether it will realize the benefits of its net deferred tax assets and establishes a valuation allowance to reduce the carrying value of its deferred tax assets to the amount considered more likely than not to be recognized. Deferred tax assets arise as a result of tax loss carryforwards and various differences between the book basis and the tax basis of such assets. The Company periodically reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences. Should there be a change in the ability to recover deferred tax assets, the tax provision would be adjusted in the period in which the assessment is changed. There was no change to the Company's assessment during the three or six month periods ended June 30, 2016.

While the Company reported net income for the three and six months ended June 30, 2016, any taxable income for these periods will ultimately be reduced by net operating loss carryforwards. The Company maintains a full valuation allowance against its deferred tax assets, and as a result, there is no federal income tax expense recorded in the condensed consolidated statement of operations for the three and six months ended June 30, 2016.

Contractual Obligations

The Company's contractual obligations primarily consist of long-term noncancellable operating leases expiring through 2021 and long-term debt comprised of a $60,000 term loan scheduled to mature on September 26, 2019. There have been no significant changes in the Company's contractual obligations from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Total combined future minimum payment obligations under long-term noncancellable operating leases amounted to approximately $8,152 as of June 30, 2016, and the Company had $57,950 in outstanding borrowings, net of unamortized deferred financing fees and unamortized fees paid to the lender, under the term loan as of the same date.

Stock-Based Compensation

On June 29, 2016, the Company granted 3,034,329 performance awards of restricted stock units (“PRSUs”) under a long-term incentive plan (the “2016 LTIP”) to its executive officers and other members of the Company’s senior leadership team as of that date. The PRSUs granted are contingent upon the Company’s performance with respect to certain predetermined Total Cumulative Revenue targets over the 33-month period commencing April 1, 2016 and concluding December 31, 2018, subject to the Company's achievement of a predetermined cumulative Adjusted EBITDA threshold over the same time period. The 3,034,329 PRSUs granted represent the number of shares to be issued at the 100% target achievement level for this award. The number of shares ultimately issued could be 0% or range from 75% (threshold achievement level) to 200% (maximum achievement level) of the granted amount based on the Company's performance in relation to the performance conditions, and linear interpolation will be applied should Total Cumulative Revenue fall between the threshold and maximum achievement levels. Any PRSUs earned under the 2016 LTIP will vest in full on May 31, 2019, subject to continued employment as of that date. The Company will recognize stock-based compensation expense for these awards over the vesting period based on the probable achievement of the aforementioned performance conditions as of the end of each reporting period during the performance period and may periodically adjust the recognition of such expense, as necessary, in response to any changes in the Company’s forecasts with respect to the performance conditions. For the three and six months ended June 30, 2016, stock-based compensation expense related to the 2016 LTIP was not material.

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No. 2016-13: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The amendments in this update add to U.S. GAAP a current expected credit loss impairment model that is based on expected losses rather than incurred losses, requiring consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. ASU 2016-13 will be effective for the Company in fiscal year 2020, but early adoption is permitted beginning in 2019. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09: Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendments in this update simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 will be effective for the Company in fiscal year 2017, but early adoption is permitted. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases (Topic 842) (“ASU 2016-02”). The amendments in this update require lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. ASU 2016-02 will be effective for the Company in fiscal year 2019, but early adoption is permitted. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01: Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. In particular, the amendments in this update supersede, for public business entities, the requirement to disclose the methods and significant assumptions used in calculating the fair value of financial instruments required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 will be effective for the Company in fiscal year 2018, but early adoption is permitted. The Company does not believe that the adoption of the guidance set forth in this update will have a material impact on the consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09: Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). This update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” This update also requires significantly expanded disclosures related to revenue recognition. ASU 2014-09 will be effective for the Company in fiscal year 2018 following the issuance of Accounting Standards Update No. 2015-14: Deferral of the Effective Date in August 2015, which deferred the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued Accounting Standards Update No. 2016-08: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), amending the principal-versus-agent implementation guidance set forth in ASU 2014-09. Among other things, ASU 2016-08 clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. In April 2016, the FASB issued Accounting Standards Update No. 2016-10: Identifying Performance Obligations and Licensing (“ASU 2016-10”), which amends certain aspects of the guidance set forth in the FASB's new revenue standard related to identifying performance obligations and licensing implementation. In May 2016, the FASB issued Accounting Standards Update No. 2016-12: Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), amending certain aspects of ASU 2014-09 to address implementation issues identified by the FASB's transition resource group and clarify the new revenue standard's core revenue recognition principles. The Company is currently evaluating the future impact and method of adoption of these updates with respect to the consolidated financial statements.

XML

Net Loss Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Net Loss Per Common Share

Net Income (Loss) Per Common Share

Basic and diluted net income (loss) per common share is computed by dividing consolidated net income (loss) by the basic and diluted weighted-average number of common shares outstanding, respectively, for the period. Basic net income (loss) per common share was $0.08 and $(0.14) for the three months ended June 30, 2016 and 2015, respectively, and $0.01 and $(0.07) for the six months ended June 30, 2016 and 2015, respectively. Diluted net income (loss) per common share was $0.08 and $(0.14) for the three months ended June 30, 2016 and 2015, respectively, and $0.01 and $(0.07) for the six months ended June 30, 2016 and 2015, respectively.

