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 June 30, 2018.
“We had a strong second quarter of 2018, with revenue at the top
end of our guidance range and – while we were just below breakeven
on GAAP net income as a result of the foreign exchange impact of a
weakening Euro – EBITDA generated across our businesses exceeded
our expectations and EBITDA margin was double prior year at 13%.
These notable EBITDA gains were driven by the strength in the
underlying health of our core US Consumer business, which continued
to show strong improvements in unit economics as we also grew
end-of-period paying families by 10% versus prior year. As a
result, we generated an incremental $7 million in cash,”
said Sheila Lirio Marcelo, Founder, Chairwoman and CEO
of Care.com. “Over the past couple of years, we have been
pleased with our continuous progress on initiatives that we expect
will drive consistent long-term profitable growth – including top
line acceleration in 2019 and beyond.”
Financial Results
- Revenue for the second quarter of 2018
was $46.0 million, an increase of 10% from $42.0 million in the
second quarter of 2017.
- Revenue attributable to the US Consumer
offering totaled $35.6 million in the second quarter of 2018, an
increase of 7% from $33.4 million in the second quarter of
2017.
- Revenue attributable to the Care@Work
and other B2B Offerings, as well as our services in our
international markets, totaled $10.4 million in the second quarter
of 2018, an increase of 21% from $8.6 million in the second quarter
of 2017.
- Net loss was $0.2 million in the second
quarter of 2018, compared to net income of $1.7 million in the
second quarter of 2017, a decrease of $1.9 million, primarily
attributable to an increase in stock-based compensation expense and
a foreign exchange loss resulting from the weakening of the
Euro.
- Adjusted EBITDA was $5.9 million in the
second quarter of 2018, compared to $2.6 million in the second
quarter of 2017, an improvement of $3.3 million.
- GAAP EPS (Diluted) was ($0.03) in the
second quarter of 2018, compared to $0.03 in the second quarter of
2017. Q2 GAAP EPS (Diluted) was based on 30.6 million weighted
average diluted shares outstanding versus 32.2 million in the
second quarter of 2017.
- Non-GAAP EPS (Diluted) was $0.14 in the
second quarter of 2018, compared to $0.11 in the second quarter of
2017. Note that Non-GAAP EPS excludes the impact of non-cash
stock-based compensation, adjustments relating to preferred stock
and other non-recurring items, such as M&A expenses and
restructuring costs.
- The Company ended the quarter with
$113.6 million in cash and cash equivalents and short-term
investments.
Business Highlights
- Our total members grew 17% to 29.6
million at the end of the second quarter of 2018, compared to 25.2
million in the same period of 2017.
- Total families grew to 16.9 million at
the end of the second quarter of 2018, an increase of 19% over the
same period of 2017, and total caregivers grew to 12.7 million at
the end of the second quarter of 2018, an increase of 16% over the
same period of 2017.
Financial Expectations
Q3 2018 Guidance Full Year 2018
Guidance Revenue $ 49.0 - $ 49.3 $ 191.5 - $ 193.0
Adjusted EBITDA $ 5.25 - $ 5.75 $ 31.0 - $ 32.0
Non-GAAP EPS ~$0.12 $ 0.65 - $ 0.67 Figures in millions
except for Non-GAAP EPS Q3 Non-GAAP EPS based on approximately 39
million weighted average dilutive shares FY'18 full year Non-GAAP
EPS based on approximately 40 million weighted average diluted
shares
Future GAAP Net Income 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). 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# 13681410. The telephone replay will
be available from 11:00 AM ET July 30 through 11:59 PM ET August
13, 2018. Additional investor information can be accessed at
http://investors.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 16.9 million families and 12.7 million
caregivers* across more than 20 countries, including the U.S., UK,
Canada and parts of Western Europe, and approximately 1.4 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. Headquartered in Waltham,
Massachusetts, Care.com has offices in Berlin, Austin and the San
Francisco Bay area.
*As of June 2018
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 expected results of product
investments and initiatives, anticipated revenue growth, and the
Company’s financial guidance for the third quarter of 2018 and full
year 2018.
