Strength in Core Matching Demonstrates Path to
Profitability
Care.com, Inc. (NYSE: CRCM), the world's largest online care
destination for finding and managing family care, today announced
financial results for the third quarter ended on September 27,
2014.
- Third quarter revenue was $32.1
million, an increase of 48% over the third quarter of 2013. Third
quarter revenue was $29.6 million, an increase of 37% over the same
period last year, excluding revenue from Citrus Lane, the social
ecommerce platform we acquired during the quarter.
- Sales and marketing investments totaled
$22.0 million excluding the results of Citrus Lane, an increase of
18% over the third quarter of 2013, as we grew spend at
approximately half the rate of revenue and continued our
investments in organic, unpaid channels of growth.
- Cross platform monetization
accelerated, with 44% of new Payments members sourced via
Care.com.
- Citrus Lane, the social ecommerce
platform acquired during the quarter, demonstrated strong
performance, and is on-track with 2014 financial expectations.
“Our platform is strong, driving accelerated cross sell to our
high ROI payments business, and increased engagement and product
development opportunities through Citrus Lane,” said Sheila Lirio
Marcelo, Founder, Chairwoman, and CEO of Care.com. “We believe the
third quarter demonstrated the strength of the Care.com model,
noticeably leveraging our investments in sales and marketing and
providing a clear path toward our profitability target for our core
US matching business in 2014.”
Financial Results
- Revenue for the third quarter was $32.1
million. Revenue totaled $29.6 million, a 37% increase from $21.7
million in the third quarter of 2013, excluding Citrus Lane
revenue.
- US Consumer Matching revenue totaled
$22.3 million in the third quarter, a 34% increase from $16.6
million in the third quarter 2013.
- Payments revenue totaled $3.5 million
in the third quarter, a 34% increase from $2.6 million in the third
quarter of 2013.
- Other revenue totaled $6.3 million in
the third quarter. Other revenue totaled $3.8 million, a 56%
increase from $2.5 million in the third quarter of 2013, excluding
revenue from Citrus Lane.
- Net loss for the third quarter 2014 was
$14.5 million, compared to net loss of $11.7 million in the third
quarter of 2013.
- Adjusted EBITDA was a loss of $8.7
million in the third quarter 2014. Adjusted EBITDA excluding the
results of Citrus Lane was a loss of $7.1 million, compared to an
adjusted EBITDA loss of $8.2 million in the third quarter of
2013.
- GAAP EPS was $(0.46) in the third
quarter. Q3 GAAP EPS was based on 31.4 million weighted average
basic shares outstanding.
- Non-GAAP EPS was $(0.31) in the third
quarter. Non-GAAP EPS excludes the impact of non-cash stock based
compensation and non-recurring items, such as M&A.
- The Company ended the quarter with
$83.1 million in cash and cash equivalents.
Business Highlights
- Our total members grew 45% to 13.3
million at the end of the third quarter, including approximately
300,000 added via our acquisition of Citrus Lane, compared to 9.2
million in the third quarter of 2013. Total families grew to 7.5
million at the end of the third quarter, a 51% increase over last
year, and total caregivers grew to 5.8 million at the end of the
third quarter, an increase of 37% over last year.
- Third quarter 2014 U.S. Consumer
Matching end of period paying members grew to 225,000, a 27%
increase over the third quarter of last year.
- Third quarter 2014 Payment members grew
to over 13,000, a 26% increase over the third quarter of last
year.
- We delivered strong organic revenue
growth of 37% while increasing sales and marketing expenses,
excluding the impact of Citrus Lane, just 18%, and direct marketing
for core US matching and payments businesses just 7%. We leveraged
sales and marketing excluding Citrus Lane by 12 percentage points
over the third quarter of 2013.
- Cross sell to our high-ROI Payments
business increased during US Matching’s peak season, with 44% of
new Payments members in the third quarter coming from
Care.com.
- Average US monthly unique visitors grew
to 7.4 million, an 18% increase over the third quarter of last
year, with 58% of visitors via mobile device.