The following table shows the calculation of the diluted weighted-average number of common shares outstanding:

	Three Months Ended   June 30,		Six Months Ended   June 30,
	2016	2015	2016	2015
Weighted-average number of common shares outstanding — basic	58,710,321	58,516,677	58,662,100	58,516,677
Total dilutive effect of outstanding equity awards	933,629	—	975,752	—
Weighted-average number of common shares outstanding — diluted	59,643,950	58,516,677	59,637,852	58,516,677

The following potentially dilutive equity awards were not included in the diluted net income (loss) per common share calculation as they would have an antidilutive effect for the periods presented:

	Three Months Ended   June 30,		Six Months Ended   June 30,
	2016	2015	2016	2015
Stock options	7,376,383	7,535,129	7,358,351	7,535,129
Restricted stock units	2,315,818	879,393	2,274,574	879,393
Performance awards of restricted stock units	3,614,784	—	3,631,937	—

The PRSUs granted under the 2016 LTIP were not included in the computation of diluted weighted-average number of common shares outstanding as the number of shares that will ultimately be issued is contingent upon the Company's achievement of certain predetermined performance conditions and does not meet the criteria for inclusion per the applicable U.S. GAAP guidance.

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Whenever possible, quoted prices in active markets are used to determine the fair value of the Company's financial instruments. The Company's financial instruments are not held for trading or other speculative purposes. The estimated fair value of financial instruments was determined using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may materially impact the estimated fair value amounts.

Fair Value Hierarchy

Fair value is based on the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), the Company categorized the financial assets and liabilities that are adjusted to fair value based on the priority of the inputs to the valuation technique, following the three-level fair value hierarchy prescribed by ASC 820, as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

Level 3: Unobservable inputs that are used when little or no market data is available.

Valuation Techniques

The Company’s money market fund investments, the maturities for which are less than 90 days, are classified as cash equivalents within Level 1 of the fair value hierarchy on the basis of valuations using quoted market prices. Short-term investments consist of certificates of deposit, corporate bonds and U.S. Treasury securities with maturities of more than 90 days but less than one year. As many fixed income securities do not trade daily, fair values are often derived using recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data and industry and economic events. The Company’s fixed income certificates of deposit, U.S. Treasury securities and corporate bond investments with fixed maturities are valued using recent trades or pricing models and are therefore classified within Level 2 of the fair value hierarchy.

Recurring Fair Value Measurements

There were no movements between fair value measurement levels for the Company’s cash equivalents and investments in the first six months of 2016 or in 2015, and there were no material unrealized gains or losses as of June 30, 2016 or December 31, 2015.  

The following tables summarize the Company's financial instruments at fair value based on the fair value hierarchy for each class of instrument as of June 30, 2016 and December 31, 2015:

			Fair Value Measurement at June 30, 2016 Using
	Carrying Value at June 30, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	1,099	$	1,099	$	—	$	—
Investments:
Certificates of deposit	17,110		—		17,115		—
U.S. Treasury securities	6,803		—		6,810		—
Total assets	$	25,012	$	1,099	$	23,925	$	—

			Fair Value Measurement at December 31, 2015 Using
	Carrying Value at December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	970	$	970	$	—	$	—
Investments:
Certificates of deposit	19,310		—		19,292		—
U.S. Treasury securities	3,652		—		3,649		—
Corporate bonds	1,014		—		1,013		—
Total assets	$	24,946	$	970	$	23,954	$	—

The Company reviews its investment portfolio for other-than-temporary impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may be impaired, considering such factors as the duration, severity and reason for the decline in value as well as the potential recovery period. During the three and six months ended June 30, 2016 and 2015, the Company did not recognize any other-than-temporary impairment losses.

The carrying amount of the term loan approximates fair value, using Level 2 inputs, as this borrowing bears interest at a variable (market) rate at June 30, 2016 and December 31, 2015.

Non-Recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events, including those described in Note 6, “Goodwill and Amortizable Intangible Assets,” that are adjusted to fair value in certain circumstances when the carrying values are more than the fair values. The categorization of the framework used to price the assets in the event of an impairment is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value.

Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition using Level 2 and Level 3 inputs.

The carrying amounts of accounts receivable and accounts payable reported in the condensed consolidated balance sheets approximate fair value.

XML

Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2016

Other Assets [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Prepaid and deferred commissions	$	7,373	$	8,573
Other prepaid expenses and current assets	10,925		10,453
Total prepaid expenses and other current assets	$	18,298	$	19,026

XML

Property, Equipment and Software

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Property, Equipment and Software

Property, Equipment and Software

Property, equipment and software was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
Furniture and equipment	$	16,024		$	14,179
Land	3,448			3,392
Buildings and improvements	19,943			19,035
Software	5,951			5,814
Capitalized website and software development costs	56,189			47,877
Total property, equipment and software	101,555			90,297
Less accumulated depreciation	(17,329		)	(12,662		)
Total property, equipment and software, net	$	84,226		$	77,635

XML

Goodwill and Amortizable Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Amortizable Intangible Assets

Goodwill and Amortizable Intangible Assets

The Company has goodwill as well as certain amortizable intangible assets consisting of data acquisition costs, a member list, content, core technology and other intangible assets related to the purchase of a website domain name. Amortization of the intangible assets is computed using the straight-line method over the estimated lives of the assets, which are six years for the member list and three years for the content, core technology, data acquisition costs and other intangible assets.

