Good day, ladies and gentlemen, and welcome to the Angie's List's Fourth Quarter 2015 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions would be given at that time. As a reminder, this call is being recorded. I would now like to turn the call over to Leslie Arena, Vice President of Investor Relations. You may begin.

Thank you. Good morning and welcome to the Angie's List fourth quarter and full year 2015 earnings conference call. With me today are Scott Durchslag, Angie's List President and CEO and Tom Fox, our CFO. At the conclusion of our prepared remarks, we will be happy to take your questions. As a reminder, today's discussion will include statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. More information about those risks and uncertainties is contained in our SEC filings. We caution you against placing undue reliance on these forward-looking statements and disclaim any intent or obligation to update them. In addition, as we refer to earnings, we will also refer to adjusted EBITDA, which we define as earnings before interest, income taxes, depreciation and amortization, non-cash stock-based compensation, loss on debt extinguishment, the litigation settlement adjustment, and non-cash long-lived asset impairment charges. Adjusted EBITDA is a non-GAAP financial measure, and you can find a reconciliation to GAAP in our fourth quarter 2015 earnings release, which is posted on the IR section of our website. We believe that the use of adjusted EBITDA provides additional insight for investors to use an evaluation of ongoing operating results and trends. However, it should not be considered in isolation from, or as a substitute for financial information prepared in accordance with GAAP. I would now like to turn the call over to Scott. Scott Durchslag - President, Chief Executive Officer & Director: Thanks, Leslie, and thank you all for joining us on the call today. 2015 had its challenges, but viewed in perspective, it really was a year of progress. We just marked a major milestone for Angie's List,…

Thanks, Scott, and good morning. As Scott mentioned, we reported the first profitable year in Angie's List history with net income of $10 million. Net income for the quarter was $14 million, down $1 million from a year ago. Adjusted EBITDA for 2015 increased to $28 million from $4 million a year ago. For the quarter, adjusted EBITDA was $20 million, down $1 million from the same period a year ago. Total service provider revenue, which includes advertising and e-commerce revenue, increased 14% for the year and 9% in the fourth quarter compared to the year-ago quarter. Service provider contract value backlog as of year-end was $162 million, up 6% from the year-ago quarter. Membership revenue for the year and quarter decreased 7% and 8%, respectively, reflecting the shift in mix as newer members joined on lower-priced tiers. We have been evaluating opportunities to deliver more value to members and new ways to monetize our monthly unique visitors. Scott will discuss this in more detail at our Investor Day. We continued to grow our e-commerce business and increased GMV and units for the year and quarter-over-quarter. We are making good progress, increasing the take rates. But it will take time to see meaningful improvement, as take rate changes are generally linked to the timing of SP contract renewal. Turning to our expenses, marketing expense declined $16 million for the full year and increased $1 million in the fourth quarter compared to the prior year. Lower full year spend drove significant leverage, as marketing expense, as a percent of revenue, declined 6 percentage points for the year and increased nearly 1 percentage point for the quarter. For the full year, we added 1 million gross new members, down from 1.2 million in 2014. Fourth quarter gross member additions increased to 214,000…

Our first question comes from Lloyd Walmsley of Deutsche Bank. Your line is open.

Thanks, guys. I guess, two, if I can. First, just any letup in the competitive environment you're seeing just in light of kind of changes in startup funding risk appetites and how some startups may be operating in kind of a new world we are in? And then, secondly, when you look at the digital advertising you guys are doing, can you give us some more color just on how customers driven off of digital ads are behaving relative to traditional customers? Are they coming back, using the service again, even if they don't subscribe? Or just some color on what you are seeing there since it's a pretty big shift relative to what you guys have done historically, that would be great. Thanks. Scott Durchslag - President, Chief Executive Officer & Director: Thanks, Lloyd. Well, look, we monitor our competitors closely. And as I've said, I really believe no one is as well-positioned as Angie's List, but it's a big high-growth space and, as you point out, there's a fair bit of startup activity that is generating innovative new ideas that they're trying out. But they have the challenge of scale and solving the chicken and egg problem and being known. And that's no small set of challenges. So I still believe I would not want to change positions with any other competitor. But market research and, in fact, our own exit surveys indicate that we lose customers primarily as a result of our own doing, not because competitors are taking them. I'll provide more details on Investor Day that really show how we far surpass our nearest competitor on most of the key metrics: traffic, NPS, qualified service providers. Our close rate, as I mentioned on the earnings call last quarter, is over 2,000 basis points above HomeAdvisor,…

All right. Thanks. Look forward to hearing from you guys later next week.

