Reports $10.7M FY Net Income
Adjusted EBITDA Margin of 13%, Exceeding
Expectations
Care.com (NYSE: CRCM), the world's largest online destination
for finding and managing family care, today is announcing financial
results for the fourth quarter and full year ended December 30,
2017.
“2017 was another year of significant progress for
Care.com. We continued innovating in our core U.S. Consumer
business and growing our enterprise Care@Work business, while
expanding Adjusted EBITDA margins by over 500 basis points to 13%
of revenue. And we generated $26 million in cash and
short-term investments, finishing the year with $102 million on the
balance sheet,” said Sheila Lirio Marcelo, Founder, Chairwoman and
CEO of Care.com. “In 2018, we intend to innovate further,
focusing on Care 3.0 in particular, with the goal of driving
acceleration in top-line growth in 2019 and beyond, while
maintaining our momentum toward our long-term EBITDA margin target
of 20-25%.”
Financial Results
- Revenue for the fourth quarter of 2017
was $44.2 million, an increase of 2% from $43.5 million in the
fourth quarter of 2016 (note that 2016 included the impact of a
53rd week; excluding the impact of the 53rd week, the year over
year increase was 9%). Revenue for the year was $174.1 million, an
increase of 8% from $161.8 million in the fourth quarter of 2017
(excluding the impact of the 53rd week, the year over year increase
was 10%).
- Revenue attributable to the US Consumer
offering totaled $34.0 million in the fourth quarter of 2017, a
decrease of 2% from $34.7 million in the fourth quarter of 2016
(note that 2016 included the impact of a 53rd week; excluding the
impact of the 53rd week, the year over year increase was 5%). For
the year, revenue attributable to the US Consumer offering totaled
$137.9 million, an increase of 6% from $130.4 million in 2016
(excluding the impact of the 53rd week, the year over year increase
was 8%).
- Revenue attributable to the Care@Work
and B2B Offerings, as well as our services in our international
markets, totaled $10.2 million in the fourth quarter of 2017, an
increase of 16% from $8.8 million in the fourth quarter of 2016
(excluding the impact of the 53rd week, the year over year increase
was 28%). For the year, revenue attributable to these offerings
totaled $36.2, an increase of 15% from $31.4 million in 2016
(excluding the impact of the 53rd week, the year over year increase
was 18%).
- Income from continuing operations in
the fourth quarter of 2017 was $7.9 million compared to $5.0
million in the fourth quarter of 2016, an improvement of $2.9
million or 6.4 percentage points of margin. For the full year,
income from continuing operations was $10.7 million, compared to a
loss from continuing operations of $0.7 million in 2016, an
improvement of $11.4 million. Note that both the fourth quarter and
full year 2017 include the impact of a one-time benefit of $4.0
million related to the recently passed Tax Cuts and Jobs Act.
- Adjusted EBITDA was $11.4 million in
the fourth quarter of 2017, compared to $9.1 million in the fourth
quarter of 2016, an improvement of $2.3 million. For the year,
adjusted EBITDA was $23.3 million, compared to $13.4 million in
2016, an improvement of $9.9 million.
- GAAP EPS (Diluted) was $0.19 in the
fourth quarter of 2017, compared to $0.12 in the fourth quarter of
2016. Q4 GAAP EPS (Diluted) was based on 33.1 million weighted
average diluted shares outstanding versus 30.8 million in the
fourth quarter of 2016. For the year, GAAP EPS (Diluted) was $0.22,
compared to $0.10 in 2016. FY’17 GAAP EPS (Diluted) was based on
32.4 million weighted average diluted shares outstanding versus
30.5 million in FY’16.
- Non-GAAP EPS (Diluted) was $0.32 in the
fourth quarter of 2017, compared to $0.20 in the fourth quarter of
2016. 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. For the year, Non-GAAP EPS (Diluted) was
$0.69, compared to $0.19 in 2016.
- The Company ended the quarter with
$101.7 million in cash and cash equivalents and short-term
investments.
Business Highlights
- Our total members grew 20% to 27.3
million at the end of FY’17, compared to 22.8 million in the same
period of 2016.