Amortizable intangible assets as of June 30, 2016 and December 31, 2015 were as follows:

	Cost		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Amortization Period (in years)
June 30, 2016
Member list	$	1,670	$	812	$	858	3.1
Content	140		136		4		0.1
Core technology	110		107		3		0.1
Data acquisition costs	1,517		840		677		1.5
Other intangible assets	300		233		67		0.7
Total amortizable intangible assets	$	3,737	$	2,128	$	1,609

	Cost		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Amortization Period (in years)
December 31, 2015
Member list	$	1,670	$	673	$	997	3.6
Content	140		113		27		0.6
Core technology	110		88		22		0.6
Data acquisition costs	1,920		1,072		848		1.5
Other intangible assets	300		183		117		1.2
Total amortizable intangible assets	$	4,140	$	2,129	$	2,011

The Company’s recorded goodwill balance as of both June 30, 2016 and December 31, 2015 was $1,145.

XML

Accrued Liabilities

6 Months Ended

Jun. 30, 2016

Accrued Liabilities [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Accrued sales commissions	$	1,149	$	1,461
Sales and use tax	4,316		4,307
Accrued compensation	6,462		6,826
Uninvoiced accounts payable	10,365		2,384
Contingent legal liability	3,500		—
Other accrued liabilities	3,789		5,309
Total accrued liabilities	$	29,581	$	20,287

XML

Debt and Credit Arrangements

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt and Credit Arrangements

Debt and Credit Arrangements

Long-term debt, net, was comprised of the following as of June 30, 2016 and December 31, 2015: 

	June 30, 2016			December 31, 2015
Term loan	$	60,000		$	60,000
Unamortized deferred financing fees	(1,267		)	(1,462		)
Unamortized fees paid to lender	(783		)	(904		)
Total debt, net	57,950			57,634
Less current maturities	—			(1,500		)
Total long-term debt, net	$	57,950		$	56,134

On September 26, 2014, the Company entered into a financing agreement for a $60,000 term loan and a $25,000 delayed draw term loan. On June 10, 2016, the Company entered into a first amendment to the financing agreement which, among other things, (i) extended the commencement of the Company’s quarterly repayment obligations under the term loan from September 30, 2016 to September 30, 2017; (ii) revised the financial covenants for minimum consolidated EBITDA, as defined in the financing agreement, for periods ending after June 30, 2016, (iii) revised the financial covenant related to minimum required liquidity from $10,000 to $30,000; (iv) removed the financial covenant related to minimum membership revenue for periods ending after March 31, 2016; and (v) modified the basis for the calculation of the applicable interest rate.

In accordance with the first amendment to the financing agreement, unless and until the Company's consolidated EBITDA exceeds $30,000 for any four consecutive fiscal quarters ending after June 10, 2016, amounts outstanding under the financing agreement bear interest at a per annum rate, at the option of the Company, equal to (i) the LIBOR rate for the interest period in effect, subject to a floor of 0.5%, plus 7.25% or (ii) the reference rate, which is based on the prime rate as published by the Wall Street Journal, subject to a floor of 3.25%, plus 6.25%. Should the Company's consolidated EBITDA exceed $30,000 for any four consecutive fiscal quarters ending after June 10, 2016, amounts outstanding under the financing agreement will bear interest thereafter at a per annum rate, at the option of the Company, equal to, in accordance with the basis for the calculation of the applicable interest rate set forth in the original financing agreement, (i) the LIBOR rate for the interest period in effect, subject to a floor of 0.5%, plus 6.75% or (ii) the reference rate, subject to a floor of 3.25%, plus 5.75%. The financing agreement requires monthly interest payments on the first business day of each month until maturity on any principal amounts outstanding under either debt facility. The financing agreement further obligates the Company to make quarterly principal payments on the term loan of $750 on the last day of each calendar quarter, commencing with the quarter ending September 30, 2017, and to repay the remaining balance of the term loan at maturity. The Company is required to make principal payments on the outstanding balance of the delayed draw term loan equal to 1.25% of the amount of such loan funded at or prior to the last day of each calendar quarter, commencing with the quarter ending September 30, 2016, and to repay the remaining outstanding balance of the delayed draw term loan at maturity. From the effective date of the financing agreement through September 26, 2017, the Company is also required to pay a commitment fee equal to 0.75% per annum of the unborrowed amounts of the delayed draw term loan.

The Company may prepay the amounts outstanding under the financing agreement at any time and is required to prepay the loans with (i) the net proceeds of certain asset sales, issuances of debt or equity, and certain casualty events, and (ii) up to 50% of consolidated excess cash flow, as defined in the financing agreement, for each fiscal year during the term of the financing agreement, commencing with the year ended December 31, 2015. As specified by the first amendment to the financing agreement, the Company must pay a 1% premium on prepayments made on or before June 10, 2017, subject to certain exceptions as set forth in the financing agreement. The Company’s obligations under the financing agreement are guaranteed by each of its subsidiaries and are secured by first priority security interests in all of their respective assets and a pledge of the equity interests of the Company’s subsidiaries. The term loan and the delayed draw term loan mature on September 26, 2019. As of June 30, 2016, the Company had $57,950 in outstanding borrowings, net of unamortized deferred financing fees of $1,267 and unamortized fees paid to the lender of $783, under the term loan and availability of $25,000 under the delayed draw term loan.

