Rover Group, Inc. (“Rover” or the “Company”) (NASDAQ: ROVR), the
world’s largest online marketplace for pet care, today announced
financial results for the third quarter ended September 30, 2023.
“We had an outstanding third quarter with 30%
revenue growth, net income of $10.5 million and Adjusted EBITDA of
$17.5 million,” said Rover co-founder and CEO, Aaron Easterly. “It
was exciting to see step function progress toward our long-term
operating margins. We continue to build on our priorities of
driving operating leverage in the business, increasing new customer
bookings, expanding revenue from our non-U.S. markets and improving
our product offering. Our strong performance is a testament to the
fundamental power of our business model, market position, and
team.”
Third Quarter 2023 Highlights:
- Revenue increased
30% to $66.2 million, compared to $50.9 million in Q3 2022
- GBV grew 25% to
$266.4 million, compared to $213.7 million in Q3 2022
- Total bookings
increased 20% to 1.8 million, compared to 1.5 million in Q3 2022.
New bookings increased 8% to 290,000, compared to 267,000 in Q3
2022. Repeat bookings increased 23% to 1.5 million, compared to 1.2
million in Q3 2022
- GAAP net income and
net income margin were $10.5 million and 16%, compared to a GAAP
net loss and net loss margin of $15.5 million and 30% in Q3
2022
- Adjusted EBITDA and
Adjusted EBITDA margin were $17.5 million and 26%, compared to
$10.2 million and 20% in Q3 2022
Outlook
“We produced strong top and bottom line results
in the quarter, while delivering operating leverage and investing
in product enhancements to drive bookings,” said Rover CFO, Charlie
Wickers. “As a result of our performance, we are increasing our
revenue and Adjusted EBITDA guidance for the year. Further, given
the strength of our multi-year cash generation potential, and the
optionality our cash balance allows for growth, the board has
authorized a refreshed and increased share repurchase program.”
Fourth Quarter 2023
- Revenue
- Rover anticipates
revenue in the range of $64 - $66 million, a year-over-year
increase of 25% at the midpoint of the projected range.
- Adjusted EBITDA
- Rover anticipates
Adjusted EBITDA in the range of $17 - $19 million, a 28% margin at
the midpoint of the projected range.
Raised Full Year 2023
- Revenue
- Rover anticipates
revenue in the range of $230 - $232 million, a year-over-year
increase of 33% at the midpoint of the projected range.
- Adjusted EBITDA
- Rover anticipates
Adjusted EBITDA in the range of $46 - $48 million, a 20% margin at
the midpoint of the projected range.
Both the low and high ends of guidance
incorporate a moderated impact of macroeconomic headwinds compared
to guidance provided in August 2023. The updated guidance range
also incorporates a full year of normalized marketing expenses and
operating costs compared to a partial year of each in 2022.
In reliance on the exception provided by Item
10(e)(1)(i)(B) of Regulation S-K, Rover has not provided the most
directly comparable forward-looking GAAP measure to its Adjusted
EBITDA and Adjusted EBITDA margin guidance or a reconciliation of
these forward-looking non-GAAP financial measures to their most
directly comparable GAAP measure as a result of the uncertainty
regarding, and the potential variability of, reconciling items such
as stock-based compensation, income tax, change in fair value, and
gain or loss from equity method investments. For example, the
non-GAAP adjustment for stock-based compensation expense requires
additional inputs such as number of shares granted and market price
that are not currently ascertainable. Accordingly, a reconciliation
of these forward-looking non-GAAP metrics to their corresponding
GAAP equivalent is not available without unreasonable effort.
Because these adjustments are inherently variable and uncertain and
depend on various factors that are beyond Rover's control, Rover is
also unable to predict their probable significance. For more
information regarding the non-GAAP financial measures discussed in
this earnings release, please see "Non-GAAP Financial Measures"
below.
Share Repurchase Program
From commencement of purchasing shares in
mid-March through November 1, 2023, Rover repurchased approximately
9.1 million shares for an aggregate amount of approximately $49
million (excluding brokers' commissions and excise tax), including
approximately 3.5 million shares repurchased for an aggregate
amount of approximately $20.4 million (excluding brokers'
commissions and excise tax) during the three months ended September
30, 2023.
