- End-of-Period Paying Families
year-over-year growth of 10%; third quarter in a row of
acceleration
- Revenue increased 10% vs. the second
quarter of 2016 to $42.0 million
- Net income of $1.7 million as compared
to a net loss of $3.4 million for the second quarter of 2016
- Adjusted EBITDA of $2.6 million as
compared to $1.0 million for the second quarter of 2016
- Year-to-date cash provided by operating
activities from continuing operations of $11.1 million, up 84%
versus prior
Care.com (NYSE: CRCM), the world's largest online destination
for finding and managing family care, today is announcing financial
results for the second quarter ended July 1, 2017.
“Q2 was another strong quarter for us, highlighted by
better-than-expected performance on both the top and bottom lines.
During the quarter, we saw continued improvement in end-of-period
paying families growth and strong year-over-year growth in cash
generation of 84%," said Sheila Lirio Marcelo, Founder, Chairwoman
and CEO of Care.com. "Longer-term, we remain excited about the
growth trajectory of the business, as well as our progress towards
achieving our EBITA margin target of 20-25%, while continuing to
focus on innovation and the roll-out of Care 3.0, an entirely new
end-to-end mobile-first experience designed to improve our core
subscription offering."
Financial Results
- Revenue for the second quarter of 2017
was $42.0 million, a 10% increase from $38.2 million in the second
quarter of 2016.
- Revenue attributable to the US Consumer
offering totaled $33.4 million in the second quarter of 2017, an
increase of 9% from $30.7 million in the second quarter of
2016.
- Revenue attributable to the Care@Work
and B2B Offerings, as well as our services in our international
markets, totaled $8.6 million in the second quarter of 2017, an
increase of 15% from $7.5 million in the second quarter of
2016.
- Income from continuing operations in
the second quarter of 2017 was $1.7 million compared to a loss of
$3.4 million in the second quarter of 2016, an improvement of $5.1
million or 12.8 percentage points of margin.
- Adjusted EBITDA was income of $2.6
million in the second quarter of 2017, compared to $1.0 million in
the second quarter of 2016, an improvement of $1.6 million.
- GAAP EPS (Diluted) was $0.03 in the
second quarter of 2017, compared to a loss of $0.11 in the second
quarter of 2016. Q2 GAAP EPS (Diluted) was based on 32.2 million
weighted average diluted shares outstanding versus 32.1 million in
the second quarter of 2016. Note that GAAP EPS (Diluted) for the
second quarter includes $0.02 of costs associated with our Series A
preferred stock.
- Non-GAAP EPS (Diluted) was $0.11 in the
second quarter of 2017, compared to a loss of $0.03 in the second
quarter of 2016. Note that Non-GAAP EPS excludes the impact of
non-cash stock-based compensation and other non-recurring items,
such as M&A expenses and restructuring costs.
- The Company ended the quarter with
$86.8 million in cash and cash equivalents and short-term
investments.
Business Highlights
- Our total members grew 22% to 25.2
million at the end of the second quarter of 2017, compared to 20.7
million in the same period of 2016.
- Total families grew to 14.2 million at
the end of the second quarter of 2017, an increase of 23% over the
end of the second quarter of 2016, and total caregivers grew to
11.0 million at the end of the second quarter of 2017, an increase
of 20% over the end of the second quarter of 2016.
Financial Expectations
Q3 2017 Full Year 2017
Revenue $ 43.9 - $ 44.4 $ 172.0 - $ 173.5 Adjusted EBITDA $
5.0 - $ 5.5 $ 19.5 - $ 21.5 Non-GAAP EPS $ 0.07 - $ 0.08 $
0.37 - $ 0.40
Figures in millions except for Non-GAAP EPSQ3 Non-GAAP EPS based
on approximately 37 million weighted average dilutive sharesFull
year Non-GAAP EPS based on approximately 37 million weighted
average diluted shares
Future GAAP Net Income (Loss) and GAAP EPS may be significantly
affected by changes in ongoing assumptions and judgments, and may
also be affected by non-recurring, unusual or unanticipated
charges, expenses or gains, which we are not able to estimate and
which therefore are excluded in the calculation of the Company’s
non-GAAP EPS guidance as described in this press release. Due to
the nature of any such items, we are not able to estimate their
significance, and it is therefore currently not practical to
reconcile adjusted EBITDA and non-GAAP EPS guidance to the most
comparable GAAP measure.
