Care.com, Inc. (NYSE:CRCM) Q2 2018 Earnings Conference Call - Final Transcript
Jul 30, 2018 • 08:00 am ET
Greetings, and welcome to Care.com's Second Quarter 2018 Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I'd now like to turn the conference over to Mike Goss, Vice President of Finance. Please go ahead, sir.
Thank you. Good morning, and welcome to Care.com's financial results call for the second quarter ended June 30, 2018.
(Forward-looking Cautionary Statements) We will also be referring to non-GAAP measures on this call, including adjusted EBITDA, which we refer to as EBITDA throughout this presentation. This measure represents pretax net income or loss from continuing operations, excluding the accretion of preferred stock dividends less depreciation and amortization, as well as certain other unusual expenses and noncash adjustments, such as stock-based compensation, M&A and restructuring costs.
We also refer to non-GAAP EPS, which represents net income or loss less certain unusual or noncash expenses, such as stock comp, M&A and restructuring costs. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. Reconciliation to the most directly comparable GAAP financial measures are provided in the tables in the press release and Form 10-Q, to be filed.
We will also be referring to profitability on this call. When we refer to profitability, we're referring to it on an adjusted EBITDA basis, unless otherwise noted.
Today's call is available via webcast and telephone replay will be available for 1 week following the conclusion of the call. To access the press release, supplemental and financial information or the webcast replay, please consult the IR website.
With that, let me turn the call over to Sheila Lirio Marcelo, Founder, Chairwoman and CEO of Care.com.
Sheila Lirio Marcelo
Thank you, Mike. Good morning, and thank you to everyone for joining us. Q2 was another quarter of profitable growth and healthy cash generation for us as we continue to help build a critical global care infrastructure that provides accessible, affordable care options for families while assisting providers with finding sustainable caregiving job. We continue to see good progress in our business in the context of our strategic focus, to drive long-term growth and further reinforce our leadership position, capitalize on our brand recognition, improve our ability to capture an outsized share of our large addressable market and do so as we improve the profitability profile of the company.
Now turning to our Q2 financial highlights. Total revenue was $46 million, growing 10% versus the second quarter of 2017 and in line with expectations. Q2 EBITDA of $5.9 million exceeded our guidance.
Our ongoing commitment to improve profitability resulted in EBITDA margins of 12.9% versus prior year of 6.2%, with sales and marketing leverage as the primary driver. The continued profitability in our business flowed through to healthy cash flow generation, taking cash and equivalents up about $7 million, to $114 million at the end of Q2.
Starting with our U.S. consumer business, we saw end of period paying member growth of 10% versus prior, in line with expectation and consistent with previous quarters. We are achieving this end of