Rover also announced that its board of directors
has approved an extension of its previously announced share
repurchase program to run through February 28, 2025 and an increase
to the total authorized amount under the program of up to $100
million resulting in a total authorized amount of up to $150
million (exclusive of brokers’ commissions and excise tax) of its
Class A common stock, including the $49 million repurchased through
November 1, 2023.
Repurchases of the Class A common stock may be
made on a discretionary basis from time to time through open market
transactions (including through Rule 10b5-1 trading plans) or
through privately negotiated transactions in accordance with market
conditions and applicable securities laws and other legal
requirements, including the requirements of Rule 10b-18 under the
Securities Exchange Act of 1934, as amended. The repurchase program
does not obligate Rover to acquire any specific number of shares of
its Class A common stock. The timing, volume, purchase price and
nature of repurchases will be determined by Rover’s management and
depend on a variety of factors, including stock price, trading
volume, market and economic conditions, other general business
considerations such as alternative investment opportunities,
applicable legal requirements and tax laws, and other relevant
factors. Repurchases under the program have been authorized through
February 28, 2025, but the program may be modified, suspended, or
terminated at any time at the discretion of Rover's board of
directors.
Rover expects to fund the repurchases with cash
and cash equivalents and investments. As of September 30, 2023,
Rover had cash and cash equivalents and investments of
approximately $230.8 million.
About Rover
Founded in 2011 and based in Seattle, Rover
(NASDAQ: ROVR) is the world’s largest online marketplace for pet
care. Rover connects pet parents with pet care providers who offer
overnight services, including boarding and in-home pet sitting, as
well as daytime services, including doggy daycare, dog walking, and
drop-in visits. To learn more about Rover, please visit
https://www.rover.com.
Conference Call and Webcast
Information
Rover will host a conference call today at 1:30
p.m. PT (4:30 p.m. ET) to discuss its third quarter 2023 financial
results and provide commentary on business performance. The
conference call may be accessed by registering at the following
link:
https://register.vevent.com/register/BIb78a8cd5292541eead50a01197c618f4.
Once registered, you will be provided with a dial-in and conference
ID.
The call will contain forward-looking statements
and other material information regarding Rover’s financial and
operating results and may include material business, financial or
other information that is not contained in this earnings press
release.
The live webcast and this earnings press release
can be accessed from Rover’s investor relations website at
https://investors.rover.com/, along with an Investor Presentation
and Non-GAAP Reconciliation Supplement posted under the “News &
Events - Presentations” section of the same website address. A
webcast replay will be available at the same website address
shortly after the conclusion of the live event and will be
accessible for at least 90 days.
Available Information
Rover announces material information to the
public about the Company, its products and services and other
matters through a variety of means, including filings with the U.S.
Securities and Exchange Commission ("SEC"), press releases, public
conference calls, webcasts, its website (www.rover.com), and its
Investor Relations website (https://investors.rover.com). Rover
uses these channels, as well as social media, including its X
(formally known as Twitter) account (@RoverDotCom), its LinkedIn
account (https://www.linkedin.com/company/roverdotcom/), and its
YouTube page (https://www.youtube.com/roverdotcom), to communicate
with investors and the public news and developments about Rover and
other matters and in order to achieve broad, non-exclusionary
distribution of information to the public and for complying with
its disclosure obligations under Regulation FD. Rover encourages
investors, the media, and others interested in the Company to
review the information it makes public in these locations, as such
information could be deemed to be material information.
Forward-Looking Statements
This press release and the earnings call
referenced in this press release contains “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995, which involve
substantial risks and uncertainties. These forward-looking
statements include, but are not limited to: Rover’s expectations or
predictions of future financial, operational or business
performance or conditions, including guidance and projections for
the fourth quarter of 2023 and full year 2023, cash generation and
long-term targets, future growth, profitability, operating
leverage, and margin expectations, marketing and operating expense
expectations, and future impacts of product improvements and
marketing investments; growth and expansion opportunities outside
the United States; expected customer lifetime value trends;
customer acquisition and customer experience goals; product
portfolio expansion and improvements; macroeconomic, public health,
pet care industry, residential real estate and travel trends and
outlooks, including the anticipated timing of any recession; and
Rover's intention to implement a program to purchase up to an
aggregate of $150 million of its Class A common stock.