Earnings Teleconference Information
The Company will host a conference call at 8:00 AM ET today to
discuss these results. The conference call will be accessible at
(877) 407-4018 or (201) 689-8471 (International), conference ID#
13666047. The call will also be broadcast simultaneously at
http://investors.care.com. Following completion of the call, a
recorded replay of the webcast will be available on Care.com’s
website. To listen to the telephone replay, call toll-free (844)
512-2921 or (412) 317-6671 (International), conference ID#
13666047. The telephone replay will be available from 11:00 AM ET
August 10 through 11:59 PM ET August 17, 2017. Additional investor
information can be accessed at http://www.care.com.
About Care.com
Since launching in 2007, Care.com (NYSE: CRCM) has been
committed to solving the complex care challenges that impact
families, caregivers, employers, and care service companies. Today,
Care.com is the world’s largest online destination for finding and
managing family care, with 14.2 million families and 11.0 million
caregivers* across more than 20 countries, including the U.S., UK,
Canada and parts of Western Europe, and approximately 1.2 million
employees of corporate clients having access to our services.
Spanning child care to senior care, pet care, housekeeping and
more, Care.com provides a sweeping array of services for families
and caregivers to find, manage and pay for care or find employment.
These include: a comprehensive suite of safety tools and resources
members may use to help make more informed hiring decisions - such
as third-party background check services, monitored messaging, and
tips on hiring best practices; easy ways for caregivers to be paid
online or via mobile app; and Care.com Benefits, including the
household payroll and tax services provided by Care.com HomePay and
the Care Benefit Bucks program, a peer-to-peer pooled, portable
benefits platform funded by household employer contributions which
provides caregivers access to professional benefits. For enterprise
clients, Care.com builds customized benefits packages covering
child care, back up care and senior care consulting services
through its Care@Work business, and serves care businesses with
marketing and recruiting support. To connect families further,
Care.com acquired community platforms Big Tent and Kinsights in
2013 and 2015, respectively. Headquartered in Waltham,
Massachusetts, Care.com has offices in Berlin, Austin and the San
Francisco Bay area.
*As of June 2017
Cautionary Language Concerning Forward-Looking
Statements:
This press release contains "forward-looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to, statements regarding the projected future EBITDA margins of the
business, anticipated investments and future product innovations
and the expected results of those investments and innovations, and
the Company’s financial guidance for the third quarter of 2017 and
full year 2017.
These forward-looking statements are made as of the date they
were first issued and were based on current expectations,
estimates, forecasts and projections as well as the beliefs and
assumptions of management. Words such as “plan,” "expect,"
"anticipate," "should," "believe," "hope," "target," "project,"
"goals," "estimate," "potential," "predict," "may," "will,"
"might," "could," "intend," “designed,” variations of these terms
or the negative of these terms and similar expressions are intended
to identify these forward-looking statements. Forward-looking
statements are subject to a number of risks and uncertainties, many
of which involve factors or circumstances that are beyond the
Company's control. The Company's actual results could differ
materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited
to: our ability to grow our membership while leveraging our
investment in sales and marketing, our success in converting
non-paying members to paying members, our ability to cross-sell new
and existing products and services to our members and to develop
new products and services that members consider valuable, our
ability to protect our brand and maintain our reputation among our
members, and other risks detailed in the Company's other publicly
available filings with the Securities and Exchange Commission. Past
performance is not necessarily indicative of future
results. The forward-looking statements included in this press
release represent the Company's views as of the date of this press
release. The Company anticipates that subsequent events and
developments will cause its views to change. The Company undertakes
no intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. These forward-looking statements should not be
relied upon as representing the Company's views as of any date
subsequent to the date of this press release.
Use of Non-GAAP Financial Measures
To supplement the financial measures presented in the Company’s
press release and related conference call or webcast in accordance
with accounting principles generally accepted in the United States
("GAAP"), we also present the following non-GAAP measures of
financial performance: adjusted EBITDA, non-GAAP net income (loss)
from continuing operations and non-GAAP earnings per share from
continuing operations (“EPS”).