All right. Thanks, Lloyd. Next call, operator? Next question?

Our next question comes from Paul Bieber of Bank of America Merrill Lynch. Your line is open.

Good morning. Thanks for taking my questions. I think last quarter you identified $10 million of potential cost savings. And I was wondering if you think that that will be realized in 2016 or reinvested in products. And then, secondly, what are some of the product priorities in 2016 to drive better membership engagement?

Sure, Paul. I'll take the first one and I'll let Scott answer the second part. So the $10 million that we talked about last quarter is indeed a target for 2016 performance and we'll talk in more detail about the outlook for 2016 next week. And we talked about the fact last quarter that really there is an opportunity, as Scott indicated even in his prepared remarks today, that there is reinvestment opportunity in the business and in particular in the product and technology area. Scott just finished talking about where the UX is relative to kind of where the market is today and where competition is. So we'll talk to you about also what we're doing with kind of reinvestment opportunities, but we do see and continue to see opportunities for efficiency in the business. Scott? Scott Durchslag - President, Chief Executive Officer & Director: In terms of your question on product priorities, we'll be spending a lot of quality time on that on Investor Day. But to give you a quick answer on that, getting the platform rolled out, making those improvements on the user experience because I really want to catch up in 2016 on the user experience and be in a position to actually leapfrog ahead; that would be the first one. The second one for me would be around LeadFeed and continuing to test, iterate, learn and optimize LeadFeed. And then the third one would be strengthening the value proposition at each tier of our offering, both to consumers and also in terms of how we demonstrate value to our service providers.

Okay. Thank you.

Next question, operator?

Our next question comes from Peter Stabler of Wells Fargo Securities. Your line is open.

Good morning. Thanks for the questions, a couple if I could. So you grew SP revenue 8% in the quarter per provider against a flat SP count. Wondering if you could give us a little color on how we should think about the trajectory of that relationship moving forward? In other words, the balance between SP participation and revenue provider, do you have the SP network you need at this point? Or is it just, as you said in your prepared remarks or alluded to in your prepared remarks, about wallet share? And then secondly, Tom, I'm wondering if you could go into a little bit more detail about the engagement metrics? You mentioned that the traditional member login and search activity was a bit lower. Wondering if you have any thoughts on what's driving that? Thank you.

Sure. So on the – first off, the SP revenue growth, I think that we see opportunities both to grow the population of SPs that we actually believe that with some of the things that Scott is going to talk more about, we're going to talk more about next week in terms of – both in terms of the substance and the form of how we describe ROI to our customers and actually how we deliver the ROI to our customers that we believe that we can grow the population and also grow the share of wallet that we can do both simultaneously. And I would tell you that we believe that we see opportunities in both of those areas. I would say it's more of a balanced approach as opposed to over-indexing on either one or the other. On the engagement metrics, I mean, this is something we've been talking about for many quarters now that, as we put more and more functionality and more of the experience outside the paywall, it's entirely understandable why some of the more traditional engagement metrics might not be where they used to be. You can do more without logging in, even if you are a member outside the paywall. So it's not something that alarms us, it's definitely something we're keeping an eye on, but it's something that's kind of constant with the strategy of the business going forward.

Thank you. Scott Durchslag - President, Chief Executive Officer & Director: And I would just add that from my point of view, the existing base of service providers is a very high quality base of service providers. We see opportunities to grow the number of high-quality service providers, but we want to be very thoughtful about doing that in a way that doesn't lower the bar on what that quality threshold is because that's really important to consumers. But that said, where we are most penetrated and deepest is with the really well established, high reputation service providers. I do think there is a big opportunity for another segment of service providers that we have not penetrated very deeply. That's kind of the next tier of up-and-coming service providers that do really high-quality work, but they may not have the reputation and are incredibly well-known to everybody in their communities, and those folks tend to be more tech savvy, they're ambitious about growth, they're looking to use a platform like ours as a vehicle for growth and I think that's a big relatively untapped opportunity that you'll hear us talk more about next week.