Forward-looking statements include all statements that are not
historical facts and can be identified by terms such as "believe,"
"may," "will," "continue," "anticipate," "target," "potential,"
"forecast," "assume," "expect," "would," "project," "focus,"
"increase," "deliver," "drive," "achieve," "sustain," "improve,"
"expand," "further," "remain," "outlook," or similar expressions
and the negatives of those terms. Forward-looking statements are
subject to known and unknown risks and uncertainties and are based
on potentially inaccurate assumptions that could cause actual
results to differ materially from those expected or implied by the
forward-looking statements. Actual results may differ materially
from the results predicted and reported results should not be
considered as an indication of future performance.
The potential risks and uncertainties that could
cause actual results to differ from the results predicted include,
among others, (1) general macroeconomic and geopolitical
conditions, including public health, pet care industry, residential
real estate, and travel expectations, factors and trends, and their
impact on consumer spending patterns, demand for and pricing on the
Rover platform, and Rover's business, operating results and
financial condition, (2) Rover's ability to retain existing and
acquire new pet parents and pet care providers, (3) Rover's
expectations about, its ability to successfully defend, and the
outcome of, any known and unknown litigation and regulatory
proceedings, (4) Rover's expectations regarding its future
operating and financial performance, (5) the strength of Rover's
network, effectiveness of its technology, and quality of the
offerings provided through the Rover platform, (6) Rover's
opportunities and strategies for growth, including investments and
improvements, new offerings, partnerships, distribution channels,
acquisitions and international markets, (7) the success of Rover's
marketing strategies and investments, (8) investments in new
products, initiatives and offerings and new geographies, market
effects thereof, and the effect of these investments on Rover's
results of operations, (9) Rover's inability to entirely prevent
off-platform bookings and payments, (10) the impact of tax
information reporting requirements on pet care provider retention
and off-platform bookings and payments, (11) Rover's ability to
match pet parents with high quality and well-priced offerings, (12)
assessment of Rover's trust and safety practices, (13) Rover's
assessment of and strategies to compete with existing and new
competitors in existing and new markets and offerings, (14) Rover's
ability to maintain the security and availability of its platform,
(15) Rover's reliance on third party payment service providers,
mobile operating systems and application marketplaces, (16) Rover's
ability to protect its intellectual property, (17) Rover's ability
to identify, recruit, and retain skilled personnel, including key
members of senior management, (18) seasonal fluctuations in
operating and financial results, (18) legal and regulatory
developments and Rover's ability to stay in compliance with laws
and regulations, (19) Rover's ability to maintain and protect its
brand and reputation, (20) Rover's ability to effectively manage
its growth and maintain its corporate culture, and (21) Rover's
ability to execute the repurchase program which is dependent on,
among other things, developments or changes in economic or market
conditions and the securities markets, fluctuations in the trading
volume and market price of the Class A common stock, the effects of
macroeconomic conditions, Rover's cash commitments, the nature of
other acquisition or investment opportunities, Rover's cash flows
from operations, and other factors. For additional information on
other potential risks and uncertainties that could cause actual
results to differ from the results predicted, please see those
risks and uncertainties contained in Rover's filings with the U.S.
Securities and Exchange Commission (“SEC”), including under the
captions "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and elsewhere in
Rover’s Annual Report on Form 10-K for the year ended December 31,
2022 and Quarterly Reports on Form 10-Q for the quarters ended June
30, 2023 and September 30, 2023. Additional factors that could
cause actual results to differ materially from those expressed or
implied in forward-looking statements can be found in Rover’s other
filings with the SEC which are available, free of charge, on the
SEC’s website at www.sec.gov and on the Investor Relations page of
Rover’s website at https://investors.rover.com/.
Investors are cautioned not to place undue
reliance on the forward-looking statements. All information
provided in this earnings press release and in the attachments is
as of the date hereof and is based on then-current expectations,
estimates, forecasts, and projections and the beliefs and
assumptions of management. We undertake no duty to update this
information unless required by law.
The information that can be accessed through
hyperlinks or website addresses included in this press release is
deemed not to be incorporated in or part of this press release.
Definitions
- A booking is
defined as a single arrangement between a pet parent and pet care
provider on the Rover services marketplace, prior to cancellations,
which can be for a single night or multiple nights for overnight
services, or for a single walk/day/drop-in or multiple
walks/days/drop-ins for daytime services. New bookings is defined
as the total number of first-time bookings that new users, which
Rover refers to as pet parents, book on our platform in a period.