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 and extending the length of
time that paying members continue to pay for our services, 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 and
non-GAAP earnings per share (“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
and non-GAAP EPS as non-GAAP financial measures in this press
release. We define adjusted EBITDA as income / (loss), which
excludes the accretion of preferred stock dividends and issuance
costs, as well as: federal, state and franchise taxes, other income
(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), 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)
June 30,
December 30,
2018
2017
Assets (unaudited) Current assets: Cash and cash
equivalents $ 98,455 $ 86,728 Short-term investments 15,099 15,000
Accounts receivable (net of allowance of $139 and $102,
respectively) (1) 4,714 5,171 Unbilled accounts receivable (2)
5,692 5,454 Prepaid expenses and other current assets 6,235
4,883 Total current assets 130,195 117,236
Property and equipment, net 3,469 3,651 Intangible assets, net
2,188 1,142 Goodwill 64,603 60,281 Other non-current assets
2,708 2,066 Total assets $ 203,163 $
184,376
Liabilities, redeemable convertible
preferred stock, and stockholders' equity Current liabilities:
Accounts payable (3) $ 2,042 $ 1,873 Accrued expenses and other
current liabilities (4) 16,928 17,086 Current contingent
acquisition consideration 485 - Deferred revenue (5) 21,579
18,626 Total current liabilities 41,034 37,585
Non-current contingent acquisition consideration 428 - Deferred tax
liability 1,327 1,292 Other non-current liabilities 6,347
5,779 Total liabilities 49,136 44,656
Series A Redeemable Convertible Preferred Stock, $0.001 par value -
46 shares designated; 46 shares issued and outstanding at June 30,
2018 and December 30, 2017; at aggregate liquidation and redemption
value at June 30, 2018 and December 30, 2017, respectively 51,604
50,259 Stockholders' equity Preferred Stock: $0.001 par value -
authorized 5,000 shares at June 30, 2018 and December 30, 2017,
respectively - - Common stock, $0.001 par value; 300,000 shares
authorized; 31,239 and 30,390 shares issued and outstanding at June
30, 2018 and December 30, 2017 respectively 31 30 Additional
paid-in capital 276,580 266,030 Accumulated deficit (174,484 )
(177,145 ) Accumulated other comprehensive income 296
546 Total stockholders' equity 102,423
89,461 Total liabilities, redeemable convertible
preferred stock, and stockholders' equity $ 203,163 $
184,376 (1) Includes accounts receivable due from
related party of $896 and $307 at June 30, 2018 and December 30,
2017 (2) Includes unbilled accounts receivable due from related
party of $389 and $222 at June 30, 2018 and December 30, 2017 (3)
Includes accounts payable due to related party of $10 and $128 at
June 30, 2018 and December 30, 2017 (4) Includes accrued expenses
and other current liabilities due to related party of $780 and $542
at June 30, 2018 and December 30, 2017 (5) Includes deferred
revenue associated with related party of $92 and $2 at June 30,
2018 and December 30, 2017 Care.com, Inc.
Consolidated Statement of Operations (in
thousands, except per share data) Three Months Ended
Six Months Ended
June 30,
July 1,
June 30,
July 1,
2018
2017
2018
2017
(unaudited) Revenue (1) $ 45,966 $ 41,972 $ 93,291 $
85,338 Cost of revenue 9,823 9,000 19,266 17,766 Operating
expenses: Selling and marketing (2) 15,901 17,853 32,758 37,050
Research and development 8,492 6,666 16,780 12,655 General and
administrative 11,593 8,433 22,060 16,688 Depreciation and
amortization 411 423 829 847 Restructuring charges 17
- 479 - Total operating
expenses 36,414 33,375 72,906
67,240 Operating (loss) income (271 ) (403 )
1,119 332 Other (expense) income, net (768 ) 1,008
(206 ) 1,309 (Loss) Income before
income taxes (1,039 ) 605 913 1,641 Benefit from income taxes
(870 ) (1,068 ) (1,615 ) (856 ) Net
(loss) income (169 ) 1,673 2,528 2,497 Accretion of Series A
Preferred Stock dividends (665 ) (660 ) (1,345 ) (1,262 ) Net
income attributable to Series A Redeemable Convertible Preferred
Stock - (139 ) (163 ) (169 ) Net
(loss) income attributable to common stockholders $ (834 ) $ 874
$ 1,020 $ 1,066 Net (loss) income per
share attributable to common stockholders (Basic): $ (0.03 ) $ 0.03
$ 0.03 $ 0.04 Net (loss) income per share attributable to common
stockholders (Diluted): $ (0.03 ) $ 0.03 $ 0.03 $ 0.03
Weighted-average shares used to compute net (loss) income per share
attributable to common stockholders: Basic 30,591 29,556 30,792
29,352 Diluted 30,591 32,220 33,486 31,746 (1) Includes
related party revenue of $705 and $432 for the three months ended
June 30, 2018 and July 1, 2017, respectively. Includes related
party revenue of $1,342 and $825 for the six months ended June 30,
2018 and July 1, 2017, respectively. (2) Includes related party
expenses of $2,617 and $4,120 for the three months ended June 30,
2018 and July 1, 2017, respectively. Includes related party
expenses of $5,653 and $7,820 for the six months ended June 30,
2018 and July 1, 2017 respectively. Care.com, Inc.
