Care.com CRCM, the world's largest online destination for finding and managing family care, today is announcing financial results for the first quarter ended April 1, 2017.
"Q1 was a strong start to 2017 for us. We exceeded our expectations on both the top and bottom lines and increased our guidance for the full year," said Sheila Lirio Marcelo, Founder, Chairwoman and CEO of Care.com. "As we continue to innovate, we intend to further strengthen what is today the largest two-sided network for finding and managing family care in the home while further expanding our margins in 2017 and increasing shareholder value. We are committed to growing profitably as we drive toward our long-term EBITDA margin target of 20 to 25%."
Financial Results
-
Revenue for the first quarter of 2017 was $43.4 million, a 10%
increase from $39.3 million in the first quarter of 2016.
- Revenue attributable to the US Consumer offering totaled $35.2 million in the first quarter of 2017, an increase of 10% from $32.1 million in the first quarter of 2016.
- Revenue attributable to the Care@Work and B2B Offerings, as well as our services in our international markets, totaled $8.2 million in the first quarter of 2017, an increase of 14% from $7.2 million in the first quarter of 2016.
- Income from continuing operations in the first quarter of 2017 was $0.8 million compared to a loss of $1.1 million in the first quarter of 2016, an improvement of $1.9 million or 5 percentage points of margin.
- Adjusted EBITDA was income of $3.1 million in the first quarter of 2017, compared to $1.6 million in the first quarter of 2016, an improvement of $1.5 million.
- GAAP EPS (Diluted) was $0.01 in the first quarter of 2017, compared to $0.20 in the first quarter of 2016, which included $0.23 of income associated with discontinued operations. Q1 GAAP EPS (Diluted) was based on 31.3 million weighted average basic shares outstanding versus 33.6 million in the first quarter of 2016. Note that GAAP EPS for the first quarter includes $(0.02) of costs associated with our Series A preferred stock.
- Non-GAAP EPS (Diluted) was $0.07 in the first quarter of 2017, compared to $0.01 in the first 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 $81.3 million in cash and cash equivalents and short-term investments.
Business Highlights
- Our total members grew 23% to 24.0 million at the end of the first quarter of 2017, compared to 19.5 million in the same period of 2016.
- Total families grew to 13.6 million at the end of the first quarter of 2017, an increase of 24% over the end of the first quarter of 2016, and total caregivers grew to 10.4 million at the end of the first quarter of 2017, an increase of 22% over the end of the first quarter of 2016.
Financial Expectations
| Q2 2017 | Full Year 2017 | ||||||||||||||||||
| Revenue | $ |
41.0 |
- | $ |
41.5 |
$ | 171.0 | - | $ | 173.0 | |||||||||
| Adjusted EBITDA | $ | 1.25 | - | $ | 1.75 | $ | 19.5 | - | $ | 21.5 | |||||||||
| Non-GAAP EPS | $ | 0.01 | - | $ | 0.02 | $ | 0.35 | - | $ | 0.38 | |||||||||
Figures in millions except for Non-GAAP EPS
Q2 Non-GAAP EPS based
on approximately 37 million weighted average dilutive shares
Full
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# 13659579. 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# 13659579. The telephone replay will be available from 11:00 AM ET May 3 through 11:59 PM ET May 10, 2017. Additional investor information can be accessed at http://www.care.com.