Repeat bookings are defined as the total number of bookings from
pet parents who have ever had a previous booking on Rover,
inclusive of pet parents who had their first booking within the
same quarter.
- Gross Booking
Value, or GBV, represents the dollar value of bookings on the Rover
services marketplace during a period, prior to cancellations, and
is inclusive of pet care provider earnings, service fees, add-ons,
taxes, and alterations, and is exclusive of tips and Rover's other
ancillary revenue streams.
Non-GAAP Financial Measures
To supplement Rover's condensed consolidated
financial statements prepared and presented in accordance with U.S.
generally accepted accounting principles, or GAAP, Rover uses
non-GAAP financial measures in this earnings press release and/or
its related earnings call, including Adjusted EBITDA, Adjusted
EBITDA margin, Contribution, Contribution margin, and non-GAAP
operating expenses (collectively, the “Non-GAAP Financial
Measures”), each as defined below. A reconciliation of the
historical Non-GAAP Financial Measures to their most directly
comparable historical GAAP financial measures is presented in
tabular form at the end of this earnings press release immediately
following the GAAP financial statements. The Non-GAAP Financial
Measures are supplemental measures of Rover's performance that are
neither required by, nor presented in accordance with, GAAP. The
Non-GAAP Financial Measures have limitations as an analytical tool,
which limitations are described below, and you should not consider
them in isolation, or as a substitute for, GAAP financial
measures.
Rover uses the Non-GAAP Financial Measures to
evaluate the health of its business, measure its operating
performance, identify trends, prepare financial forecasts and make
strategic decisions, including those related to operating expenses,
as a means to evaluate period-to-period comparisons, and determine
incentive compensation. Rover considers the Non-GAAP Financial
Measures to be important measures because they help illustrate
underlying trends in its business and its historical operating
performance on a more consistent basis.
Rover believes that these Non-GAAP Financial
Measures, when taken together with their corresponding comparable
GAAP financial measure, provide meaningful supplemental information
to investors as they provide a basis for period-to-period
comparisons of Rover's business by excluding the effect of certain
non-cash and cash gains, expenses, losses and variable charges that
may not be indicative of its recurring core business, results of
operations, or outlook. Rover believes these Non-GAAP Financial
Measures are useful to investors because they (1) allow for greater
transparency with respect to key metrics used by management in its
financial, operational and strategic decision-making and in
assessing the health of Rover's business and operating performance,
(2) are used by Rover's institutional investors and the analyst
community to help them analyze the health of Rover's business, (3)
allow investors and others to understand and evaluate Rover's
operating results in the same manner as Rover's management and
board of directors, and (4) provide a reasonable basis for
comparing Rover's ongoing results of operations and those of other
companies.
Examples of the limitations of the Non-GAAP
Financial Measures include:
- Adjusted EBITDA
excludes certain recurring, non-cash charges, such as depreciation
of property and equipment and amortization of intangible assets
including amortization related to capitalized internal use
software. Although these are non-cash charges, the assets being
depreciated and amortized may have to be replaced in the future,
and Adjusted EBITDA does not reflect changes in, or cash
requirements for, Rover's working capital needs;
- Adjusted EBITDA
excludes certain restructuring and acquisition and merger-related
charges, some or all of which may be settled in cash;
- Adjusted EBITDA and
non-GAAP operating expenses exclude stock-based compensation
expense, which has been, and will continue to be for the
foreseeable future, a significant recurring non-cash expense in
Rover's business as it grows as a company and an important part of
its compensation strategy;
- Adjusted EBITDA
does not reflect the components of other income (expense), net,
which consists primarily of realized and unrealized gains and
losses on foreign currency transactions, realized gains and losses
from the change in fair value of investments and financial
instruments and sales of such investments, and for the nine months
ended September 30, 2023 a $1.9 million employee retention
credit;
- Adjusted EBITDA
does not reflect period-to-period changes in taxes, income tax
expense or the cash necessary to pay income taxes;
- Adjusted EBITDA and
non-GAAP general and administrative expense exclude certain legal
settlements that may reduce cash available to Rover;
- Adjusted EBITDA
does not consider the impact of goodwill and intangible asset
impairments;
- these measures
exclude significant expenses and income that are required by GAAP
to be recorded in Rover's financial statements;
- these measures are
subject to inherent limitations as they reflect the exercise of
judgments by management about which expense and income are excluded
or included in determining these Non-GAAP Financial Measures;
and
- Rover's calculation
of these Non-GAAP Financial Measures may differ from similarly
titled non-GAAP financial measures, if any, reported by Rover's
peer companies, or those peer companies may use other measures to
calculate their financial performance, and therefore Rover's use of
the Non-GAAP Financial Measures may not be directly comparable to
similarly titled measures of other companies.