- SEO traffic accelerated as we expanded
our content and local presence, resulting in a 72% increase over
the third quarter of last year.
- Citrus Lane contributed $2.5 million in
revenue and an EBITDA loss of $1.6 million in the third quarter,
strong performance that was in line with our expectations.
Financial Expectations
Q4 2014
FY 2014
Revenue $33.0 - $35.0 $116.0 - $118.0 Adjusted EBITDA $0.0 -
$1.0 ($25.0) - ($24.0) Non GAAP EPS ($0.06) - ($0.02)
($1.07) - ($1.04) Weighted average basic shares 31.5 31.5
28.9 28.9
Figures in millions except for Non-GAAP EPS
Non-GAAP EPS based on weighted average diluted shares
Note: Expectations include impact of Citrus Lane for July 18 -
December 27
Earnings Teleconference Information
The Company will discuss its third quarter 2014 financial
results during a teleconference today, October 30, 2014, at 8:00 AM
ET. The conference call can be accessed at (877) 407-4018 or (201)
689-8471 (international), conference ID# 13593057. The call will
also be broadcast simultaneously at http://investors.care.com.
Following the 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 (877) 870-5176 or (858) 384-5517
(international), conference ID # 13593057. The telephone replay
will be available from 11:00 AM ET October 30 through 11:59 PM ET
November 6, 2014. Additional investor information can be accessed
at http://www.care.com
About Care.com
Care.com (NYSE: CRCM) is the world’s largest online destination
for finding and managing family care. As of September 2014, the
Company had 13.3 million members spanning 16 countries, including
the United States, the United Kingdom, Canada and parts of Western
Europe. Care.com’s web and mobile platforms enable families to
connect to care providers and caregiving services in a reliable and
easy way, while also helping care providers find meaningful work.
Through its consumer matching platform, tools and resources,
Care.com allows families to make more informed hiring decisions.
The Company also enables families to pay caregivers electronically
online or via mobile device and also subscribe to Care.com HomePay
to manage their household payroll and tax matters. As a further
extension of its marketplace for families, Care.com also sells
curated products for children, through Citrus Lane, the leading
social ecommerce platform designed for moms. The Company also
enables families to connect with one another locally through forums
via BigTent, an online community platform with more than 1 million
registered members nationwide and approximately 1,700 parenting
groups. In addition, Care.com serves hundreds of thousands of
families whose employers provide access to Care.com’s consumer
matching platform, as well as backup dependent care, as a corporate
benefit through the company’s Workplace Solutions unit.
Headquartered in Waltham, Massachusetts, Care.com has offices in
Berlin, Austin, New York City and Mountain View.
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 anticipated profitability of our US
matching business, projected acceleration of our cross sell
opportunities, expectations regarding Citrus Lane, including its
potential to increase member engagement and product development
opportunities, and the Company’s financial guidance for the third
quarter of 2014 and full year 2014.
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 "expect,"
"anticipate," "should," "believe," "hope," "target," "project,"
"goals," "estimate," "potential," "predict," "may," "will,"
"might," "could," "intend," 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, market
acceptance of Citrus Lane’s products and services, , and 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 loss 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 loss and
non-GAAP EPS as non-GAAP financial measures in this press release.
We define adjusted EBITDA as net loss, 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. 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 loss
as net loss, plus stock-based compensation, accretion of contingent
consideration, merger and acquisition related costs and other
unusual or non-cash significant adjustments. We define non-GAAP EPS
as non-GAAP net loss divided by weighted basic shares
outstanding.