Thanks, Scott. Thanks, Tom.

Next question, operator?

Our next question comes from Kerry Rice of Needham. Your line is open. Kerry Rice - Needham & Co. LLC: Thanks. A couple of questions. The first one is, total contract value for service providers was flat sequentially, which it – this is kind of the first time it's flattened out as much. I was wondering whether that was related to some seasonality or it's just a fact of the monetization is slowing down maybe around e-commerce or maybe it hasn't picked up, if you can add some more color around that? And then on the platform or re-platforming our 4.0, this may be implicitly implied, but maybe could you talk about – you didn't mention mobile as part of the kind of core things that you were focused on, again, maybe that's just part of the platform, but maybe you can elaborate on that? Thanks.

Yeah. So, I mean, on the contract value, that does not include e-commerce. So e-commerce is not a CV item, it's kind of recognized as it happens item. So, it does not reflect any of the dynamics that relates to e-commerce. I mean, the change in contract value is really based on a couple of things, it's based on originations and it's based on renewals and of course, the amount of CV that's recognized in the period of course. So, we'll talk more next week about kind of what our plans are around kind of accelerating growth and getting that kind of back on track, but obviously, we're not happy with the rate of growth there, we like to see that growing even faster on a quarter-over-quarter basis and we're going to talk to you next week about our plans to do just that. Scott Durchslag - President, Chief Executive Officer & Director: Yeah. I mean, there is a bit of seasonality in it to be clear, Kerry because year-on-year it was up. But that said, I think it's also somewhat of a reflection of those mixed engagement metrics that I mentioned. And when you don't have as great of user experience as we should have that had some impact, right, in terms of profile views and the volume of calls that our advertisers get. And so that impacts their perception of value. And we don't do ourselves any favors in how we communicate the value they are getting from that. So those are opportunities that we can do a lot better on. With respect to your question on mobile, yeah, mobile is an absolutely integral part of the new platform, and about 45% or so of our business is coming in through mobile, it's incredibly critical as we think about the whole experience that we're going to be rolling out going forward. And we did roll out our new service provider mobile app, and I'm happy with what's started on there. But, again, the capabilities of what we'll be able to enable from a features point of view, we'll expand significantly as the new platform gets out there. Kerry Rice - Needham & Co. LLC: Okay. Thank you.

Next question, please?

Our next question comes from Rohit Kulkarni of RBC. Your line is open.

Thank you. Two questions, please. As in, on the traffic growth comments Scott, actually we just checked on comScore. Yeah, you did grow faster than Yelp on both mobile and desktop combined. Can you kind of draw that out a little bit as to what is leading to that traffic growth particularly in the last 90 days and how sustainable is that? Are there low hanging fruit that you think optimizing webpage, is optimizing mobile apps can lead to that traffic growth or do you need to spend more on Google or other places to acquire traffic? And second question is about sales reps, as in they have kind of declined quite steadily in a very disciplined manner over the last, maybe four quarters to five quarters sequentially, give or take, both originators as well as the hunters and gatherers, if you will. How sustainable is that and what are the learnings from your sales force reorg post mortem, if you will, in terms of the last six months? How that has evolved and what we should expect over the next 12 months? Scott Durchslag - President, Chief Executive Officer & Director: Thanks, Rohit. No, great questions. No, I'm really excited about that traffic growth, because it's organic. And that is a huge advantage that Angie's List has over most of our other competitors, they're paying for traffic from Google. And if you just look at the comScore data, yeah, our site traffic according to comScore grew 21% year-on-year in Q4. That's a lot higher growth rate than Yelp and Thumbtack. And – while HomeAdvisor had larger growth, theirs is largely paid for and it would be interesting to look at their marketing efficiency for Q4. But we still have one and a half times the traffic of HomeAdvisor in Q4. And Thumbtack was the only company that had negative year-on-year Q4 unique visits. So, I do see it as sustainable. I see it as a reflection, not just of the strength of the brand and the trust, but the Guarantees have had an impact, a significant impact I believe in driving folks to take a look at us. And so, even though you are doing TV ads that sometimes significantly drives online traffic and we're seeing that particularly to be true of the Guarantees campaign that we have live right now. So I think it's only the beginning of what we can do on traffic growth as we start to roll out more value at each of the different tiers of our offering and we start to then roll out the different ways that we're going to be monetizing non-member traffic. I think you're going to see that not just staying, but accelerate.

