According to Care.com, there is a growing demand for care services by families due to the increasing presence of homes where either both parents are working or the single parent is working. The US Census Bureau estimates that such homes now account for 65% of homes in the country. According to research conducted by Care.com, US families spend nearly $243 billion in a year on babysitters, after school programs, tutors, house cleaners, pet sitters, and home-health aides. The company estimates that there are nearly 30 million households in the country that are taking care of adults.
As a result, online care destination Care.com (NYSE: CRCM) is witnessing strong growth. Third quarter revenues grew 37% over the year to $32.1 million. By segment, US Consumer Matching revenues improved 34% to $22.3 million and Payments revenue increased 34% to $3.5 million. Other revenues grew 56% to $3.8 million. Recently acquired Citrus Lane contributed $2.5 million in revenue. They ended the quarter with a non-GAAP EPS of a loss of $0.31 per share.
Among other metrics, total members grew 45% to 13.3 million. Total families grew 51% to 7.5 million and US Consumer Matching paying members grew 27% to 225,000. The quarter’s Payment members grew 26% to over 13,000. Average US monthly unique visitors grew 18% to 7.4 million and mobile devices accounted for 58% of the site visitors.
Care.com expects to end the current quarter with revenues of $33 million-$35 million and a non GAAP loss of $0.06-$0.02 per share. They project to end the year with revenues of $116 million-$118 million and a non GAAP loss of $1.07-$1.04 per share. The Street was expecting the year’s losses at $0.95 per share.
Care.com’s Extension of Services
Care.com is expanding their offerings to become a social commerce site and not just a destination to match care givers with care seekers. This summer, they announced the acquisition of social commerce site Citrus Lane for $22.9 million cash and $8.1 million in equity.
Mountain View-based Citrus Lane is a leading subscription-based social commerce service that provides access to curated products to families on a monthly basis. At the time of the acquisition, Citrus Lane had over 400,000 total members and 45,000 paying subscribers. The company had recorded revenues of $3 million last year and was looking to double their revenues during the current year. Citrus Lane focuses on products for moms, sources and reviews the products they recommend, and even encourages families to review these products. They have managed to create an engaged network with members connecting more than five times a month and have over 2 million member-generated product votes.
Care.com believes that getting into social commerce is the “natural extension” to their growth as they are able to provide the best products for families with children and leverage on the strong female membership that they already have.
They are also simplifying family care services by tying up with ride-sharing company Uber. As part of the tie-up, families in Philadelphia and D.C. will be able to benefit from the surcharge-free rides through uberFAMILY. uberFAMILY charges riders a $10 surcharge for providing transportation equipped with car seats. Through the agreement, riders in these areas will be able to forego the $10 fee.
The moves haven’t helped the company’s stock much, which has been falling since it listed earlier this year. Care.com’s stock is trading at 52-week low levels of $7.89 with a market capitalization of $248.4 million. It touched a high of $29.25 in February this year and has recovered marginally from the 52-week low levels of $7.62 it touched earlier this month.