Last week, 9-year-old Care.com (NYSE: CRCM) released its quarterly earnings report, its first with new Chief Financial Officer Michael Echenberg at the helm.The earnings report was anxiously awaited by investors who have seen the company’s stock price plummet by more than 70% since the company went public in January 2014, says the Boston Business Journal. There is some good news, though the company has a long way to go to be profitable.
In its second quarter earnings report, Care.com, the world’s largest online destination for finding and managing family care, posted consolidated revenue of $35.7 million, a 38% increase over the same period in 2014. The company sustained a $7.2 million net loss for the second quarter of 2015, compared to a $9.9 million loss in the second quarter of 2014.Sheila Lirio Marcelo, founder, chairwoman and CEO of Care.com, said this in an August 4 press release about the earnings:
“We’re excited to deliver another quarter of driving solid revenue growth while decreasing spending as we move towards our mid-year 2016 breakeven expectations. We are equally excited about new mobile and on-demand offerings that will be launching in the second half of this year, providing even greater choice, convenience and ease for our members.”
Other second quarter highlights include:
- Total members grew 40% to 16.5 million, compared to 11.8 million at the end of Q2 2014.
- Total families grew to 9.3 million, a 45% increase over Q2 2014.
- Total caregivers grew to 7.2 million, a 33% increase over Q2 2014.
- Average U.S. monthly unique visitors to Care.com were 8.2 million, a 30% increase over Q2 with 67% of the visitors coming to the site via mobile devices.
- Unpaid SEO traffic grew 38%.
After Care.com’s quarterly earnings conference call, Boston Business Journal summarized the key takeaways:
- The company is focused on cost savings, though the CFO did not define where the company would cut costs.
- com is testing prices and packages, and its volume of sign-ups decreased since that began in June. While membership is growing, only about 1.5% are paying members. Care.com needs to find its sweet spot – and fast.
- The company is forming new partnerships with companies like OpenTable and Fandango to create a date night offering for users, so parents can arrange child care at the same time they plan their dining and entertainment.
- Care.com’s Q2 results are better than Wall Street anticipated, but it has lowered its own projections for the third quarter.
Insider Take:Care.com is taking baby steps in the right direction, but we don’t know if these steps will come soon enough to put the company in a profitable position. To that end, Care.com appointed Michael Echenberg as executive vice president and chief financial officer. Echenberg was previously an executive for Weight Watchers International.To move itself forward, Care.com must cut expenses and leverage its strengths including a focus on growing paid membership and increasing mobile traffic. Its pricing and packaging strategy seems smart, but if that testing is already causing a reduction in sign-ups by volume, it needs to adapt quickly to avoid losing members.Creative packaging, like bundling date night services with partners, could be a good opportunity for Care.com to get some additional exposure while making its members’ lives easier. After all, isn’t that what we’re all looking for? An easier life at a price we can afford. If Care.com can nail that, it can rebound from its disastrous IPO.