About Care.com
Since launching in 2007, Care.com 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 13.6 million families and 10.4 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 March 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 future profitability of our business on an operating income and adjusted EBITDA basis, our ability to increase shareholder value, and the Company's financial guidance for the second 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," 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 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) | |||||||||||||
|
April 1, |
December 31, |
||||||||||||
| Assets | (unaudited) | ||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 66,317 | $ | 61,094 | |||||||||
| Short-term investments | 15,000 | 15,000 | |||||||||||
| Accounts receivable (net of allowance of $178 and $125, respectively) (1) | 5,782 | 2,789 | |||||||||||
| Unbilled accounts receivable (2) | 4,862 | 5,541 | |||||||||||
| Prepaid expenses and other current assets | 4,720 | 3,787 | |||||||||||
| Total current assets | 96,681 | 88,211 | |||||||||||
| Property and equipment, net | 4,881 | 4,947 | |||||||||||
| Intangible assets, net | 1,483 | 1,708 | |||||||||||
| Goodwill | 58,128 | 57,910 | |||||||||||
| Other non-current assets | 2,450 | 2,448 | |||||||||||
| Total assets | $ | 163,623 | $ | 155,224 | |||||||||
| Liabilities, redeemable convertible preferred stock, and stockholders' equity | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable (3) | $ | 1,779 | $ | 2,483 | |||||||||
| Accrued expenses and other current liabilities (4) | 14,378 | 12,798 | |||||||||||
| Deferred revenue (5) | 19,447 | 15,971 | |||||||||||
| Total current liabilities | 35,604 | 31,252 | |||||||||||
| Deferred tax liability | 4,422 | 4,276 | |||||||||||
| Other non-current liabilities | 5,206 | 5,087 | |||||||||||
| Total liabilities | 45,232 | 40,615 | |||||||||||
|
Series A Redeemable Convertible Preferred Stock, $0.001 par value;
46 shares designated; 46 shares issued and outstanding |
48,262 | 47,660 | |||||||||||
| Stockholders' equity | |||||||||||||
| Preferred Stock: $0.001 par value - authorized 5,000 shares at April 1, 2017 and December 31, 2016, respectively | |||||||||||||
|
Common stock, $0.001 par value; 300,000 shares authorized; 29,386
and 28,984 shares issued and outstanding at April 1, |
29 | 29 | |||||||||||
| Additional paid-in capital | 257,359 | 255,031 | |||||||||||
| Accumulated deficit | (186,984 | ) | (187,808 | ) | |||||||||
| Accumulated other comprehensive loss | (275 | ) | (303 | ) | |||||||||
| Total stockholders' equity | 70,129 | 66,949 | |||||||||||
| Total liabilities, redeemable convertible preferred stock and stockholders' equity | $ | 163,623 | $ | 155,224 | |||||||||
|
(1) Includes accounts receivable due from related party of $95 and $150 at April 1, 2017 and December 31, 2016 |
|||||||||||||
|
(2) Includes unbilled accounts receivable due from related party of $144 and $286 at April 1, 2017 and December 31, 2016 |
|||||||||||||
|
(3) Includes accounts payable due to related party of $0 and $107 at April 1, 2017 and December 31, 2016 |
|||||||||||||
|
(4) Includes accrued expenses and other current liabilities due to related party of $863 and $1,055 at April 1, 2017 and December 31, 2016 |
|||||||||||||
|
(5) Includes deferred revenue associated with related party of $114 and $151 as of April 1, 2017 and December 31, 2016 |
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| Care.com, Inc. | |||||||||||||
| Consolidated Statement of Operations | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| Three Months Ended | |||||||||||||
|
April 1, |
March 26, |
||||||||||||
| (unaudited) | |||||||||||||
| Revenue (1) | $ | 43,366 | $ | 39,266 | |||||||||
| Cost of revenue | 8,766 | 7,242 | |||||||||||
| Operating expenses: | |||||||||||||
| Selling and marketing (2) | 19,197 | 19,467 | |||||||||||
| Research and development | 5,989 | 4,875 | |||||||||||
| General and administrative | 8,255 | 7,819 | |||||||||||
| Depreciation and amortization | 424 | 972 | |||||||||||