To compensate for these limitations, management
presents the Non-GAAP Financial Measures in conjunction with GAAP
results. Rover encourages investors and others to review its
financial information in its entirety, not to rely on any single
financial measure, and to view the Non-GAAP Financial Measures in
conjunction with their respective related GAAP financial measures.
In addition, such financial information is unaudited and does not
conform to SEC Regulation S-X and as a result such information may
be presented differently in Rover's future earnings releases and
filings with the SEC.
The Non-GAAP Financial Measures are not
indicative of Rover's overall results, an indicator of past or
future financial performance, a financial measure of total company
profitability, and are not intended to be used as a proxy for total
company profitability nor imply profitability for Rover's business.
Also, in the future Rover may incur expenses or charges such as
those being adjusted in the calculation of these Non-GAAP Financial
Measures. Rover's presentation of these Non-GAAP Financial Measures
should not be construed as an inference that future results will be
unaffected by unusual or nonrecurring items.
Rover defines Adjusted EBITDA as net income
(loss) excluding depreciation and amortization (including
amortization expense related to capitalized internal use software),
stock-based compensation expense, interest expense, interest
income, change in fair value, net, other income (expense), net,
income tax expense or benefit, certain acquisition and
merger-related costs, gain or loss from equity method investments,
net of tax, and non-routine items such as goodwill and intangible
asset or investment impairment (if any), restructuring costs (if
any), transaction-related expenses (if any), and certain legal
settlements (if any). Certain legal settlements refers to
settlements or other accruals arising from any significant legal
proceedings related to worker classification matters. These matters
have limited precedent, cover extended historical periods and are
unpredictable in both magnitude and timing and are therefore
distinct from normal, recurring legal matters and related expenses
incurred in Rover's ongoing operating performance. Adjusted EBITDA
margin as presented in the reconciliation table below is Adjusted
EBITDA for a period divided by revenue for the same period.
Beginning with the three months ended June 30,
2023, Rover redefined Adjusted EBITDA to omit the impact of a $6.9
million impairment loss on intangible assets and goodwill and to
reflect the impact of a $1.9 million employee retention credit
that was recorded within other income (expense), net on the
condensed consolidated statements of operations for the three
months ended June 30, 2023 and the nine months ended September 30,
2023. Rover did not have any impairment loss on intangible assets
and goodwill or record any employee retention credit during the
nine months ended September 30, 2022. Rover believes the
adjustments described above are not indicative of its core
operating performance and are useful to investors by enabling them
to better assess its operating performance in the context of
current period results and provide for better comparability with
its historically disclosed Adjusted EBITDA amounts.
Rover defines Contribution as gross profit
(loss) plus amortization of intangible assets and amortization of
internally developed software included in cost of revenue
(exclusive of depreciation and amortization shown separately).
Gross profit (loss) is defined as revenue less cost of revenue
(exclusive of depreciation and amortization shown separately) and
amortization of intangible assets. Gross profit margin is
calculated by dividing gross profit (loss) for a period by revenue
for the same period. Contribution margin is calculated by dividing
Contribution for a period by revenue for the same period.
GAAP operating expenses consist of operations
and support expense, marketing expense, product and development
expense, and general and administrative expense. Rover defines
Non-GAAP operating expenses as GAAP operating expenses excluding
the non-cash expenses arising from the grant of stock-based awards,
and in the case of non-GAAP general and administrative expense,
excluding certain legal settlements (if any). Certain legal
settlements refers to settlements or other accruals arising from
any significant legal proceedings related to worker classification
matters. These matters have limited precedent, cover extended
historical periods and are unpredictable in both magnitude and
timing and are therefore distinct from normal, recurring legal
matters and related expenses incurred in Rover's ongoing operating
performance. These non-GAAP operating expenses are also presented
as a percentage of revenue, which is calculated by dividing the
specific non-GAAP operating expense for a period by revenue for the
same period.
