Care.com (NYSE: CRCM), the world’s largest online destination for
finding and managing family care, today is announcing financial results
for the first quarter ended March 30, 2019.
“In Q1 we saw strong revenue growth of 13% versus Q1 2018,” said Sheila
Lirio Marcelo, Founder, Chairwoman and CEO of Care.com. “In addition to
sharing our solid Q1 financial results, we are making important
safety-related announcements today. We believe that investing in our new
safety enhancements while maintaining our investments in the overall
user experience will enable us to continue to build trust in our leading
brand – thereby driving member growth, improving lifetime value, and
sustaining ongoing profitable growth.”
Financial Results
-
Revenue for the first quarter of 2019 was $53.3 million, an increase
of 13% from $47.3 million in the first quarter of 2018.-
Revenue attributable to the US Consumer offering totaled $40.8
million in the first quarter of 2019, an increase of 10% from
$37.1 million in the first quarter of 2018. -
Revenue attributable to our Other businesses totaled $12.5 million
in the first quarter of 2019, an increase of 22% from $10.2
million in the first quarter of 2018.
-
Revenue attributable to the US Consumer offering totaled $40.8
-
Net loss was $1.0 million in the first quarter of 2019, compared to
net income of $2.7 million in the first quarter of 2018, a decrease of
$3.7 million. -
Adjusted EBITDA was $4.3 million in the first quarter of 2019,
compared to $6.7 million in the first quarter of 2018, a decrease of
$2.4 million. -
GAAP EPS (Diluted) was a loss of $0.05 in the first quarter of 2019,
compared to income of $0.05 in the first quarter of 2018. Q1 GAAP EPS
(Diluted) was based on 32.2 million weighted average diluted shares
outstanding versus 33.3 million in the first quarter of 2018. -
Non-GAAP EPS (Diluted) was $0.12 in the first quarter of 2019,
compared to the first quarter of 2018, which was $0.19. 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 $125.1 million in cash and cash
equivalents and short-term investments.
Business Highlights
-
Our total members grew 16% to 32.9 million at the end of the first
quarter of 2019, compared to 28.4 million in the same period of 2018. -
Total families grew to 19.1 million at the end of the first quarter of
2019, an increase of 18% over the same period of 2018, and total
caregivers grew to 13.9 million at the end of the first quarter of
2019, an increase of 14% over the same period of 2018.
Financial Expectations
| Q2 2019 Guidance | Full Year 2019 Guidance | |||||||||||||||||
| Revenue | $ | 52.0 | – | $ | 52.3 | $ | 217.0 |
– |
$ | 221.0 | ||||||||
| Adjusted EBITDA | $ | 3.7 | – | $ | 4.0 | $ | 25.0 | – | $ | 27.0 | ||||||||
| Non-GAAP EPS |
~$0.08 |
$ |
0.52 |
– | $ |
0.56 |
||||||||||||
| Figures in millions except for Non-GAAP EPS | ||||||||||||||||||
|
Q2 Non-GAAP EPS based on approximately 39 million weighted average dilutive shares |
||||||||||||||||||
|
FY’19 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# 13689392. The telephone replay will be available from
11:00 AM ET May 9, 2019 through 11:59 PM ET May 23, 2019. 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
19.1 million families and 13.9 million caregivers* across more than 20
countries, including the U.S., UK, Canada and parts of Western Europe,
and approximately 1.7 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 March 2019
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
second quarter of 2019 and full year 2019.