| Total operating expenses | 33,865 | 33,133 | |||||||||||
| Operating income (loss) | 735 | (1,109 | ) | ||||||||||
| Other income (expense), net | 301 | (14 | ) | ||||||||||
| Income (Loss) from continuing operations before income taxes | 1,036 | (1,123 | ) | ||||||||||
| Provision for income taxes | 212 | - | |||||||||||
| Income (Loss) from continuing operations | 824 | (1,123 | ) | ||||||||||
| Income from discontinued operations, net of tax | - | 7,878 | |||||||||||
| Net income | 824 | 6,755 | |||||||||||
| Accretion of Series A Preferred Stock dividends | (602 | ) | - | ||||||||||
| Net income attributable to Series A Redeemable Convertible Preferred Stock | (30 | ) | - | ||||||||||
|
Net income attributable to common stockholders |
$ | 192 | $ | 6,755 | |||||||||
| Net income (loss) per share attributable to common stockholders (Basic): | |||||||||||||
| Income (Loss) per share from continuing operations attributable to common stockholders | $ | 0.01 | $ | (0.03 | ) | ||||||||
| Income per share from discontinued operations attributable to common stockholders | - | $ | 0.24 | ||||||||||
| Net income per share attributable to common stockholders | $ | 0.01 | $ | 0.21 | |||||||||
| Net income (loss) per share attributable to common stockholders (Diluted): | |||||||||||||
| Income (Loss) per share from continuing operations attributable to common stockholders | $ | 0.01 | $ | (0.03 | ) | ||||||||
| Income per share from discontinued operations attributable to common stockholders | $ | - | $ | 0.23 | |||||||||
| Net income per share attributable to common stockholders | $ | 0.01 | $ | 0.20 | |||||||||
| Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | |||||||||||||
| Basic | 29,149 | 32,229 | |||||||||||
| Diluted | 31,282 | 33,588 | |||||||||||
|
(1) Includes related party revenue of $392 for the three months ended April 1, 2017 |
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|
(2) Includes related party expenses of $3,699 for the three months April 1, 2017 |
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| Care.com, Inc. | ||||||||||||||
| Consolidated Statement of Cash Flows | ||||||||||||||
| (in thousands) | ||||||||||||||
| Year-Ended | ||||||||||||||
|
April 1, |
March 26, |
|||||||||||||
| (unaudited) | ||||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net income | $ | 824 | $ | 6,755 | ||||||||||
| Income from discontinued operations, net of tax | - | 7,878 | ||||||||||||
| Income (Loss) from continuing operations | 824 | (1,123 | ) | |||||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||
| Stock-based compensation | 1,603 | 1,368 | ||||||||||||
| Depreciation and amortization | 601 | 1,169 | ||||||||||||
| Deferred taxes | 146 | - | ||||||||||||
| Foreign currency remeasurement gain | 240 | 24 | ||||||||||||
| Other non-cash operating expenses | - | (56 | ) | |||||||||||
| Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||||||||||
| Accounts receivable | (2,986 | ) | 2 | |||||||||||
| Unbilled accounts receivable | 679 | (231 | ) | |||||||||||
| Prepaid expenses and other current assets | (921 | ) | (465 | ) | ||||||||||
| Accounts payable | (707 | ) | 19 | |||||||||||
| Accrued expenses and other current liabilities | 1,625 | 558 | ||||||||||||
| Deferred revenue | 3,462 | 1,437 | ||||||||||||
| Other non-current liabilities | 19 | 154 | ||||||||||||
| Net cash provided by operating activities by continuing operations | 4,585 | 2,856 | ||||||||||||
| Net cash provided by operating activities by discontinued operations | - | 2,602 | ||||||||||||
| Net cash provided by operating activities | 4,585 | 5,458 | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchases of property and equipment | (271 | ) | (26 | ) | ||||||||||
| Payments for acquisitions, net of cash acquired | - | (420 | ) | |||||||||||
| Purchases of short-term investment | (15,000 | ) | - | |||||||||||
| Sale of short-term investement | 15,000 | - | ||||||||||||
| Net cash used in investing activities by continuing operations | (271 | ) | (446 | ) | ||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from exercise of common stock options | 1,330 | 579 | ||||||||||||