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)
September 27,2014
December 28,2013
(unaudited) Assets Current assets: Cash and cash
equivalents $ 83,083 $ 29,959 Restricted cash 510 246
Accounts receivable (net of allowance of
$0 and $56, respectively)
2,711 1,609 Unbilled accounts receivable 3,447 2,477 Prepaid
expenses and other current assets 3,070 1,731 Inventories
2,097 - Total current assets 94,918 36,022
Property and equipment, net 1,846 1,553 Intangible assets, net
11,558 11,418 Goodwill 104,872 62,686 Other non-current assets
2,948 2,150 Total assets $ 216,142
$ 113,829
Liabilities, redeemable
convertible preferred stock and stockholders' equity (deficit)
Current liabilities: Accounts payable $ 7,329 $ 2,031 Accrued
expenses and other current liabilities 16,844 7,023 Current
contingent acquisition consideration 10,643 5,463 Deferred revenue
13,653 8,304 Total current liabilities
48,469 22,821 Contingent acquisition consideration 7,549 5,166
Deferred tax liability 2,070 1,112 Other non-current liabilities
845 785 Total liabilities 58,933 29,884
Redeemable convertible preferred stock,
$0.01 par value; 22,632 shares authorized atDecember 28, 2013;
21,299 shares issued and outstanding at December 28, 2013;
aggregateliquidation value of $161,666 as of December 28, 2013
- 152,251 Stockholders' equity (deficit) Preferred stock,
$0.001 par value; 5,000 shares authorized; no shares issued and
outstanding - -
Common stock, $0.001 par value; 300,000
shares authorized; 31,484 and 3,197 shares issuedand outstanding as
of September 27, 2014 and December 28, 2013, respectively
31 3 Additional paid-in capital 275,932 9,311 Accumulated deficit
(119,440 ) (79,563 ) Accumulated other comprehensive income
686 1,943 Total stockholders' equity (deficit)
157,209 (68,306 ) Total liabilities,
redeemable convertible preferred stock and stockholders' equity
(deficit) $ 216,142 $ 113,829
Care.com, Inc.Consolidated Statement of Operations(in thousands,
except per share data)
Three Months Ended Nine Months
Ended
September 27,2014
September 28,2013
September 27,2014
September 28,2013
(unaudited) (unaudited) Revenue $ 32,054 $
21,681 $ 83,161 $ 58,976 Cost of revenue 9,132 5,158 20,616 13,992
Operating expenses: Selling and marketing 22,900 18,590 61,371
43,852 Research and development 4,417 2,862 12,559 8,419 General
and administrative 9,479 5,450 22,299 13,307 Depreciation and
amortization 1,113 1,090 3,249
3,166 Total operating expenses 37,909
27,992 99,478 68,744
Operating loss (14,987 ) (11,469 ) (36,933 ) (23,760 ) Other
expense, net (644 ) (201 ) (3,323 )
(318 ) Loss before income taxes (15,631 ) (11,670 ) (40,256 )
(24,078 ) (Benefit from) provision for income taxes (1,178 )
62 (384 ) 587 Net loss $ (14,453
) $ (11,732 ) $ (39,872 ) $ (24,665 ) Accretion of preferred stock
- (14 ) (4 ) (42 ) Net loss
attributable to common stockholders $ (14,453 ) $ (11,746 ) $
(39,876 ) $ (24,707 ) Net loss per share attributable to
common stockholders: Basic and diluted $ (0.46 ) $ (3.86 ) $ (1.42
) $ (8.36 )
Weighted-average shares used to compute
net loss pershare attributable to common stockholders:
Basic and diluted 31,362 3,042 27,995 2,957
Care.com, Inc. Consolidated Statement of Cash
Flows
Nine Months Ended (in thousands)
September 27,2014
September 28,2013
(unaudited) Cash flows from
operating activities Net loss $ (39,872 ) $ (24,665 )
Adjustments to reconcile net loss to net cash used in operating
activities: Stock-based compensation 4,829 1,196 Depreciation and
amortization 3,914 5,167 Deferred taxes (548 ) 683 Contingent
consideration expense 316 423 Change in fair value of contingent
consideration payable in preferred stock 2,258 - Change in fair
value of stock warrants 606 81 Changes in operating assets and