A “non-GAAP financial measure” refers to a numerical measure of
the Company’s historical or future financial performance, financial
position, or cash flows that excludes (or includes) amounts that
are included in (or excluded from) the most directly comparable
measure calculated and presented in accordance with GAAP in the
Company’s financial statements. The Company provides certain
non-GAAP measures as additional information relating to its
operating results as a complement to results provided in accordance
with GAAP. The non-GAAP financial information presented here should
be considered in conjunction with, and not as a substitute for or
superior to, the financial information presented in accordance with
GAAP and should not be considered a measure of the Company’s
liquidity. There are significant limitations associated with the
use of non-GAAP financial measures. Further, these measures may
differ from the non-GAAP information, even where similarly titled,
used by other companies and therefore should not be used to compare
the Company’s performance to that of other companies.
The Company has presented: adjusted EBITDA, non-GAAP net income
(loss) from continuing operations and non-GAAP EPS as non-GAAP
financial measures in this press release. We define adjusted EBITDA
as income (loss) from continuing operations, which excludes the
accretion of preferred stock dividends and issuance costs, plus:
federal, state and franchise taxes, other expense, net,
depreciation and amortization, stock-based compensation, accretion
of contingent consideration, merger and acquisition related costs,
and other unusual or non-cash significant adjustments, such as
impairment and restructuring charges. Adjusted EBITDA eliminates
the effects of financing, income taxes and the accounting effects
of capital spending, which is based on the Company's estimate of
the useful life of tangible and intangible assets. We define
non-GAAP net income as income (loss) from continuing operations,
which excludes the accretion of preferred stock dividends, plus
stock-based compensation, accretion of contingent consideration,
merger and acquisition related costs, and other unusual or non-cash
significant adjustments such as impairment and restructuring
charges. We define non-GAAP EPS as non-GAAP net income divided by
diluted weighted-average shares outstanding, using the treasury
stock method.
The Company believes the use of non-GAAP financial measures, as
a supplement to GAAP measures, is useful to investors in that they
eliminate items that are either not part of the Company's core
operations or do not require a cash outlay, such as stock-based
compensation. Care.com’s management uses these non-GAAP financial
measures when evaluating the Company’s operating performance and
for internal planning and forecasting purposes. The Company
believes that these non-GAAP financial measures help indicate
underlying trends in the Company’s business, are important in
comparing current results with prior period results, and are useful
to investors and financial analysts in assessing the Company’s
operating performance.
Care.com, Inc.
Consolidated Balance
Sheets(in thousands)
July 1,2017
December 31,2016
Assets (unaudited) Current assets: Cash and cash
equivalents $ 71,839 $ 61,094 Short-term investments 15,000 15,000
Accounts receivable (net of allowance of $175 and $163,
respectively) (1) 4,264 2,789 Unbilled accounts receivable (2)
5,734 5,541 Prepaid expenses and other current assets 5,224
3,787 Total current assets 102,061 88,211
Property and equipment, net 4,621 4,947 Intangible assets, net
1,267 1,708 Goodwill 59,380 57,910 Other non-current assets
2,466 2,448 Total assets $ 169,795 $
155,224
Liabilities, redeemable convertible
preferred stock, and stockholders' equity Current liabilities:
Accounts payable (3) $ 3,379 $ 2,483 Accrued expenses and other
current liabilities (4) 13,859 12,798 Deferred revenue (5)
19,522 15,971 Total current liabilities 36,760
31,252 Deferred tax liability 4,472 4,276 Other non-current
liabilities 5,338 5,087 Total
liabilities 46,570 40,615 Series A Redeemable Convertible
Preferred Stock, $0.001 par value; 46 shares designated; 46 shares
issued and outstanding at July 1, 2017 and December 31, 2016; at
aggregate liquidation and redemption value at July 1, 2017 and
December 31, 2016 48,922 47,660 Stockholders' equity Preferred
Stock: $0.001 par value - authorized 5,000 shares at July 1, 2017
and December 31, 2016, respectively Common stock, $0.001 par value;
300,000 shares authorized; 29,737 and 28,984 shares issued and
outstanding at July 1, 2017 and December 31, 2016 respectively 30
29 Additional paid-in capital 259,366 255,031 Accumulated deficit
(185,311 ) (187,808 ) Accumulated other comprehensive income (loss)
218 (303 ) Total stockholders' equity
74,303 66,949 Total liabilities, redeemable
convertible preferred stock and stockholders' equity $ 169,795
$ 155,224
(1)Includes accounts receivable due from related party of $196
and $150 at July 1, 2017 and December 31, 2016
(2)Includes unbilled accounts receivable due from related party
of $180 and $286 at July 1, 2017 and December 31, 2016
(3)Includes accounts payable due to related party of $44 and
$107 at July 1, 2017 and December 31, 2016
(4)Includes accrued expenses and other current liabilities due
to related party of $1,438 and $1,055 at July 1, 2017 and December
31, 2016
(5)Includes deferred revenue associated with related party of
$80 and $151 at July 1, 2017 and December 31, 2016
Care.com, Inc.