| Net cash provided by financing activities by continuing operations | 1,330 | 579 | ||||||||||||
| Net cash used in financing activities by discontinued operations | - | (14,510 | ) | |||||||||||
| Net cash provided by (used in) financing activities | 1,330 | (13,931 | ) | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (421 | ) | (29 | ) | ||||||||||
| Net increase (decrease) in cash and cash equivalents | 5,223 | (8,948 | ) | |||||||||||
| Cash and cash equivalents, beginning of the period | 61,094 | 61,240 | ||||||||||||
| Cash and cash equivalents, end of the period | $ | 66,317 | $ | 52,292 | ||||||||||
| Care.com, Inc. | |||||||||||
| Reconciliation of Adjusted EBITDA & Non-GAAP Net Income | |||||||||||
| (in thousands, except per share data) | |||||||||||
| Three Months Ended | |||||||||||
|
April 1, |
March 26, |
||||||||||
| (unaudited) | |||||||||||
| Income (Loss) from continuing operations | $ | 824 | $ | (1,123 | ) | ||||||
| Federal, state and franchise taxes | 294 | 89 | |||||||||
| Other (income) expense, net | (301 | ) | 14 | ||||||||
| Depreciation and amortization | 601 | 1,169 | |||||||||
| EBITDA | 1,418 | 149 | |||||||||
| Stock-based compensation | 1,603 | 1,368 | |||||||||
| Merger and acquisition related costs | - | 58 | |||||||||
| Litigation related costs | 75 | - | |||||||||
| Severance related costs | 31 | - | |||||||||
| Adjusted EBITDA | $ | 3,127 | $ | 1,575 | |||||||
| Add back for Non-GAAP Net Income | |||||||||||
| Federal, state and franchise taxes | (294 | ) | (89 | ) | |||||||
| Other income (expense), net | 301 | (14 | ) | ||||||||
| Depreciation and amortization | (601 | ) | (1,169 | ) | |||||||
| Non-GAAP net income | $ | 2,533 | $ | 303 | |||||||
| Non-GAAP net income per share: | |||||||||||
| Basic | $ | 0.09 | $ | 0.01 | |||||||
| Diluted | $ | 0.07 | $ | 0.01 | |||||||
|
Weighted-average shares used to compute |
|||||||||||
| Basic | 29,149 | 32,229 | |||||||||
| Diluted | 35,878 | 33,588 | |||||||||
|
Care.com, Inc. |
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|
Reconciliation of Non-GAAP EPS |
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|
(in thousands, except per share data) |
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|
|
||||||||||
| Three Months Ended | ||||||||||
|
April 1, |
March 26, |
|||||||||
| (unaudited) | ||||||||||
|
Weighted-average shares used to compute net income per share: |
||||||||||
| Basic | 29,149 | 32,229 | ||||||||
| Net income per share (Basic): | ||||||||||
| Net income per share attributable to common stockholders | $ | 0.01 | $ | 0.21 | ||||||
| Impact on net income per share of Series A related costs | 0.02 | - | ||||||||
| Adjusted net income per share | $ | 0.03 | $ | 0.21 | ||||||
| Income from discontinued operations, net of tax | - | (0.24 | ) | |||||||
| Stock-based compensation | 0.05 | 0.04 | ||||||||
| Merger and acquisition related costs | - | 0.00 | ||||||||
| Litigation related costs | 0.00 | - | ||||||||
| Severance related costs | 0.00 | - | ||||||||
| Non-GAAP net income per share | $ | 0.09 | $ | 0.01 | ||||||
| Care.com, Inc. | |||||||||
| Supplemental Data | |||||||||
| (in thousands, except monthly average revenue per member) | |||||||||
| Period Ended | |||||||||
|
April 1, |
March 26, |
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| Total members* | 24,030 | 19,540 | |||||||
| Total families* | 13,593 | 10,954 | |||||||
| Total caregivers* | 10,437 | 8,586 | |||||||
| Paying families - US Consumer Business | 292 | 272 | |||||||
| * data is cumulative as of the end of the respective period and excludes families from discontinued operations | |||||||||
| Period Ended | |||||||||
|
April 1,
2017 |
March 26,
2016 |
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|
Monthly Average Revenue per Paying Family |
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| US Consumer Business | $ | 41 | $ | 40 | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170503005340/en/
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