The financing agreement contains various restrictive covenants, including restrictions on the Company's ability to dispose of assets, make acquisitions or investments, incur debt or liens, make distributions to stockholders or repurchase outstanding stock, enter into related-party transactions and make capital expenditures, other than upon satisfaction of the conditions set forth in the financing agreement. The Company is also required to comply with certain financial covenants, including minimum consolidated EBITDA as defined in the financing agreement, minimum liquidity and maximum consolidated capital expenditures. Upon an event of default, which includes certain customary events such as, among other things, a failure to make required payments when due, a failure to comply with covenants, certain bankruptcy and insolvency events, defaults under other material indebtedness, or a change in control, the lenders may accelerate amounts outstanding, terminate the agreement and foreclose on all collateral. The Company was in compliance with all financial and non-financial covenants at June 30, 2016.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is regularly involved in litigation, both as a plaintiff and as a defendant, relating to its business and operations. The Company assesses the likelihood of any judgments or outcomes with respect to these matters and determines loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, the Company considers other relevant factors that could impact its ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. The Company’s reserves may change in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of the matters listed below will not have a material adverse effect on its business, consolidated financial position, results of operations or cash flows. Regardless of the outcome, litigation can adversely impact the Company as a result of defense and settlement costs, diversion of management resources and other factors.

Moore, et al. v. Angie's List, Inc., 2:15cv-01243-SD. On March 11, 2015, a lawsuit seeking class action status was filed against the Company in the U.S. District Court for the Eastern District of Pennsylvania. The lawsuit alleges claims for breaches of contract and the covenant of good faith and fair dealing, fraud and fraudulent inducement, unjust enrichment and violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law premised on the allegations that the Company does not disclose that it accepts advertising payments from service providers or that the payments allegedly will impact the service provider letter-grade ratings, the content and availability of reviews about the provider and the provider's place in search-result rankings. The Company filed a motion to dismiss on May 13, 2015, which was granted in part on August 7, 2015. In particular, the plaintiff's claims for breach of the covenant of good faith and fair dealing and unjust enrichment were dismissed from the action. The parties proceeded to exchange extensive written and document discovery and conducted depositions. Discovery closed on April 14, 2016. During the discovery period, certain other cases with similar allegations also were filed by some of the same plaintiffs’ counsel in federal court in California (Zygelman v. Angie's List, Inc., 3:16-cv-00276-SI) and New Jersey (Glick v. Angie's List, Inc., 2:16-cv-00546-MCA-MAH), each discussed below. Following mediation sessions held on April 4, 2016 and April 12, 2016, the parties executed a Memorandum of Understanding (“MOU”) on April 19, 2016 to settle the claims on a class-wide basis. Among other relief, the settlement provides for a cash payment of up to $2,350 to create a fund for the payment of cash to settlement class members and for the payment of attorneys’ fees and costs to plaintiffs’ counsel as approved by the court. Settlement class members will have the option of sharing in the cash fund or selecting a free period of membership of up to four months depending on the date and length of their membership with Angie’s List. The settlement also provides certain prospective relief in the form of enhanced explanations in the Company's Membership Agreement and in responses to Frequently Asked Questions concerning, among other things, the advertising revenue earned from service providers. In accordance with U.S. GAAP, the Company recorded a $3,500 contingent liability related to this matter in the first quarter of 2016, and this amount includes the cost of the cash fund described above as well as the payment of reasonable notice and administration costs, attorneys’ fees and an assumption of revenue the Company will forego as a result of certain class members selecting the option for a free period of membership. As part of the settlement, plaintiffs' counsel filed, and the Company did not oppose, a motion to amend the complaint in the Moore matter to add both the Zygelman and Glick plaintiffs as named plaintiffs for settlement purposes only, as well as a motion for preliminary approval of a class-wide settlement. By order dated July 11, 2016, the court granted the motion to amend the complaint, and the conditional amended class action complaint was filed as of that date. On July 12, 2016, the court entered an order granting the unopposed motion for preliminary approval of the proposed class action settlement, which, among other things, ordered that notice of the settlement be provided to the settlement class and scheduled a fairness hearing for November 8, 2016. The proposed settlement remains subject to final court approval. 

Glick v. Angie's List, Inc., 2:16-cv-00546-MCA-MAH. On February 1, 2016, Gary Glick, an Angie's List member, filed a putative class action lawsuit in the United States District Court for the District of New Jersey. The plaintiff alleged that the Company deceives its consumers by representing that service providers “can't pay” or “don't pay” to be on Angie's List, while concealing that service providers pay advertising fees to influence their search result ranking, and further asserts other claims substantially similar to those alleged in the Moore litigation. The plaintiff's complaint includes claims for breach of contract and for a violation of the New Jersey Consumer Fraud Act. The Glick action was voluntarily dismissed without prejudice on July 13, 2016, in accordance with the aforementioned class action settlement.

