According to recent market reports, traffic to restaurants in the United States is projected to grow a mere 3% this year. But there are still opportunities, and online restaurant reservation services provider OpenTable (Nasdaq:OPEN) is working to improve their offerings to capture a bigger share of this diner growth.
OpenTable’s Q4 revenues grew 16% over the year to $43 million, ahead of the Street’s target of $42.5 million. Reservation revenues grew 21% to $24.5 million, and subscription revenues grew 10% to $14.5 million. EPS of $0.46 grew 10% over the previous year to beat the market’s projections of $0.43.
By region, revenues from North America grew 13% over the year to $36.7 million. The company has a list of 19,800 restaurants on the continent enrolled. Globally, OpenTable grew their restaurant listings by 9.5% to more than 27,510 restaurants. During the quarter, OpenTable helped seat 32.8 million diners, reporting growth of 22% over the year. The number of North America diners grew 21% to 29.9 million, and international diners grew 35% to 3 million.
Fiscal 2012 revenues grew 16% over the previous year to $162 million. OpenTable’s international markets, which include the UK, Germany, and Japan, remained slow. The company reported a net loss of $9 million on international markets, compared with a loss of $11 million reported a year ago. Within the North America market, OpenTable is seeing strong growth.
For the current quarter, OpenTable projected revenues of $44.7 million-$46.1 million, with EPS of $0.39-$0.44. They expect to end the year with $186.1 million-$193.1 million in revenues and EPS of $1.79-$1.96. Analysts project revenues of $45.8 million for the quarter, with EPS of $0.46, and revenues of $189.2 million for the year, with EPS of $1.92.
OpenTable’s Mobile and Social Expansion
OpenTable is expanding their presence on social media networks. Last week, they announced the release of a new Facebook app, Places I’ve Eaten. Through the app, users will be able to share with their Facebook friends their dining histories, favorite restaurants, and wish lists. They will also be able to see their friends’ recommendations and ratings of restaurants. As part of the OpenTable integrations, friends will be able to tag each other at restaurants and make reservations through the app.
OpenTable is also focusing on general mobile expansion. They plan to improve the integration of their apps with Apple’s voice-driven personal assistant, Siri, to help improve mobile reservations in the quarters to come. Last month, they also announced the acquisition of San Francisco-based Foodspotting for an estimated $10 million. Foodspotting has developed an app that helps users find and share photos of food. Through the acquisition, OpenTable will be able to improve the visual features of their own app, making it more appealing to users.
Last quarter, they also launched a free service that provides their restaurant customers access to customizable, mobile-friendly sites. Through the service, restaurants will be able to tap into the mobile segment growth by simplifying the process of smartphone-based reservations. More than 2,000 customers have used the service since its launch, and OpenTable expects adoption rates to improve.
Their stock is trading at $58.74 with a market capitalization of $1.35 billion. It touched a 52-week high of $59.05 last week.