- Total families grew to 15.5 million at
the end of FY’17, an increase of 20% over the end of 2016, and
total caregivers grew to 11.8 million at the end of FY’17, an
increase of 19% over the end of 2016.
Financial Expectations
Q1 2018 Guidance Full Year
2018 Guidance Revenue $ 46.5 - $ 47.0 $ 190.0 - $ 191.0
Adjusted EBITDA $ 6.0 - $ 6.5 $ 30.0 - $ 31.0
Non-GAAP EPS ~$0.13 $ 0.63 - $ 0.65
Figures in millions except for Non-GAAP EPSQ1 Non-GAAP EPS based
on approximately 38 million weighted average dilutive sharesFY'18
full year Non-GAAP EPS based on approximately 40 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). 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# 13675210. The telephone replay will
be available from 11:00 AM ET February 27 through 11:59 PM ET March
6, 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 15.5 million families and 11.8 million
caregivers* across more than 20 countries, including the U.S., UK,
Canada and parts of Western Europe, and approximately 1.3 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 December 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 expected results of product
investments and innovations, the projected future EBITDA margins of
the business, and the Company’s financial guidance for the first
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 (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
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, 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) 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)
December 30,2017
December 31,2016
Assets (unaudited) Current assets: Cash and cash
equivalents $ 86,728 $ 61,094 Short-term investments 15,000 15,000
Accounts receivable (net of allowance of $102 and $163,
respectively) (1) 5,171 2,789 Unbilled accounts receivable (2)
5,454 5,541 Prepaid expenses and other current assets 4,883
3,787 Total current assets 117,236 88,211
Property and equipment, net 3,651 4,947 Intangible assets, net
1,142 1,708 Goodwill 60,281 57,910 Other non-current assets
2,066 2,448 Total assets $ 184,376 $
155,224
Liabilities, redeemable convertible
preferred stock, and stockholders' equity Current liabilities:
Accounts payable (3) $ 1,873 $ 2,483 Accrued expenses and other
current liabilities (4) 17,086 12,798 Deferred revenue (5)
18,626 15,971 Total current liabilities 37,585
31,252 Deferred tax liability 1,292 4,276 Other non-current
liabilities 5,779 5,087 Total
liabilities 44,656 40,615 Series A Redeemable Convertible
Preferred Stock, $0.001 par value; 46 shares designated; 46 shares
issued and outstanding at December 30, 2017 and December 31, 2016;
at aggregate liquidation and redemption value at December 30, 2017
and December 31, 2016 50,259 47,660 Stockholders' equity Preferred
Stock: $0.001 par value - authorized 5,000 shares at December 30,
2017 and December 31, 2016, respectively - - Common stock, $0.001
par value; 300,000 shares authorized; 30,390 and 28,984 shares
issued and outstanding at December 30, 2017 and December 31, 2016
respectively 30 29 Additional paid-in capital 266,030 255,031
Accumulated deficit (177,145 ) (187,808 ) Accumulated other
comprehensive income (loss) 546 (303 ) Total
stockholders' equity 89,461 66,949
Total liabilities, redeemable convertible preferred stock and
stockholders' equity $ 184,376 $ 155,224
(1) Includes accounts receivable due from related party of $307
and $150 at December 30, 2017 and December 31, 2016(2) Includes
unbilled accounts receivable due from related party of $222 and
$286 at December 30, 2017 and December 31, 2016(3) Includes
accounts payable due to related party of $128 and $107 at December
30, 2017 and December 31, 2016(4) Includes accrued expenses and
other current liabilities due to related party of $542 and $1,055
at December 30, 2017 and December 31, 2016(5) Includes deferred
revenue associated with related party of $2 and $151 at December
30, 2017 and December 31, 2016
Care.com, Inc.