Zygelman v. Angie's List, Inc., 3:16-cv-00276-SI. On January 15, 2016, Michelle Zygelman, an Angie's List member, filed a putative class action lawsuit in the United States District Court for the Northern District of California. The plaintiff alleged claims substantially similar to those in the Glick action but is seeking relief under California consumer protection statutes. The Zygelman action was voluntarily dismissed without prejudice on July 14, 2016, in accordance with the aforementioned class action settlement.

Williams, et al. v. Angie’s List, Inc., 1:16-cv-878.On April 20, 2016, a group of former employees filed a lawsuit in the United States District Court for the Southern District of Indiana. The lawsuit alleges that the Company failed to pay (i) wages earned in a timely manner as required under Indiana Wage Statutes and (ii) overtime wages in violation of the Fair Labor Standards Act (29 U.S.C. §§ 206-07) and is requesting payment of all damages, including unpaid wages, interest, attorneys’ fees and other charges. A first and second amended complaint was filed, adding additional named plaintiffs, and the Company’s answer to the second amended complaint was filed on July 26, 2016. The plaintiffs filed a motion for conditional certification on June 10, 2016, and the Company filed its response brief in opposition to motion for conditional certification on July 15, 2016. The Company is currently unable to determine the likely outcome or reasonably estimate the amount or range of potential liability, if any, related to this matter, and accordingly, has not established any reserve for this matter.

Crabtree, et al. v. Angie’s List, Inc., 1:16-cv-877. On April 20, 2016, three former employees filed a lawsuit in the United States District Court for the Southern District of Indiana. The lawsuit alleges that the Company failed to pay (i) wages earned in a timely manner as required under Indiana Wage Statutes and (ii) overtime wages in violation of the Fair Labor Standards Act (29 U.S.C. §§ 206-07) and is requesting payment of all damages, including unpaid wages, interest, attorneys’ fees and other charges. The plaintiffs filed a first amended complaint in May 2016, adding one additional Indiana wage statute claim. The Company filed its answer and defenses on June 9, 2016. The Company is currently unable to determine the likely outcome or reasonably estimate the amount or range of potential liability, if any, related to this matter, and accordingly, has not established any reserve for this matter.

XML

Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-Based Compensation

On June 29, 2016, the Company granted 3,034,329 performance awards of restricted stock units (“PRSUs”) under a long-term incentive plan (the “2016 LTIP”) to its executive officers and other members of the Company’s senior leadership team as of that date. The PRSUs granted are contingent upon the Company’s performance with respect to certain predetermined Total Cumulative Revenue targets over the 33-month period commencing April 1, 2016 and concluding December 31, 2018, subject to the Company's achievement of a predetermined cumulative Adjusted EBITDA threshold over the same time period. The 3,034,329 PRSUs granted represent the number of shares to be issued at the 100% target achievement level for this award. The number of shares ultimately issued could be 0% or range from 75% (threshold achievement level) to 200% (maximum achievement level) of the granted amount based on the Company's performance in relation to the performance conditions, and linear interpolation will be applied should Total Cumulative Revenue fall between the threshold and maximum achievement levels. Any PRSUs earned under the 2016 LTIP will vest in full on May 31, 2019, subject to continued employment as of that date. The Company will recognize stock-based compensation expense for these awards over the vesting period based on the probable achievement of the aforementioned performance conditions as of the end of each reporting period during the performance period and may periodically adjust the recognition of such expense, as necessary, in response to any changes in the Company’s forecasts with respect to the performance conditions. For the three and six months ended June 30, 2016, stock-based compensation expense related to the 2016 LTIP was not material.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP were condensed or omitted pursuant to such rules and regulations. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all information and footnotes necessary for fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The accompanying unaudited condensed consolidated balance sheet as of December 31, 2015 was derived from the audited consolidated financial statements as of that date but does not include all disclosures required by U.S. GAAP, including certain notes thereto.

The condensed consolidated financial statements reflect all adjustments of a normal recurring nature considered, in the opinion of management, necessary to fairly present the results for the periods presented. Operating results from interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

For additional information, including a discussion of the Company’s significant accounting policies, refer to the audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Operating Segments

Operating Segments

Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company manages its business on the basis of one operating segment.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Estimates

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes as well as the disclosure of contingent assets and liabilities and reported revenue and expenses. Actual results could differ from those estimates.

