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

Nov 06, 2019 • 08:00 am ET

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

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Presentation
Executive
Mike Goss

to 16% compared to 18% in Q3 of 2018. And G&A as a percent of revenue for Q3 2019 was 22%, consistent with Q3 of 2018.

Moving now to EPS. For the quarter, GAAP EPS on a diluted basis was negative $0.09 as compared to positive $0.03 in the third quarter of 2018. Non-GAAP EPS was positive $0.11 as compared to positive $0.18 in the third quarter of 2018.

Regarding cash and short-term investments, we ended the quarter with a balance of approximately $130 million. Cash inflows came mainly from EBITDA. Cash outflows were primarily related to changes in working capital and the payment of acquisition-related earn-outs. The net result was the generation of approximately $5 million of cash during the quarter.

Now turning to guidance and beginning with revenue. We are narrowing and raising our full year 2019 revenue guidance $208.3 million to $208.5 million, representing approximately 8% growth versus prior at the midpoint. For the fourth quarter, our revenue guidance is $50.7 million to $50.9 million. Midpoint of our Q4 guidance is roughly unchanged relative to what was implied in our guidance on the last call. This is consistent with the revenue out-performance in Q3 being driven by non-recurring revenue streams, and with our expectation for the top line as we exit the year being mostly unchanged.

On EBITDA, our full year 2019 guidance is $21.6 million to $21.8 million, which raises the midpoint relative to our prior guidance, yielding EBITDA margin of 10% at the middle of the range. The increase in full year guidance range is driven by the over performance we experienced in Q3 which was primarily the result of the non-recurring revenue streams previously noted. We are guiding to Q4 EBITDA of $6.2 million to $6.4 million, representing margin of about 12% at the midpoint.

This EBITDA guidance flows through to our Q4 non-GAAP EPS guidance of approximately $0.17 with an expectation of roughly 40 million weighted average diluted shares outstanding. For the full year non-GAAP EPS, we are guiding to roughly $0.49, is also based on an expectation of about 40 million weighted average diluted shares outstanding.

Finally, we believe we will end 2019 with $133 million in cash and short-term investments, up from $125 million at the end of 2018 and $130 million at the end of Q3 2019. The increase of $3 million from the end of Q3 is being driven by the EBITDA flow through, partially offset by changes in working capital and consistent with the natural cadence of our business.

With that, I'll open the call up to Q&A. Operator?