Consolidated Statement of Operations
(in thousands, except per share data)
Three Months Ended Fiscal Year
Ended
December 30,2017
December 31,2016
December 30,2017
December 31,2016
(unaudited) Revenue (1) $ 44,216 $ 43,513 $ 174,090 $
161,754 Cost of revenue 8,662 8,573 35,773 31,830 Operating
expenses: Selling and marketing (2) 12,107 14,163 66,906 72,266
Research and development 6,566 5,376 25,423 20,402 General and
administrative 9,686 8,742 35,214 31,939 Depreciation and
amortization 418 471 1,684 2,972 Restructuring charges 158
- 3,136 714 Total
operating expenses 28,935 28,752
132,363 128,293 Operating income 6,619 6,188
5,954 1,631 Other income (expense), net 282
(854 ) 2,203 (1,064 ) Income from continuing
operations before income taxes 6,901 5,334 8,157 567 (Benefit from)
provision for income taxes (1,003 ) 330
(2,506 ) 1,282 Income (loss) from continuing
operations 7,904 5,004 10,663 (715 ) (Loss) income from
discontinued operations, net of tax - (24 )
- 7,761 Net income 7,904 4,980 10,663
7,046 Accretion of Series A Preferred Stock dividends (657 ) (694 )
(2,599 ) (1,310 ) Accretion of Series A Preferred Stock issuance
costs - - - (2,124 ) Net income attributable to Series A Redeemable
Convertible Preferred Stock (992 ) (582 )
(1,120 ) (467 ) Net income attributable to common
stockholders $ 6,255 $ 3,704 $ 6,944 $ 3,145
Net income per share attributable to common
stockholders (Basic): Income (loss) from continuing operations
attributable to common stockholders $ 0.21 $ 0.13 $ 0.23 $ (0.12 )
Income from discontinued operations attributable to common
stockholders - - -
0.22 Net income per share attributable to common
stockholders $ 0.21 $ 0.13 $ 0.23 $ 0.10 Net income per
share attributable to common stockholders (Diluted): Income (loss)
from continuing operations attributable to common stockholders $
0.19 $ 0.12 $ 0.22 $ (0.12 ) Income from discontinued operations
attributable to common stockholders - -
- 0.22 Net income per share
attributable to common stockholders $ 0.19 $ 0.12 $ 0.22 $ 0.10
Weighted-average shares used to compute net income per share
attributable to common stockholders: Basic 30,189 28,864 29,680
30,535 Diluted 33,128 30,815 32,406 30,535
(1) Includes related party revenue of $573 and $628 for the
three months ended December 30, 2017 and December 31, 2016,
respectively. Includes related party revenue of $1,854 and $1,593
for the fiscal years ended December 30, 2017 and December 31, 2016,
respectively.(2) Includes related party expenses of $1,997 and
$2,706 for the three months ended December 30, 2017 and December
31, 2016, respectively. Includes related party expenses of $13,472
and $14,724 for the fiscal years ended December 30, 2017 and
December 31, 2016, respectively.
Care.com, Inc.
Consolidated Statement of Cash Flows
(in thousands) Fiscal Year Ended
December 30,2017
December 31,2016
(unaudited) Cash flows from operating activities Net
income $ 10,663 $ 7,046 Income from discontinued operations, net of
tax - 7,761 Income (loss) from
continuing operations 10,663 (715 ) Adjustments to reconcile net
income (loss) from continuing operations to net cash provided by
operating activities: Stock-based compensation 9,693 6,470
Depreciation and amortization 2,240 3,722 Deferred taxes (2,983 )
1,110 Foreign currency remeasurement (gain) loss (1,838 ) 1,261
Other non-cash operating expense 489 41 Changes in operating assets
and liabilities, net of effects from acquisitions: Accounts
receivable (2,349 ) 281 Unbilled accounts receivable 95 (1,947 )
Prepaid expenses and other current assets (647 ) (589 ) Other
non-current assets 95 (3 ) Accounts payable (638 ) (688 ) Accrued
expenses and other current liabilities 3,031 938 Deferred revenue
2,531 2,581 Other non-current liabilities 1,751
228 Net cash provided by operating activities by
continuing operations 22,133 12,690 Net cash provided by operating
activities by discontinued operations - 2,421
Net cash provided by operating activities 22,133
15,111
Cash flows from investing
activities Purchases of property and equipment and software
(792 ) (244 ) Payments for acquisitions, net of cash acquired -
(420 ) Proceeds from security deposit for sub-lease - 84 Payments
for security deposits (33 ) -
Purchases of short-term investments
(15,000 ) (15,000 )
Sale of short-term investments
15,000 - Net cash used in investing
activities by continuing operations (825 ) (15,580 )
Cash
flows from financing activities Proceeds from issuance of
Series A Preferred Stock, net of issuance costs of $2,124 - 44,226
Proceeds from exercise of common stock options 3,906 1,406 Payments
for the repurchases of common stock - (30,524
) Net cash provided by financing activities by continuing
operations 3,906 15,108 Net cash used in financing activities by
discontinued operations - (14,510 ) Net cash
provided by financing activities 3,906 598
Effect of exchange rate changes on cash and cash
equivalents 420 (275 ) Net increase (decrease)
in cash and cash equivalents 25,634 (146 ) Cash and cash
equivalents, beginning of the period 61,094
61,240 Cash and cash equivalents, end of the period $ 86,728
$ 61,094 Care.com, Inc.