|
ROVER GROUP, INC.Key Business
Metrics(Bookings and users in thousands, GBV
dollars in millions, ABV and per-user metrics in units)
(unaudited) |
|
|
Three Months EndedSeptember
30, |
|
|
Nine Months EndedSeptember
30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Bookings |
|
|
|
|
|
|
|
New Bookings |
|
290 |
|
|
|
267 |
|
|
|
776 |
|
|
|
706 |
|
Repeat Bookings |
|
1,517 |
|
|
|
1,234 |
|
|
|
4,244 |
|
|
|
3,406 |
|
Total Bookings |
|
1,807 |
|
|
|
1,501 |
|
|
|
5,020 |
|
|
|
4,112 |
|
GBV |
$ |
266.4 |
|
|
$ |
213.7 |
|
|
$ |
742.0 |
|
|
$ |
580.3 |
|
ABV(1) |
$ |
147 |
|
|
$ |
142 |
|
|
$ |
148 |
|
|
$ |
141 |
|
|
|
|
|
|
|
|
|
Total active users(2) |
|
844 |
|
|
|
718 |
|
|
|
1,584 |
|
|
|
1,346 |
|
GBV per user |
$ |
316 |
|
|
$ |
298 |
|
|
$ |
468 |
|
|
$ |
431 |
|
|
|
|
|
|
|
|
|
Recognized take rate(3) |
|
23.6 |
% |
|
|
22.4 |
% |
|
|
23.4 |
% |
|
|
22.1 |
% |
Cancellation rate(4) |
|
13.3 |
% |
|
|
14.2 |
% |
|
|
12.6 |
% |
|
|
13.8 |
% |
(1) ABV, or average booking value,
defined as GBV divided by Total bookings.(2) Active user
defined as unique pet owner with at least one booking in
period.(3) Recognized take rate defined as (Revenue +
change in Deferred revenue) divided by
GBV.(4) Cancellation rate defined as Cancelled bookings
value divided by GBV.
|
ROVER GROUP, INC.Condensed Consolidated
Statements of Operations(in thousands, except for
per share data) (unaudited) |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
66,203 |
|
|
$ |
50,864 |
|
|
$ |
165,852 |
|
|
$ |
122,059 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization shown
separately below) |
|
13,634 |
|
|
|
11,607 |
|
|
|
37,022 |
|
|
|
29,976 |
|
Operations and support |
|
8,156 |
|
|
|
7,425 |
|
|
|
22,985 |
|
|
|
19,265 |
|
Marketing |
|
12,684 |
|
|
|
8,686 |
|
|
|
35,401 |
|
|
|
27,044 |
|
Product development |
|
8,566 |
|
|
|
7,100 |
|
|
|
24,164 |
|
|
|
20,380 |
|
General and administrative |
|
13,599 |
|
|
|
30,599 |
|
|
|
39,640 |
|
|
|
53,616 |
|
Depreciation and amortization |
|
1,189 |
|
|
|
1,561 |
|
|
|
4,143 |
|
|
|
4,432 |
|
Impairment loss on intangible assets and goodwill |
|
— |
|
|
|
— |
|
|
|
6,916 |
|
|
|
— |
|
Total costs and expenses |
|
57,828 |
|
|
|
66,978 |
|
|
|
170,271 |
|
|
|
154,713 |
|
Income (loss) from operations |
|
8,375 |
|
|
|
(16,114 |
) |
|
|
(4,419 |
) |
|
|
(32,654 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
Interest income |
|
3,152 |
|
|
|
1,287 |
|
|
|
8,566 |
|
|
|
2,084 |
|
Interest expense |
|
(15 |
) |
|
|
(19 |
) |
|
|
(51 |
) |
|
|
(61 |
) |
Change in fair value of other investments |
|
— |
|
|
|
— |
|
|
|
1,115 |
|
|
|
— |
|
Change in fair value of derivative warrant liabilities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,579 |
|
Other (expense) income, net |
|
(568 |
) |
|
|
(257 |
) |
|
|
1,560 |
|
|
|
(1,045 |
) |
Total other income (expense), net |
|
2,569 |
|
|
|
1,011 |
|
|
|
11,190 |
|
|
|
5,557 |
|
Income (loss) before income taxes and equity method
investments |
|
10,944 |
|
|
|
(15,103 |
) |
|
|
6,771 |
|
|
|
(27,097 |
) |
(Provision for) benefit from income taxes |
|
(128 |
) |
|
|
(44 |
) |
|
|
(199 |
) |
|
|
172 |
|
Loss from equity method investments, net of tax |