Okay. Scott Durchslag - President, Chief Executive Officer & Director: On your question about the sales organization, Rohit, I don't want to miss that because it's an important question. Yeah, look, effective of October 1, as I mentioned on the last earnings call, we launched the first phase of our project to sort of redesign the origination sales force and to change the sales processes to really improve effectiveness and productivity. I'm really pleased with how that has gone. And we have learned – we've learned a lot and we're continuing to sort of iterate those learnings as we then start to take that over to the account management side. The changes that we rolled out last quarter contributed to an increase in net service provider additions in the quarter and higher contract value per sales rep. And I did that because we're doing a better job of targeting, and we're doing a better job through kind of a more specialized approach in being able to convert it. We also changed the emphasis to relationships as opposed to just transactions. And those comments I made on NPS are really important, right. I really, really care about improving churn, and we're finding the new organization is helping significantly in regard to that. So, what we did was phased with originations first. We're doing account management now. We're going to do e-commerce next. We'll have all of these things completed as I said by our second quarter earnings call, but I would say the key lesson is really get to having a continuous improvement process that's done with the degree of rigor and discipline that hasn't been seen here before. It's really got three parts to it. One, the people, we really continue to strengthen the caliber of the sales team. Second,…

Okay. Great. Thanks, Scott. Look forward to more updates next week. Thank you.

Next question, operator?

Our next question comes from Jason Helfstein of Oppenheimer. Your line is open. Jason Helfstein - Oppenheimer & Co., Inc. (Broker): Thanks. Two questions. One, can you give us any comments on the experimentation with take rates? I know that's an area where you see opportunity, but anything you can share now. And then just secondly, with respect to the quarter, I think you came in more at the lower end of the implied guidance based on the full year guidance. Just maybe talk about how that – if that was the plan? And if it wasn't exactly the plan, like, what was the delta between that and perhaps like the high-end of the guidance? Thanks.

Yeah. So what was the first one? Take rate. So the take rate, I think what I would tell you is that we've been pleased. We thought this is going to be a challenge and I think we've through no small effort on the part of the sales leadership team and the sales folks individually have been making slow but steady progress and actually negotiating higher take rates. So that's going to take some time. It's not a big bang overnight kind of a change. So we're continuing to work on it. But I think we've been pleased with the kind of receptivity on the part of many of our sales – service provider partners. So that's been going well. I think on the guidance range, I think it really comes down to some of the things that Scott was saying earlier relative to kind of the SP business and some of the metrics there, engagement, the kind of the experience that we're delivering on the consumer side, and how that kind of flows through and manifests in our ability to kind of monetize. So I think those sort of challenges are things that we're aware of. Honestly, we've kind of hoped would have gone a little bit better for us in Q4 and something we'll be talking more about again next week. Jason Helfstein - Oppenheimer & Co., Inc. (Broker): And then just one follow-up just on the – you made comments about accelerating growth plan, you made comments about lowering OpEx. I guess, talk about your comfort with the current cash position, given what you want to accomplish in 2016 and beyond?

Yeah. I'm comfortable with the current cash position. I don't see any issues with that. So we're in good shape on the cash balance right now. Jason Helfstein - Oppenheimer & Co., Inc. (Broker): Thank you.

Next question, please, operator?

Our next question comes from Kevin Kopelman of Cowen & Co. Your line is open.

Hi. Thanks. Can you give us more color on the usage dynamics? Why do you think visits were up 21%, but the logins and searches were down? And can you share with us what the visits growth was from members-only according to your internal data? And I have a follow-up. Thanks. Scott Durchslag - President, Chief Executive Officer & Director: Okay. Thanks, Kevin. So we don't disclose the individual sort of segments of different types of visits. But as I already indicated, I think the traffic is up because of the Guarantees and the way we've been not just focusing on that in the television advertising, but there's a whole set of digital initiatives around that as well that are working quite nicely for us. And I expect to see that accelerate more as the new campaign that comes up from Arnold starts to build on that and broaden it in an integrated way kind of going forward.