liabilities, net of effects from acquisitions: Restricted cash (421
) (360 ) Accounts receivable (1,003 ) (449 ) Unbilled accounts
receivable (974 ) (557 ) Inventories (209 ) - Prepaid expenses and
other current assets (167 ) (535 ) Other non-current assets 490 5
Accounts payable 3,479 2,797 Accrued expenses and other current
liabilities 9,270 7,506 Deferred revenue 3,705 3,188 Other
non-current liabilities 727 146 Net
cash used in operating activities (13,600 ) (5,374 )
Cash
flows from investing activities
Purchases of property and equipment (878 ) (1,069 ) Payments for
acquisitions, net of cash acquired (23,364 ) (398 ) Cash withheld
for purchase consideration (73 ) - Other investing activities, net
(2,825 )
-
Net cash used in investing activities (27,140 ) (1,467 )
Cash flows from financing activities Proceeds from
initial public offering net of offering costs 96,007 - Proceeds
from exercise of common stock 319 455 Payments for deferred
offering costs - (235 ) Payments of contingent consideration
previously established in purchase accounting (2,845 )
- Net cash provided by financing activities 93,481
220 Effect of exchange rate changes on cash and cash
equivalents 383 (152 ) Net increase (decrease)
in cash and cash equivalents 53,124 (6,773 ) Cash and cash
equivalents, beginning of the period 29,959
44,776 Cash and cash equivalents, end of the period $ 83,083
$ 38,003
Care.com, Inc. Reconciliation of
Adjusted EBITDA (in thousands)
Three Months Ended Nine
Months Ended
September 27,2014
September 28,2013
September 27,2014
September 28,2013
(unaudited) (unaudited) Net Loss $ (14,453 ) $
(11,732 ) $ (39,872 ) $ (24,665 ) Federal, state and
franchise taxes (1,129 ) 74 (157 ) 642 Other expense, net 644 201
3,323 318 Depreciation and amortization 1,394
1,801 3,914 5,167 EBITDA
(13,544 ) (9,656 ) (32,792 ) (18,538 ) Stock-based
compensation 2,747 478 4,829 1,196 Accretion of contingent
consideration 257 148 404 423 Non-cash rent expense 398 - 398 -
Merger and acquisition related costs 1,457 - 2,109 - IPO related
costs - 838 164
838 Adjusted EBITDA $ (8,685 ) $ (8,192 ) $ (24,888 )
$ (16,081 )
Care.com, Inc. Reconciliation of Non-GAAP Net Loss
Three Months Ended Nine Months Ended (in thousands,
except per share data)
September 27,2014
September 28,2013
September 27,2014
September 28,2013
(unaudited) (unaudited) Net loss $ (14,453 ) $
(11,732 ) $ (39,872 ) $ (24,665 ) Stock-based compensation
2,747 478 4,829 1,196 Accretion of contingent consideration 257 148
404 423 Non-cash rent expense 398 - 398 - Merger and acquisition
related costs 1,457 - 2,109 - IPO related costs - 838 164 838
Preferred stock and warrant valuation adjustments -
87 2,864 81
Non-GAAP net loss $ (9,594 ) $ (10,181 ) $ (29,104 ) $ (22,127 )
Non-GAAP net loss per share attributable
to commonstockholders:
Basic and diluted $ (0.31 ) $ (3.35 ) $ (1.04 ) $ (7.48 )
Weighted-average shares used to compute
non-GAAP netloss per share attributable to common stockholders:
Basic and diluted 31,362 3,042 27,995 2,957
Care.com, Inc. Supplemental Data (in
thousands)
Three Months Ended
September 27,2014
September 28,2013
Total members** 13,280 9,178 Total families** 7,454 4,932 Total
caregivers* 5,826 4,246 Paying members - US Matching 225 178
Paying members - Payments 13 11
** data is cumulative as of the end of the
respective period and includes approximately300k members via our
acquisition of Citrus Lane
* data is cumulative as of the end of the respective period
Three Months Ended
September 27,2014
September 28,2013
Monthly Average Revenue per Member US Matching $ 36 $
34 Payments $ 88 $ 84
Investor Relations:ICR, Inc.Denise Garcia,
781-795-7244investors@care.com
Care com (NYSE:CRCM)
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