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 has no intention nor undertakes any obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
law. 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) | ||||||||||
|
March 30, |
December 29, |
|||||||||
| Assets | (unaudited) | |||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 90,022 | $ | 92,432 | ||||||
| Short-term investments | 35,099 | 35,099 | ||||||||
|
Accounts receivable (net of allowance of $100 and $100, respectively) (1) |
6,732 | 4,663 | ||||||||
| Unbilled accounts receivable (2) | 6,033 | 6,394 | ||||||||
| Prepaid expenses and other current assets | 8,398 | 7,223 | ||||||||
| Total current assets | 146,284 | 145,811 | ||||||||
| Property and equipment, net | 3,260 | 3,423 | ||||||||
| Intangible assets, net | 6,770 | 4,061 | ||||||||
| Goodwill | 73,134 | 68,176 | ||||||||
| Other non-current assets | 2,908 | 2,859 | ||||||||
| Operating lease right of use assets, net | 20,871 | – | ||||||||
| Deferred tax assets | 43,978 | 43,737 | ||||||||
| Total assets | $ | 297,205 | $ | 268,067 | ||||||
|
Liabilities, redeemable convertible preferred stock, and stockholders’ equity |
||||||||||
| Current liabilities: | ||||||||||
| Accounts payable (3) | $ | 1,740 | $ | 3,437 | ||||||
| Accrued expenses and other current liabilities (4) | 19,292 | 20,463 | ||||||||
| Current contingent acquisition consideration | 917 | 1,527 | ||||||||
| Deferred revenue (5) | 26,797 | 20,176 | ||||||||
| Current operating lease liabilities | 4,481 | – | ||||||||
|
Total current liabilities |
53,227 | 45,603 | ||||||||
| Non-current contingent acquisition consideration |
– |
438 | ||||||||
| Other non-current liabilities | 1,428 | 6,806 | ||||||||
| Non-current operating lease liabilities | 23,303 | – | ||||||||
| Total liabilities | 77,958 | 52,847 | ||||||||
|
Series A Redeemable Convertible Preferred Stock, $0.001 par value – 46 shares designated; 46 shares issued and outstanding at March 30, 2019 and December 29, 2018; at aggregate liquidation and redemption value at March 30, 2019 and December 29, 2018 |
53,725 | 53,007 | ||||||||
| Stockholders’ equity | ||||||||||
|
Preferred Stock, $0.001 par value; 5,000 shares authorized at March 30, 2019 and December 29, 2018, respectively |
– | – | ||||||||
|
Common stock, $0.001 par value; 300,000 shares authorized; 32,426 and 32,057 shares issued and outstanding at March 30, 2019 and December 29, 2018 respectively |
32 | 32 | ||||||||
| Additional paid-in capital | 290,898 | 286,295 | ||||||||
| Accumulated deficit |
(125,150 |
) | (124,122 | ) | ||||||
| Accumulated other comprehensive (loss) income |
(258 |
) | 8 | |||||||
| Total stockholders’ equity | 165,522 | 162,213 | ||||||||
|
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity |
$ | 297,205 | $ | 268,067 | ||||||
| (1) |
Includes accounts receivable due from related party of $822 and $421 at March 30, 2019 and December 29, 2018, respectively |
|
| (2) |
Includes unbilled accounts receivable due from related party of $255 and $680 at March 30, 2019 and December 29, 2018, respectively |
|
| (3) |
Includes accounts payable due to related party of $0 and $530 at March 30, 2019 and December 29, 2018, respectively |
|
| (4) |
Includes accrued expenses and other current liabilities due to related party of $1,031 and $403 at March 30, 2019 and December 29, 2018, respectively |
|
| (5) |
Includes deferred revenue associated with related party of $172 and $1 at March 30, 2019 and December 29, 2018, respectively |
|
| Care.com, Inc. | |||||||||
| Consolidated Statement of Operations | |||||||||
| (in thousands, except per share data) | |||||||||
| Three Months Ended | |||||||||
|
March 30, |
March 31, |
||||||||
| (unaudited) | |||||||||
| Revenue (1) | $ | 53,336 | $ | 47,325 | |||||
| Cost of revenue | 13,802 | 9,443 | |||||||
| Operating expenses: | |||||||||
| Selling and marketing (2) | 18,604 | 16,857 | |||||||
| Research and development | 11,224 | 8,288 | |||||||
| General and administrative | 11,308 | 10,467 | |||||||
| Depreciation and amortization | 447 | 418 | |||||||
| Restructuring charges | 231 | 462 | |||||||
| Total operating expenses | 41,814 | 36,492 | |||||||
| Operating (loss) income | (2,280 | ) | 1,390 | ||||||
| Other income, net | 269 | 562 | |||||||
