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Ancestry.com's Earnings Beat Last Year's by 35%

By Seth Jayson - Updated Apr 7, 2017 at 12:12PM

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Just the facts, Fool.

Ancestry.com (Nasdaq: ACOM) reported earnings on Oct. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Ancestry.com beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.

Gross margins shrank, operating margins grew, net margins expanded.

Revenue details
Ancestry.com recorded revenue of $128.4 million. The eight analysts polled by S&P Capital IQ expected a top line of $123.6 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $103.1 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.54. The nine earnings estimates compiled by S&P Capital IQ predicted $0.55 per share. GAAP EPS of $0.54 for Q3 were 35% higher than the prior-year quarter's $0.40 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 82.0%, 170 basis points worse than the prior-year quarter. Operating margin was 28.0%, 170 basis points better than the prior-year quarter. Net margin was 19.4%, 90 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $124.6 million. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $475.9 million. The average EPS estimate is $2.00.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 348 members out of 385 rating the stock outperform, and 37 members rating it underperform. Among 101 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 89 give Ancestry.com a green thumbs-up, and 12 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ancestry.com is outperform, with an average price target of $37.89.

Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Ancestry.com on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

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Stocks Mentioned

Ancestry.com LLC Stock Quote
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