|
(316 |
) |
|
|
(325 |
) |
|
|
(981 |
) |
|
|
(325 |
) |
Net income (loss) |
$ |
10,500 |
|
|
$ |
(15,472 |
) |
|
$ |
5,591 |
|
|
$ |
(27,250 |
) |
Net income (loss) per share attributable to common
stockholders: |
|
|
|
|
|
|
|
Basic |
$ |
0.06 |
|
|
$ |
(0.08 |
) |
|
$ |
0.03 |
|
|
$ |
(0.15 |
) |
Diluted |
$ |
0.05 |
|
|
$ |
(0.08 |
) |
|
$ |
0.03 |
|
|
$ |
(0.15 |
) |
Weighted-average shares used in computing net income (loss) per
share attributable to common stockholders: |
|
|
|
|
|
|
|
Basic |
|
181,423 |
|
|
|
182,493 |
|
|
|
183,126 |
|
|
|
181,309 |
|
Diluted |
|
192,977 |
|
|
|
182,493 |
|
|
|
193,704 |
|
|
|
181,309 |
|
|
ROVER GROUP, INC.Condensed Consolidated
Balance Sheets (in thousands, except for per share
data) (unaudited) |
|
|
September 30,2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
129,142 |
|
|
$ |
58,875 |
|
Short-term investments |
|
74,822 |
|
|
|
191,347 |
|
Accounts receivable, net |
|
76,473 |
|
|
|
53,181 |
|
Notes receivable from related parties |
|
— |
|
|
|
1,810 |
|
Prepaid expenses and other current assets |
|
7,868 |
|
|
|
6,829 |
|
Total current assets |
|
288,305 |
|
|
|
312,042 |
|
Restricted cash |
|
3,675 |
|
|
|
— |
|
Property and equipment, net |
|
19,261 |
|
|
|
19,518 |
|
Operating lease right-of-use assets |
|
17,211 |
|
|
|
18,871 |
|
Intangible assets, net |
|
2,511 |
|
|
|
6,865 |
|
Goodwill |
|
33,159 |
|
|
|
36,915 |
|
Deferred tax asset, net |
|
1,361 |
|
|
|
1,306 |
|
Long-term investments |
|
26,918 |
|
|
|
22,463 |
|
Investment in equity securities in related parties |
|
3,444 |
|
|
|
— |
|
Other noncurrent assets |
|
1,045 |
|
|
|
281 |
|
Total assets |
$ |
396,890 |
|
|
$ |
418,261 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
5,914 |
|
|
$ |
5,354 |
|
Accrued compensation and related expenses |
|
6,239 |
|
|
|
6,644 |
|
Accrued expenses and other current liabilities |
|
6,491 |
|
|
|
22,694 |
|
Deferred revenue |
|
13,112 |
|
|
|
5,544 |
|
Pet parent deposits |
|
50,195 |
|
|
|
40,783 |
|
Pet care provider liabilities |
|
2,155 |
|
|
|
3,319 |
|
Operating lease liabilities, current portion |
|
2,613 |
|
|
|
2,727 |
|
Total current liabilities |
|
86,719 |
|
|
|
87,065 |
|
Operating lease liabilities, net of current portion |
|
19,943 |
|
|
|
22,208 |
|
Other noncurrent liabilities |
|
409 |
|
|
|
714 |
|
Total liabilities |
|
107,071 |
|
|
|
109,987 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value, 10,000 shares authorized as of
September 30, 2023 and December 31, 2022; no shares
issued and outstanding as of September 30, 2023 and
December 31, 2022 |
|
— |
|
|
|
— |
|
Class A common stock, $0.0001 par value, 990,000 shares authorized
as of September 30, 2023 and December 31, 2022; 180,836
and 184,526 shares issued and outstanding as of September 30,
2023 and December 31, 2022, respectively |
|
18 |
|
|
|
18 |
|
Additional paid-in capital |
|
667,007 |
|
|
|
651,659 |
|
Accumulated other comprehensive loss |
|
(157 |
) |
|
|
(1,098 |
) |
Accumulated deficit |
|
(377,049 |
) |
|
|
(342,305 |
) |
Total stockholders’ equity |
|
289,819 |
|
|
|
308,274 |
|
Total liabilities and stockholders’ equity |
$ |
396,890 |
|
|
$ |
418,261 |
