Care.com FY18 EPS Guidance Below Consensus

Care.com (NYSE: CRCM) reported Q2 EPS of $0.14, $0.03 better than the analyst estimate of $0.11. Revenue for the quarter came in at $46 million versus the consensus estimate of $45.93 million.

“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.

GUIDANCE:

Care.com sees FY2018 EPS of $0.65-$0.67, versus the consensus of $0.68. Care.com sees FY2018 revenue of $191.5-193 million, versus the consensus of $192.16 million.

https://bit.ly/2v1ODhs