Consolidated Statement of Cash Flows (in
thousands) Six Months Ended
June 30, 2018
July 1, 2017 (unaudited) Cash flows from operating
activities Net income $ 2,528 $ 2,497 Adjustments to
reconcile net income to net cash provided by operating activities:
Stock-based compensation 8,700 3,551 Depreciation and amortization
924 1,199 Deferred income taxes (1,691 ) 196 Contingent
consideration expense 19 - Loss on impairment of intangible assets
142 - Foreign currency remeasurement loss 478 1,157 Changes in
operating assets and liabilities, net of effects from acquisitions:
Accounts receivable 441 (1,448 ) Unbilled accounts receivable (241
) (191 ) Prepaid expenses and other current assets 390 (1,358 )
Other non-current assets (381 ) - Accounts payable 178 879 Accrued
expenses and other current liabilities (715 ) 1,258 Deferred
revenue 3,086 3,469 Other non-current liabilities 780
(69 ) Net cash provided by operating activities 14,638
11,140
Cash flows from investing activities Purchases
of property and equipment; and software (399 ) (387 ) Payments for
acquisitions, net of cash acquired (5,309 ) - Purchases of
short-term investment (15,099 ) (15,000 ) Sale of short-term
investement 15,000 15,000 Net cash used
in investing activities (5,807 ) (387 )
Cash flows from
financing activities Proceeds from exercise of common stock
options 3,192 2,037 Net cash provided
by financing activities 3,192 2,037 Effect of exchange rate
changes on cash and cash equivalents (296 ) (2,045 )
Net increase in cash, cash equivalents, and restricted cash 11,727
10,745 Cash, cash equivalents and restricted cash, beginning of the
period 86,728 61,094 Cash, cash
equivalents and restricted cash, end of the period $ 98,455
$ 71,839 Care.com, Inc.
Reconciliation of Adjusted
EBITDA & Non-GAAP Net Income (in thousands, except per
share data) Three Months Ended
Six Months Ended
June 30, 2018
July 1, 2017
June 30, 2018
July 1, 2017 (unaudited) Net (loss)
income $ (169 ) $ 1,673 $ 2,528 $ 2,497 Federal, state and
franchise taxes (783 ) (1,004 ) (1,222 ) (710 ) Other expense
(income), net 768 (1,008 ) 206 (1,309 ) Depreciation and
amortization 461 598 924
1,199 EBITDA 277 259 2,436 1,677 Stock-based
compensation 4,988 1,948 8,700 3,551 Merger and acquisition related
costs 335 95 511 95 Restructuring related costs 17 - 479 -
Litigation related costs 20 - 20 75 Software implementation costs
150 216 303 216 Severance related costs - 90 67 121 Impairment of
intangible assets 142 - 142
- Adjusted EBITDA $ 5,929 $ 2,608
$ 12,658 $ 5,735 Add back for Non-GAAP
Net Income Federal, state and franchise taxes 783 1,004
1,222 710 Other (expense) income, net (768 ) 1,008 (206 ) 1,309
Depreciation and amortization (461 ) (598 )
(924 ) (1,199 ) Non-GAAP net income $ 5,483 $ 4,022
$ 12,750 $ 6,555 Non-GAAP net income
per share: Basic $ 0.18 $ 0.14 $ 0.41 $ 0.22 Diluted $ 0.14 $ 0.11
$ 0.33 $ 0.18
Weighted-average shares used to compute
non-GAAP net income per share:
Basic 30,591 29,556 30,792 29,352 Diluted 38,047 36,879 38,401
36,405 Care.com, Inc.
Reconciliation of Non-GAAP EPS
(in thousands, except per share data) Three
Months Ended Six Months Ended
June 30,
July 1,
June 30,
July 1,
2018
2017
2018
2017
(unaudited) Weighted-average shares used to compute net
income per share: Diluted 38,047 36,879 38,401 36,405 Net
income per share (Diluted): Net (loss) income per share
attributable to common stockholders $ (0.02 ) $ 0.02 $ 0.03 $ 0.03
Impact on net income per share of Series A related costs
0.02 0.02 0.04 0.04
Adjusted net income per share $ (0.00 ) $ 0.05 $ 0.07 $ 0.07
Stock-based compensation 0.13 0.05 0.23 0.10 Merger and
acquisition related costs 0.01 0.00 0.01 0.00 Restructuring related
costs 0.00 - 0.01 - Litigation related costs 0.00 - 0.00 0.00
Software implementation costs 0.00 0.01 0.01 0.01 Severance related
costs - 0.00 0.00 0.00 Impairment of intangible assets 0.00
- 0.00 - Non-GAAP
net income per share - diluted $ 0.14 $ 0.11 $ 0.33
$ 0.18 Care.com, Inc.
Supplemental Data
(in thousands, except monthly average revenue per paying
family) Period Ended
June 30, 2018
July 1, 2017 Total members 29,560 25,198 Total
families 16,874 14,239 Total caregivers 12,686 10,959 Paying
families - US Consumer Business 324 294
Period Ended
June 30, 2018
July 1, 2017
Monthly Average
Revenue per Paying Family
US Consumer Business
$
37
$
38
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180730005188/en/
Investor Relations:ICR, Inc.Staci Mortenson,
781-795-7244investors@care.com
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