Reclassification of Prior Year Presentation

Reclassification of Prior Year Presentation

Certain prior year amounts were reclassified for consistency with the current period presentation, including the marketing compensation and personnel-related costs and general marketing operating expenditures that were moved from general and administrative expense and selling expense to marketing expense within the consolidated statements of operations. These reclassifications did not materially impact the consolidated financial statements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No. 2016-13: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The amendments in this update add to U.S. GAAP a current expected credit loss impairment model that is based on expected losses rather than incurred losses, requiring consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. ASU 2016-13 will be effective for the Company in fiscal year 2020, but early adoption is permitted beginning in 2019. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09: Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendments in this update simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 will be effective for the Company in fiscal year 2017, but early adoption is permitted. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases (Topic 842) (“ASU 2016-02”). The amendments in this update require lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. ASU 2016-02 will be effective for the Company in fiscal year 2019, but early adoption is permitted. The Company is currently evaluating the impact of this update on the consolidated financial statements.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01: Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. In particular, the amendments in this update supersede, for public business entities, the requirement to disclose the methods and significant assumptions used in calculating the fair value of financial instruments required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 will be effective for the Company in fiscal year 2018, but early adoption is permitted. The Company does not believe that the adoption of the guidance set forth in this update will have a material impact on the consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09: Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). This update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” This update also requires significantly expanded disclosures related to revenue recognition. ASU 2014-09 will be effective for the Company in fiscal year 2018 following the issuance of Accounting Standards Update No. 2015-14: Deferral of the Effective Date in August 2015, which deferred the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued Accounting Standards Update No. 2016-08: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), amending the principal-versus-agent implementation guidance set forth in ASU 2014-09. Among other things, ASU 2016-08 clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. In April 2016, the FASB issued Accounting Standards Update No. 2016-10: Identifying Performance Obligations and Licensing (“ASU 2016-10”), which amends certain aspects of the guidance set forth in the FASB's new revenue standard related to identifying performance obligations and licensing implementation. In May 2016, the FASB issued Accounting Standards Update No. 2016-12: Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), amending certain aspects of ASU 2014-09 to address implementation issues identified by the FASB's transition resource group and clarify the new revenue standard's core revenue recognition principles. The Company is currently evaluating the future impact and method of adoption of these updates with respect to the consolidated financial statements.

Significant Accounting Policies

As of January 1, 2016, the Company adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Update No. 2015-03: Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, resulting in the Company reclassifying the deferred financing fees previously recorded in other noncurrent assets, including $1,462 as of December 31, 2015, to net long-term debt in the consolidated balance sheets. There were no other material changes to the Company's significant accounting policies from those described in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Income Taxes- Valuation Allowance

Income Taxes - Valuation Allowance

The Company evaluates whether it will realize the benefits of its net deferred tax assets and establishes a valuation allowance to reduce the carrying value of its deferred tax assets to the amount considered more likely than not to be recognized. Deferred tax assets arise as a result of tax loss carryforwards and various differences between the book basis and the tax basis of such assets. The Company periodically reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences. Should there be a change in the ability to recover deferred tax assets, the tax provision would be adjusted in the period in which the assessment is changed. There was no change to the Company's assessment during the three or six month periods ended June 30, 2016.

While the Company reported net income for the three and six months ended June 30, 2016, any taxable income for these periods will ultimately be reduced by net operating loss carryforwards. The Company maintains a full valuation allowance against its deferred tax assets, and as a result, there is no federal income tax expense recorded in the condensed consolidated statement of operations for the three and six months ended June 30, 2016.

Contractual Obligations

Contractual Obligations

The Company's contractual obligations primarily consist of long-term noncancellable operating leases expiring through 2021 and long-term debt comprised of a $60,000 term loan scheduled to mature on September 26, 2019. There have been no significant changes in the Company's contractual obligations from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Total combined future minimum payment obligations under long-term noncancellable operating leases amounted to approximately $8,152 as of June 30, 2016, and the Company had $57,950 in outstanding borrowings, net of unamortized deferred financing fees and unamortized fees paid to the lender, under the term loan as of the same date.

XML

Net Loss Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three Months Ended   June 30,		Six Months Ended   June 30,
	2016	2015	2016	2015
Weighted-average number of common shares outstanding — basic	58,710,321	58,516,677	58,662,100	58,516,677
Total dilutive effect of outstanding equity awards	933,629	—	975,752	—
Weighted-average number of common shares outstanding — diluted	59,643,950	58,516,677	59,637,852	58,516,677

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following potentially dilutive equity awards were not included in the diluted net income (loss) per common share calculation as they would have an antidilutive effect for the periods presented:

	Three Months Ended   June 30,		Six Months Ended   June 30,
	2016	2015	2016	2015
Stock options	7,376,383	7,535,129	7,358,351	7,535,129
Restricted stock units	2,315,818	879,393	2,274,574	879,393
Performance awards of restricted stock units	3,614,784	—	3,631,937	—

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis

The following tables summarize the Company's financial instruments at fair value based on the fair value hierarchy for each class of instrument as of June 30, 2016 and December 31, 2015:

			Fair Value Measurement at June 30, 2016 Using
	Carrying Value at June 30, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	1,099	$	1,099	$	—	$	—
Investments:
Certificates of deposit	17,110		—		17,115		—
U.S. Treasury securities	6,803		—		6,810		—
Total assets	$	25,012	$	1,099	$	23,925	$	—

			Fair Value Measurement at December 31, 2015 Using
	Carrying Value at December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	970	$	970	$	—	$	—
Investments:
Certificates of deposit	19,310		—		19,292		—
U.S. Treasury securities	3,652		—		3,649		—
Corporate bonds	1,014		—		1,013		—
Total assets	$	24,946	$	970	$	23,954	$	—

XML

Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2016

Other Assets [Abstract]