| (Loss) Income before income taxes | (2,011 | ) | 1,952 | ||||||
| Benefit from income taxes | (983 | ) | (745 | ) | |||||
| Net (loss) income | (1,028 | ) | 2,697 | ||||||
| Accretion of Series A Preferred Stock dividends | (718 | ) | (680 | ) | |||||
|
Net income attributable to Series A Redeemable Convertible Preferred Stock |
– | (276 | ) | ||||||
| Net (loss) income attributable to common stockholders | $ | (1,746 | ) | $ | 1,741 | ||||
|
Net (loss) income per share attributable to common stockholders (Basic): |
$ | (0.05 | ) | $ | 0.06 | ||||
|
Net (loss) income per share attributable to common stockholders (Diluted): |
$ | (0.05 | ) | $ | 0.05 | ||||
|
Weighted-average shares used to compute net (loss) income per share attributable to common stockholders: |
|||||||||
| Basic | 32,209 | 30,551 | |||||||
| Diluted | 32,209 | 33,344 | |||||||
| (1) |
Includes related party revenue of $946 and $637 for the three months ended March 30, 2019 and March 31, 2018, respectively. |
|
| (2) |
Includes related party expenses of $3,221 and $3,036 for the three months ended March 30, 2019 and March 31, 2018, respectively. |
|
| Care.com, Inc. | |||||||||
| Reconciliation of Adjusted EBITDA & Non-GAAP Net Income | |||||||||
| (in thousands, except per share data) | |||||||||
| Three Months Ended | |||||||||
|
March 30,
2019 |
March 31,
2018 |
||||||||
| (unaudited) | |||||||||
| Net (loss) income | $ | (1,028 | ) | $ | 2,697 | ||||
| Federal, state and franchise taxes | (859 | ) | (439 | ) | |||||
| Other expense (income), net | (269 | ) | (562 | ) | |||||
| Depreciation and amortization | 739 | 463 | |||||||
| EBITDA | (1,417 | ) | 2,159 | ||||||
| Stock-based compensation | 4,054 | 3,712 | |||||||
| Merger and acquisition related costs | 1,436 | 176 | |||||||
| Restructuring related costs | 231 | 462 | |||||||
| Litigation related costs | 21 | – | |||||||
| Software implementation costs | 8 | 153 | |||||||
| Severance related costs | – | 67 | |||||||
| Adjusted EBITDA | $ | 4,333 | $ | 6,729 | |||||
| Add back for Non-GAAP Net Income | |||||||||
| Federal, state and franchise taxes | 859 | 439 | |||||||
| Other income, net | 269 | 562 | |||||||
| Depreciation and amortization | (739 | ) | (463 | ) | |||||
| Non-GAAP net income | $ | 4,722 | $ | 7,267 | |||||
| Non-GAAP net income per share: | |||||||||
| Basic | $ | 0.15 | $ | 0.24 | |||||
| Diluted | $ | 0.12 | $ | 0.19 | |||||
|
Weighted-average shares used to compute non-GAAP net income per share : |
|||||||||
| Basic | 32,209 | 30,551 | |||||||
| Diluted | 39,725 | 38,195 | |||||||
| Care.com, Inc. | |||||||||
| Reconciliation of Non-GAAP EPS | |||||||||
| (in thousands, except per share data) | |||||||||
| Three Months Ended | |||||||||
|
March 30,
2019 |
March 31,
2018 |
||||||||
| (unaudited) | |||||||||
| Weighted-average shares used to compute net income per share: | |||||||||
| Diluted | 39,725 | 38,195 | |||||||
|
Net (loss) income per share (Diluted): |
|||||||||
|
Net (loss) income per share attributable to common stockholders |
$ | (0.04 | ) | $ | 0.05 | ||||
| Impact on net income per share of Series A related costs | 0.02 | 0.03 | |||||||
|
Adjusted net (loss) income per share |
$ | (0.03 | ) | $ | 0.07 | ||||
| Stock-based compensation | 0.10 | 0.10 | |||||||
| Merger and acquisition related costs | 0.04 | 0.00 | |||||||
| Restructuring related costs | 0.01 | 0.01 | |||||||
| Litigation related costs | 0.00 | – | |||||||
| Software implementation costs | 0.00 | 0.00 | |||||||
| Severance related costs | – | 0.00 | |||||||
| Non-GAAP net income per share – diluted | $ | 0.12 | $ | 0.19 | |||||
| Care.com, Inc. | |||||||||||
| Supplemental Data | |||||||||||
| (in thousands, except monthly average revenue per paying family) | |||||||||||
| Period Ended | |||||||||||
|
March 30,
2019 |
March 31,
2018 |
||||||||||
| Total members | 32,944 | 28,420 | 16 | % | |||||||
| Total families | 19,062 | 16,195 | 18 | % | |||||||
| Total caregivers | 13,882 | 12,225 | 14 | % | |||||||
| Paying families – US Consumer Business | 350 | 318 | 10 | % | |||||||
| Period Ended | |||||||||||
|
March 30,
2019 |
March 31,
2018 |
||||||||||
| Monthly Average Revenue per Paying Family | |||||||||||
| US Consumer Business | $ | 40 | $ | 40 | |||||||
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