Care.com (CRCM) Tops Q4 EPS by 5c, Slight Miss on Revenues

Care.com (NYSE: CRCM) reported Q4 EPS of $0.26, $0.05 better than the analyst estimate of $0.21. Revenue for the quarter came in at $49.8 million versus the consensus estimate of $49.99 million.

“2018 was a strong year for Care.com, as we continued to drive profitable growth while investing in our mobile-first consumer platform and our enterprise Care@Work business,” said Sheila Lirio Marcelo, Founder, Chairwoman and CEO of Care.com. “It was another year of continuous topline growth and net income. We also saw an expansion in EBITDA margin and a $25.8M increase in cash and short-term investments. As we look ahead, we believe that the building blocks that we put in place in 2018, along with incremental investments we have planned for 2019, will enable us to accelerate top-line growth while maintaining healthy margins.”

Financial Results

• Revenue for the fourth quarter of 2018 was $49.8 million, an increase of 13% from $44.2 million in the fourth quarter of 2017. Revenue for fiscal 2018 was $192.3 million, an increase of 10% from $174.1 million in fiscal 2017.
• Revenue attributable to the US Consumer offering totaled $37.7 million in the fourth quarter of 2018, an increase of 11% from $34.0 million in the fourth quarter of 2017. For the fiscal year, revenue attributable to the US Consumer offering totaled $148.8 million, an increase of 8% from $137.9 million in fiscal 2017.
• Revenue attributable to our Other businesses totaled $12.1 million in the fourth quarter of 2018, an increase of 18% from $10.2 million in the fourth quarter of 2017. For the fiscal year, revenue attributable to Other businesses totaled $43.5 million, an increase of 20% from $36.2 million in fiscal 2017.
• Net income was $48.5 million in the fourth quarter of 2018, compared to $7.9 million in the fourth quarter of 2017, an increase of $40.6 million. Net income for fiscal 2018 was $52.9 million, compared to $10.7 million in fiscal 2017, an increase of $42.2 million. For both the quarter and the fiscal year the significant increase was primarily attributable to the reversal of the Company’s valuation allowance related to certain net operating losses and deferred tax assets that are now expected to be realized.
• Adjusted EBITDA was $12.7 million in the fourth quarter of 2018, compared to $11.4 million in the fourth quarter of 2017, an improvement of $1.3 million. Adjusted EBITDA for fiscal 2018 was $32.2 million, compared to $23.3 million in fiscal 2017, an increase of $8.9 million.
• GAAP EPS (Diluted) was $1.23 in the fourth quarter of 2018, compared to $0.19 in the fourth quarter of 2017. Q4 GAAP EPS (Diluted) was based on 34.0 million weighted average diluted shares outstanding versus 33.1 million in the fourth quarter of 2017. GAAP EPS (Diluted) for the fiscal year was $1.29, compared to $0.22 in fiscal 2017. Q4 YTD GAAP EPS (Diluted) was based on 33.8 million weighted average diluted shares outstanding versus 32.4 million in fiscal 2017.
• Non-GAAP EPS (Diluted) was $0.26 in the fourth quarter of 2018, compared to $0.32 in the fourth quarter of 2017. Non-GAAP EPS (Diluted) for the fiscal year was $0.77, compared to $0.69 in fiscal 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, restructuring costs, and releases of valuation allowances for deferred taxes.
• The Company ended the year with $127.5 million in cash and cash equivalents and short-term investments.

Business Highlights

• Our total members grew 16% to 31.7 million at the end of the fourth quarter of 2018, compared to 27.3 million in the same period of 2017.
• Total families grew to 18.3 million at the end of the fourth quarter of 2018, an increase of 18% over the same period of 2017, and total caregivers grew to 13.4 million at the end of the fourth quarter of 2018, an increase of 14% over the same period of 2017.

For earnings history and earnings-related data on Care.com (CRCM) click here.

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