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure

Prepaid expenses and other current assets was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Prepaid and deferred commissions	$	7,373	$	8,573
Other prepaid expenses and current assets	10,925		10,453
Total prepaid expenses and other current assets	$	18,298	$	19,026

XML

Property, Equipment and Software (Tables)

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Property, Equipment and Software

Property, equipment and software was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
Furniture and equipment	$	16,024		$	14,179
Land	3,448			3,392
Buildings and improvements	19,943			19,035
Software	5,951			5,814
Capitalized website and software development costs	56,189			47,877
Total property, equipment and software	101,555			90,297
Less accumulated depreciation	(17,329		)	(12,662		)
Total property, equipment and software, net	$	84,226		$	77,635

XML

Goodwill and Amortizable Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

Amortizable intangible assets as of June 30, 2016 and December 31, 2015 were as follows:

	Cost		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Amortization Period (in years)
June 30, 2016
Member list	$	1,670	$	812	$	858	3.1
Content	140		136		4		0.1
Core technology	110		107		3		0.1
Data acquisition costs	1,517		840		677		1.5
Other intangible assets	300		233		67		0.7
Total amortizable intangible assets	$	3,737	$	2,128	$	1,609

	Cost		Accumulated Amortization		Net Carrying Amount		Weighted-Average Remaining Amortization Period (in years)
December 31, 2015
Member list	$	1,670	$	673	$	997	3.6
Content	140		113		27		0.6
Core technology	110		88		22		0.6
Data acquisition costs	1,920		1,072		848		1.5
Other intangible assets	300		183		117		1.2
Total amortizable intangible assets	$	4,140	$	2,129	$	2,011

XML

Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Accrued Liabilities [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities was comprised of the following as of June 30, 2016 and December 31, 2015:

	June 30, 2016		December 31, 2015
Accrued sales commissions	$	1,149	$	1,461
Sales and use tax	4,316		4,307
Accrued compensation	6,462		6,826
Uninvoiced accounts payable	10,365		2,384
Contingent legal liability	3,500		—
Other accrued liabilities	3,789		5,309
Total accrued liabilities	$	29,581	$	20,287

XML

Debt and Credit Arrangements Debt and Credit Arrangements (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt, net, was comprised of the following as of June 30, 2016 and December 31, 2015: 

	June 30, 2016			December 31, 2015
Term loan	$	60,000		$	60,000
Unamortized deferred financing fees	(1,267		)	(1,462		)
Unamortized fees paid to lender	(783		)	(904		)
Total debt, net	57,950			57,634
Less current maturities	—			(1,500		)
Total long-term debt, net	$	57,950		$	56,134

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details)		6 Months Ended
	Jun. 29, 2016 shares	Jun. 30, 2016 USD ($) segment	Dec. 31, 2015 USD ($)
Summary of Significant Accounting Policies [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Percentage Available Based on Achievement Level, Threshold	75.00%
Debt Issuance Costs, Noncurrent, Net		$ 1,267,000	$ 1,462,000
Number of operating segments | segment		1
Total combined future minimum payment obligations		$ 8,152,000
Long-term debt, net		57,950,000	56,134,000
Long-term Debt		57,950,000	57,634,000
Term Loan [Member]
Summary of Significant Accounting Policies [Line Items]
Face amount of term loan		$ 60,000,000
Accounting Standards Update 2015-03 [Member]
Summary of Significant Accounting Policies [Line Items]
Debt Issuance Costs, Noncurrent, Net			$ 1,462,000
Performance Restricted Stock Units [Member]
Summary of Significant Accounting Policies [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | shares	3,034,329
Share Based Compensation Arrangement By Share Based Payment Award Performance Measurement Period	33 months
Minimum [Member]
Summary of Significant Accounting Policies [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Percentage Available Based on Achievement Level	0.00%
Maximum [Member]
Summary of Significant Accounting Policies [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Percentage Available Based on Achievement Level	200.00%

XML

Net Loss Per Common Share - Antidilutive securities (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted Average Number of Shares Outstanding, Basic	58,710,321	58,516,677	58,662,100	58,516,677
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	933,629	0	975,752	0
Earnings Per Share, Diluted	$ 0.08	$ (0.14)	$ 0.01	$ (0.07)
Weighted Average Number of Shares Outstanding, Diluted	59,643,950	58,516,677	59,637,852	58,516,677
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	7,376,383	7,535,129	7,358,351	7,535,129
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	2,315,818	879,393	2,274,574	879,393
Performance Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	3,614,784	0	3,631,937	0

XML

Fair Value Measurements - Summary of the financial instruments of the company at fair value (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other than Temporary Impairment Losses, Investments, Held-to-maturity Securities	$ 0	$ 0
Carrying value	25,012		$ 24,946
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	1,099		970
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	1,099		970
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	1,099		970
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	23,925		23,954
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	0		0
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	0		0
US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	6,803		3,652
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	0		0
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	6,810		3,649
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	0		0
Corporate Bond Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value			1,014
Corporate Bond Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value			0
Corporate Bond Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value			1,013
Corporate Bond Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value			0
Certificates of Deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	17,110		19,310
Certificates of Deposit [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	0		0
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	17,115		19,292
Certificates of Deposit [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair market value	$ 0		$ 0