Consolidated
Statement of Operations(in thousands, except per share
data) Three Months Ended Six Months Ended
July 1,2017
June 25,2016
July 1,2017
June 25,2016
(unaudited) Revenue (1) $ 41,972 $ 38,184 $ 85,338 $
77,450 Cost of revenue 9,000 7,619 17,766 14,861 Operating
expenses: Selling and marketing (2) 17,853 18,561 37,050 38,028
Research and development 6,666 5,036 12,655 9,911 General and
administrative 8,433 7,933 16,688 15,752 Depreciation and
amortization 423 947 847 1,919 Restructuring charges -
714 - 714 Total
operating expenses 33,375 33,191
67,240 66,324 Operating (loss) income (403 )
(2,626 ) 332 (3,735 ) Other income (expense), net 1,008
(129 ) 1,309 (143 ) Income
(loss) from continuing operations before income taxes 605 (2,755 )
1,641 (3,878 ) (Benefit) provision for income taxes (1,068 )
620 (856 ) 620 Income (loss)
from continuing operations 1,673 (3,375 ) 2,497 (4,498 ) (Loss)
income from discontinued operations, net of tax -
(44 ) - 7,834 Net income (loss)
1,673 (3,419 ) 2,497 3,336 Accretion of Series A Preferred Stock
dividends (660 ) - (1,262 ) - Net income attributable to Series A
Redeemable Convertible Preferred Stock (139 ) -
(169 ) - Net income (loss) attributable
to common stockholders $ 874 $ (3,419 ) $ 1,066 $
3,336 Net income (loss) per share attributable to
common stockholders (Basic): Income (loss) per share from
continuing operations attributable to common stockholders $ 0.03 $
(0.11 ) $ 0.04 $ (0.14 ) Income per share from discontinued
operations attributable to common stockholders -
- - 0.24 Net income
(loss) per share attributable to common stockholders $ 0.03 $ (0.11
) $ 0.04 $ 0.10 Net income (loss) per share attributable to
common stockholders (Diluted): Income (loss) per share from
continuing operations attributable to common stockholders $ 0.03 $
(0.11 ) $ 0.03 $ (0.13 ) Income per share from discontinued
operations attributable to common stockholders -
- - 0.23 Net income
(loss) per share attributable to common stockholders $ 0.03 $ (0.11
) $ 0.03 $ 0.10 Weighted-average shares used to compute net
income (loss) per share attributable to common stockholders: Basic
29,556 32,136 29,352 32,183 Diluted 32,220 32,136 31,746 34,082
(1)Includes related party revenue of $432 and $825 for the three
and six months ended July 1, 2017, respectively(2)Includes related
party expenses of $4,120 and $7,820 for the three and six months
ended July 1, 2017, respectively
Care.com, Inc.
Consolidated Statement of
Cash Flows(in thousands)
Six Months Ended
July 1,2017
June 25,2016
(unaudited) Cash flows from operating activities Net
income $ 2,497 $ 3,336 Income from discontinued operations, net of
tax - 7,834 Income (loss) from
continuing operations 2,497 (4,498 ) Adjustments to reconcile net
income (loss) from continuing operations to net cash provided by
operating activities: Stock-based compensation 3,551 3,014
Depreciation and amortization 1,199 2,314 Deferred taxes 196 538
Foreign currency remeasurement gain 1,157 200 Other non-cash
operating income - (78 ) Changes in operating assets and
liabilities, net of effects from acquisitions: Accounts receivable
(1,448 ) (68 ) Unbilled accounts receivable (191 ) (449 ) Prepaid
expenses and other current assets (1,358 ) (508 ) Other non-current
assets - (14 ) Accounts payable 879 514 Accrued expenses and other
current liabilities 1,258 3,014 Deferred revenue 3,469 1,452 Other
non-current liabilities (69 ) 610 Net cash
provided by operating activities by continuing operations 11,140
6,041 Net cash provided by operating activities by discontinued
operations - 2,481 Net cash provided by
operating activities 11,140 8,522
Cash flows from investing activities Purchases of
property and equipment (387 ) (84 ) Payments for acquisitions, net