Okay. So do you think visits are up also for members? It's not just non-members? Scott Durchslag - President, Chief Executive Officer & Director: Yeah. Like I said, we don't break it out. But generally speaking, we've seen a breadth kind of across the board. With such a huge percentage of our traffic coming from non-members, obviously, a lot of it has come from interest in what we announced there, that was kind of new, but the benefits that come from Guarantees are available to members, right? Remember, the Fair Price Guarantee is available to basic members, the Service Quality Guarantee is available to premium members. And we've seen some acceleration kind of in our member numbers at those tiers, respectively, that I think also flows out from that marketing.

Okay, thanks. And then just a separate question on LeadFeed. Can you talk more about just where you are in the rollout? How much has that rolled out, like what percentage of traffic or something like that? And you mentioned 3,000 SPs have registered. Can you give us any color on how many of those are incremental to your existing SP base, and are they included in that count? Thanks. Scott Durchslag - President, Chief Executive Officer & Director: So LeadFeed is available pretty much across the country. It's in the markets where we have a critical mass, right, of enough service providers to be able to support us, so like in parts of the country where it's really thin population densities, we don't surface it in those areas. But like, broadly speaking, across all the major MSAs, it's available. Remember, it's still in beta, right? And we'll be sharing some more results from it at Investor Day. But candidly, it's early, right? This is a brand new product. We're out there testing and iterating and learning. I'm satisfied with how it started out. But it's going to just keep getting better. It includes...

And... Scott Durchslag - President, Chief Executive Officer & Director: So to your question on the 3,000 SPs, so I don't want to miss that part of your question. The 3,000 SPs includes both existing and new members. We haven't broken out the detail.

But they're not – just to be clear, those 3,000 SPs are not included in the participation SP, that's why we didn't call them adding. We said registered, because they're not added to the count that we report. Scott Durchslag - President, Chief Executive Officer & Director: Right. And to be clear, our service providers, not members. Sorry, I misspoke.

Okay. Thank you.

Next question, operator?

Our next question comes from Blake Harper of Topeka Capital Markets. Your line is open.

Yeah, thanks. I have most of mine answered, but wanted to ask a follow-up there on the e-commerce business and you called out in the press release, in the prepared remarks, Scott, about the number of units going up, but the take rates going down. Just wanted to see if you could maybe elaborate on some of the factors that were driving both? Is there competition for the take rate? Was there something related to the marketing or at the end that we're able to drive the units higher and maybe where you think about like an optimal take rate range going forward? Thanks. Scott Durchslag - President, Chief Executive Officer & Director: Great. Thanks for your question. Yeah, I mean, just to have the numbers at everybody's fingertips, right. In e-commerce, if you look at full year versus 2014 – full year – well, let me focus on just Q4 because that's really what you're asking about. Year-on-year Q4 inventory was up 27%, unit volume was up 4.9% to 161,000 units, and GMV was up 10.7%. The issue with respect to the take rates, the benefit of having lower take rates last year was – it did bring on a whole bunch of inventory, right. And the flow-through from having that choice translates into kind of unit growth and GMV growth. The downside to having done it that way obviously is financial. The art is in being able to bring up the take rates in a manner that doesn't then drop the inventory. And that's where I'm really proud of what Mark and the sales leadership team have been able to do. They've been doing a great job of kind of communicating that and sort of packaging it in a manner that leaves me pretty confident about our ability…

Yeah. That's helpful. I mean, if you add anything else, you would start to talk about on the year-over-year basis if that was any different, but this is the quarter. Scott Durchslag - President, Chief Executive Officer & Director: I mean, the big trend in terms of the take rates being down and units being up still applies. The full-year numbers, just so you have them, inventory was up 19.4% full year versus 2014, GMV was up 27% full year, and units were up 15.4%.

Okay, great. Thanks a lot, Scott.

Okay. I see no more questions. So we'll conclude our call today. Thank you, everyone, for joining us and we look forward to seeing you on the 3rd. Scott Durchslag - President, Chief Executive Officer & Director: Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.