Reconciliation of Adjusted EBITDA & Non-GAAP Net Income
(in thousands, except per share data)
Three Months Ended Fiscal Year
Ended
December 30,2017
December 31,2016
December 30,2017
December 31,2016
(unaudited) Income (loss) from continuing operations
$ 7,904 $ 5,004 $ 10,663 $ (715 ) Federal, state and
franchise taxes (929 ) 408 (2,228 ) 1,619 Other (income) expense,
net (282 ) 854 (2,203 ) 1,064 Depreciation and amortization
539 652 2,240 3,722
EBITDA 7,232 6,918 8,472 5,690 Stock-based
compensation 3,107 1,705 9,693 6,470 Merger and acquisition related
costs 171 28 407 128 Restructuring related costs 158 - 3,136 714
Litigation related costs 561 400 636 400 Software implementation
costs 14 - 471 - Severance related costs 166 -
487 - Adjusted EBITDA $ 11,409
$ 9,051 $ 23,302 $ 13,402 Add
back for Non-GAAP Net Income Federal, state and franchise
taxes 929 (408 ) 2,228 (1,619 ) Other income (expense), net 282
(854 ) 2,203 (1,064 ) Depreciation and amortization (539 )
(652 ) (2,240 ) (3,722 ) Non-GAAP net income $
12,081 $ 7,137 $ 25,493 $ 6,997
Non-GAAP net income per share: Basic $ 0.40 $ 0.25 $ 0.86 $ 0.23
Diluted $ 0.32 $ 0.20 $ 0.69 $ 0.19 Weighted-average shares
used to compute non-GAAP net income per share : Basic 30,189 28,864
29,680 30,535 Diluted 37,915 35,354 37,192 36,736
Care.com, Inc.
Reconciliation of Non-GAAP EPS
(in thousands, except per share
data)
Three Months Ended
Fiscal Year Ended
December 30,2017
December 31,2016
December 30,2017
December 31,2016
(unaudited) Weighted-average shares used to compute net
income per share: Diluted 37,915 35,354 37,192 36,736 Net
income per share (Diluted): Net income per share attributable to
common stockholders $ 0.16 $ 0.10 $ 0.19 $ 0.09 Impact on net
income per share of Series A related costs 0.04 0.04
0.10 0.11 Adjusted net income per share $ 0.21
$ 0.14 $ 0.29 $ 0.19 Income from discontinued operations,
net of tax - 0.00 - (0.21 ) Stock-based compensation 0.08 0.05 0.26
0.18 Merger and acquisition related costs 0.00 0.00 0.01 0.00
Restructuring related costs 0.00 - 0.08 0.02 Litigation related
costs 0.01 0.01 0.02 0.01 Software implementation costs 0.00 - 0.01
- Severance related costs 0.00 - 0.01 -
Non-GAAP net income per share - diluted $ 0.32 $ 0.20 $ 0.69
$ 0.19 Care.com, Inc.
Supplemental Data
(in thousands, except monthly average revenue per member)
Period Ended
December 30,2017
December 31,2016
Total members* 27,312 22,826 Total families* 15,510 12,900 Total
caregivers* 11,802 9,926 Paying families - US Consumer
Business 302 274 * data is cumulative as of the end of the
respective period and excludes families from discontinued
operations
Period Ended
December 30,2017
December 31,2016
Monthly Average
Revenue per Paying Family
US Consumer Business $ 40 $ 40
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180227005528/en/
Investor Relations:ICR, Inc.Seth Potter,
781-795-7244investors@care.com
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