XML

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Other Assets [Abstract]
Prepaid and deferred commissions	$ 7,373	$ 8,573
Other	10,925	10,453
Total prepaid expenses and other current assets	$ 18,298	$ 19,026

XML

Property, Equipment and Software (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, equipment and software, Gross	$ 101,555	$ 90,297
Less accumulated depreciation	(17,329)	(12,662)
Property, equipment and software, Net	84,226	77,635
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, equipment and software, Gross	16,024	14,179
Land [Member]
Property, Plant and Equipment [Line Items]
Property, equipment and software, Gross	3,448	3,392
Building and improvements [Member]
Property, Plant and Equipment [Line Items]
Property, equipment and software, Gross	19,943	19,035
Software [Member]
Property, Plant and Equipment [Line Items]
Property, equipment and software, Gross	5,951	5,814
Capitalized website and software development costs [Member]
Property, Plant and Equipment [Line Items]
Property, equipment and software, Gross	$ 56,189	$ 47,877

XML

Goodwill and Amortizable Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Cost	$ 3,737	$ 4,140
Accumulated Amortization	2,128	2,129
Amortizable intangible assets, net	1,609	2,011
Member List [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	1,670	1,670
Accumulated Amortization	812	673
Amortizable intangible assets, net	$ 858	$ 997
Finite-Lived Intangible Assets, Remaining Amortization Period	3 years 31 days	3 years 219 days
Content [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	$ 140	$ 140
Accumulated Amortization	136	113
Amortizable intangible assets, net	$ 4	$ 27
Finite-Lived Intangible Assets, Remaining Amortization Period	31 days	219 days
Core Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	$ 110	$ 110
Accumulated Amortization	107	88
Amortizable intangible assets, net	$ 3	$ 22
Finite-Lived Intangible Assets, Remaining Amortization Period	31 days	219 days
Data Acquisition Costs [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	$ 1,517	$ 1,920
Accumulated Amortization	840	1,072
Amortizable intangible assets, net	$ 677	$ 848
Finite-Lived Intangible Assets, Remaining Amortization Period	1 year 183 days	1 year 183 days
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	$ 300	$ 300
Accumulated Amortization	233	183
Amortizable intangible assets, net	$ 67	$ 117
Finite-Lived Intangible Assets, Remaining Amortization Period	243 days	1 year 73 days

XML

Goodwill and Amortizable Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill	$ 1,145	$ 1,145
Finite-Lived Intangible Assets [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years	3 years
Member List [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Asset, Useful Life	6 years	6 years

XML

Accrued Liabilities - Accrued liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accrued Liabilities [Abstract]
Accrued sales commissions	$ 1,149	$ 1,461
Sales and use tax	4,316	4,307
Accrued compensation	6,462	6,826
Uninvoiced accounts payable	10,365	2,384
Estimated Litigation Liability	3,500	0
Other accrued liabilities	3,789	5,309
Total accrued liabilities	$ 29,581	$ 20,287

XML

Debt and Credit Arrangements (Details) - USD ($)			6 Months Ended
	Jun. 10, 2016	Sep. 26, 2014	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Term loan			$ 60,000,000	$ 60,000,000
Unamortized deferred financing fees			(1,267,000)	(1,462,000)
Unamortized fees paid to lender			(783,000)	(904,000)
Total debt, net			57,950,000	57,634,000
Less current maturities			0	(1,500,000)
Long-term debt, net			57,950,000	$ 56,134,000
Term Loan [Member]
Debt Instrument [Line Items]
Face amount of term loan			$ 60,000,000
Term Loan and Delayed Draw Term Loan Financing Agreement [Member]
Debt Instrument [Line Items]
Minimum required liquidity	$ 30,000,000	$ 10,000,000
Percent of excess cash flow to be used for loan prepayment, maximum			50.00%
Term Loan and Delayed Draw Term Loan Financing Agreement [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Unamortized deferred financing fees			$ (1,267,000)
Unamortized fees paid to lender			(783,000)
Total debt, net			57,950,000
Face amount of term loan		60,000,000
Periodic principal payments on term loan		$ 750,000
Debt Instrument Prepayment Premium	1.00%
Term Loan and Delayed Draw Term Loan Financing Agreement [Member] | Term Loan [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Interest rate, floor	0.50%	0.50%
Basis spread	7.25%	6.75%
Term Loan and Delayed Draw Term Loan Financing Agreement [Member] | Term Loan [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Interest rate, floor	3.25%	3.25%
Basis spread	6.25%	5.75%
Term Loan and Delayed Draw Term Loan Financing Agreement [Member] | Delayed Draw Term Loan [Member]
Debt Instrument [Line Items]
Face amount of term loan		$ 25,000,000
Periodic payment as a percent of amount funded		1.25%
Commitment fee as a percent of unborrowed amounts		0.75%
Debt Instrument, Unused Borrowing Capacity, Amount			$ 25,000,000

XML

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Apr. 19, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015
Loss Contingencies [Line Items]
Estimated Litigation Liability		$ 3,500		$ 0
Moore v. Angie's List [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount	$ 2,350
Litigation Settlement, Optional Free Membership Period	4 months
Estimated Litigation Liability			$ 3,500