, Inc. (NYSE:CRCM) Q3 2019 Earnings Conference Call - Final Transcript

Nov 06, 2019 • 08:00 am ET

Previous, Inc. (NYSE:CRCM) Q3 2019 Earnings Conference Call - Final Transcript


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Sheila Lirio Marcelo

and thank you all for joining us on our third quarter 2019 earnings call. Q3 was another quarter of profitable growth.

Before we cover our quarter's results, I'd like to spend a moment updating you on the progress of two important strategic priorities. As we mentioned previously, the Board has retained the services of a leading executive search firm Egon Zehnder to place's next CEO, which is a top priority. We're encouraged by the caliber of the candidates we've met and are working to conclude the search expeditiously.

Additionally, we engaged Activate, a leading strategic consulting firm, we retained in June to conduct a comprehensive review of our business. In October, Activate provided our board an update of their work that began in late June, which we expect to complete this month. As part of our multi-year planning process with our board, we are having ongoing discussions regarding Activate's strategic recommendations that include priorities for our business, future growth opportunities and further efficiency gains in our operations. On our next call, we look forward to give you an update on our future plans that incorporate Activate's overall strategic recommendations.

Turning now to the quarter's results. Total revenue for the quarter grew 8% year-over-year to $53.3 million, and EBITDA for the quarter was $5.2 million. We ended the quarter with cash and short-term investments of $130 million. U.S. Consumer, which is the combination of U.S. Matching and Payments posted year-over-year revenue growth from $38.5 million in Q3 2018 to $39.5 million in Q3 2019, with 5% growth in end of period paying members.

We started to see improving results in our peak season of Q3, which is typically back-to-school preparation time for many families seeking childcare, driven by organic traffic and conversion gains. These results aligned with the most recent wave of ongoing consumer brand research, we commissioned beginning in Q1 to monitor the brand perception among the general population and specifically mothers. The latest research fielded during the quarter point to increasing positive perception and awareness of the brand among mothers in terms of trust, safety and transparency when compared to our research fielded late in Q1. We believe our ongoing investments in creating a new safety standard for our industry that we announced in May, coupled with our focus on improving our user experience across all our platforms will continue to strengthen our brand.

I also wanted to share an update regarding a few strategic initiatives we prioritize this year. First, our ongoing roll-out of CareCheck, the new background check we are implementing for caregivers, which is going well and we expect this roll-out will continue into next year. Second, our planned product enhancements, along with our shift of marketing spend toward our fastest growing vertical senior care is continuing to add to our membership growth. And third, the Q2 reorg of our product teams has led to faster execution, an initiative that have resulted in improved conversion rates as well as organic growth from SEO