of cash acquired - (420 ) Purchases of short-term investment
(15,000 ) -
Sale of short-term investment
15,000 - Net cash used in investing
activities by continuing operations (387 ) (504 )
Cash
flows from financing activities Proceeds from exercise of
common stock options 2,037 925 Net cash
provided by financing activities by continuing operations 2,037 925
Net cash used in financing activities by discontinued operations
- (14,510 ) Net cash provided by (used in)
financing activities 2,037 (13,585 )
Effect of exchange rate changes on cash and cash equivalents
(2,045 ) (56 ) Net increase (decrease) in cash and cash
equivalents 10,745 (5,623 ) Cash and cash equivalents, beginning of
the period 61,094 61,240 Cash and cash
equivalents, end of the period $ 71,839 $ 55,617
Care.com, Inc.Reconciliation of
Adjusted EBITDA & Non-GAAP Net Income (Loss)(in
thousands, except per share data)
Three Months Ended Six
Months Ended
July 1,2017
June 25,2016
July 1,2017
June 25,2016
(unaudited) Income (loss) from continuing operations
$ 1,673 $ (3,375 ) $ 2,497 $ (4,498 ) Federal, state and
franchise taxes (1,004 ) 727 (710 ) 816 Other (income) expense, net
(1,008 ) 129 (1,309 ) 143 Depreciation and amortization 598
1,145 1,199 2,314
EBITDA 259 (1,374 ) 1,677 (1,225 ) Stock-based compensation
1,948 1,646 3,551 3,014 Merger and acquisition related costs 95 16
95 74 Restructuring related costs - 714 - 714 Litigation related
costs - - 75 - Software implementation costs 216 - 216 - Severance
related costs 90 - 121
- Adjusted EBITDA $ 2,608 $ 1,002 $
5,735 $ 2,577 Add back for Non-GAAP Net Income
(Loss) Federal, state and franchise taxes 1,004 (727 ) 710
(816 ) Other income (expense), net 1,008 (129 ) 1,309 (143 )
Depreciation and amortization (598 ) (1,145 )
(1,199 ) (2,314 ) Non-GAAP net income (loss) $ 4,022
$ (999 ) $ 6,555 $ (696 ) Non-GAAP net income (loss)
per share: Basic $ 0.14 $ (0.03 ) $ 0.22 $ (0.02 ) Diluted $ 0.11 $
(0.03 ) $ 0.18 $ (0.02 ) Weighted-average shares used to
compute non-GAAP net income (loss) per share : Basic 29,556 32,136
29,352 32,183 Diluted 36,879 32,136 36,405 34,082
Care.com, Inc.Reconciliation of
Non-GAAP EPS(in thousands, except per share data)
Three Months Ended Six Months Ended
July 1,2017
June 25,2016
July 1,2017
June 25,2016
(unaudited) Weighted-average shares used to compute net
income (loss) per share: Diluted 36,879 32,136 36,405 34,082
Net income (loss) per share (Diluted): Net income (loss) per share
attributable to common stockholders $ 0.02 $ (0.11 ) $ 0.03 $ 0.10
Impact on net income (loss) per share of Series A related costs
0.02 - 0.04 - Adjusted
net income (loss) per share $ 0.05 $ (0.11 ) $ 0.07 $ 0.10
Income from discontinued operations, net of tax - 0.00 - (0.23 )
Stock-based compensation 0.05 0.05 0.10 0.09 Merger and acquisition
related costs 0.00 0.00 0.00 0.00 Restructuring related costs -
0.02 - 0.02 Litigation related costs - - 0.00 - Software
implementation costs 0.01 - 0.01 - Severance related costs
0.00 - 0.00 - Non-GAAP net
income (loss) per share - diluted $ 0.11 $ (0.03 ) $ 0.18 $ (0.02 )
Care.com, Inc.
Supplemental
Data(in thousands, except monthly average revenue per
member) Period Ended
July 1,2017
June 25,2016
Total members* 25,199 20,698 Total families* 14,239 11,588 Total
caregivers* 10,959 9,110 Paying families - US Consumer
Business 294 267 * data is cumulative as of the end of the
respective period and excludes families from discontinued
operations
Period Ended
July 1,2017
June 25,2016
Monthly Average
Revenue per Paying Family
US Consumer Business $ 38 $ 38
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170810005293/en/
Investor Relations:ICR, Inc.Denise Garcia,
781-795-7244investors@care.com
Care com (NYSE:CRCM)
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