|
|
ROVER GROUP, INC.Condensed Consolidated
Statements of Cash Flows(in thousands)
(unaudited) |
|
|
Nine Months EndedSeptember
30, |
|
|
2023 |
|
|
|
2022 |
|
OPERATING ACTIVITIES |
|
|
|
Net income (loss) |
$ |
5,591 |
|
|
$ |
(27,250 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: |
|
|
|
Stock-based compensation |
|
16,436 |
|
|
|
14,025 |
|
Depreciation and amortization |
|
9,642 |
|
|
|
9,634 |
|
Non-cash operating lease costs |
|
1,659 |
|
|
|
2,065 |
|
Impairment loss on intangible assets and goodwill |
|
6,916 |
|
|
|
— |
|
Change in fair value of other investments |
|
(1,115 |
) |
|
|
— |
|
Change in fair value of derivative warrant liabilities |
|
— |
|
|
|
(4,579 |
) |
Net accretion of investment discounts |
|
(2,896 |
) |
|
|
(523 |
) |
Deferred income taxes |
|
(45 |
) |
|
|
(225 |
) |
Loss on disposal of property and equipment |
|
102 |
|
|
|
30 |
|
Loss from equity method investments |
|
981 |
|
|
|
325 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(23,292 |
) |
|
|
(23,480 |
) |
Prepaid expenses and other current assets |
|
(1,039 |
) |
|
|
(753 |
) |
Other noncurrent assets |
|
(764 |
) |
|
|
(10 |
) |
Accounts payable |
|
560 |
|
|
|
(373 |
) |
Accrued expenses and other current liabilities |
|
(16,796 |
) |
|
|
17,799 |
|
Deferred revenue and pet parent deposits |
|
16,980 |
|
|
|
16,807 |
|
Pet care provider liabilities |
|
(1,164 |
) |
|
|
(7,104 |
) |
Operating lease liabilities |
|
(2,379 |
) |
|
|
(2,358 |
) |
Other noncurrent liabilities |
|
(305 |
) |
|
|
132 |
|
Net cash provided by (used in) operating activities |
|
9,072 |
|
|
|
(5,838 |
) |
INVESTING ACTIVITIES |
|
|
|
Purchases of property and equipment |
|
(550 |
) |
|
|
(443 |
) |
Capitalization of internal-use software |
|
(6,288 |
) |
|
|
(5,751 |
) |
Proceeds from disposal of property and equipment |
|
— |
|
|
|
2 |
|
Acquisition of businesses, net of cash acquired |
|
— |
|
|
|
(5,711 |
) |
Purchases of convertible notes |
|
— |
|
|
|
(1,310 |
) |
Purchases of equity securities in related parties |
|
(1,500 |
) |
|
|
— |
|
Purchases of available-for-sale securities |
|
(112,035 |
) |
|
|
(252,282 |
) |
Proceeds from sales of available-for-sale securities |
|
57,775 |
|
|
|
— |
|
Maturities of available-for-sale securities |
|
170,153 |
|
|
|
55,383 |
|
Net cash provided by (used in) investing activities |
|
107,555 |
|
|
|
(210,112 |
) |
FINANCING ACTIVITIES |
|
|
|
Proceeds from exercise of stock options and issuance of common
stock |
|
3,930 |
|
|
|
4,972 |
|
Redemption of common stock warrants |
|
— |
|
|
|
(7 |
) |
Repurchases of common stock |
|
(40,136 |
) |
|
|
— |
|
Taxes paid related to settlement of equity awards |
|
(6,474 |
) |
|
|
(2,224 |
) |
Proceeds from reverse recapitalization and related financing |
|
— |
|
|
|
— |
|
Payment of deferred transaction costs related to reverse
recapitalization |
|
— |
|
|
|
— |
|
Repayment of borrowings on credit facilities |
|
— |
|
|
|
— |
|
Net cash (used in) provided by financing activities |
|
(42,680 |
) |
|
|
2,741 |
|
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
(5 |
) |
|
|
(177 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted
cash |
|
73,942 |
|
|
|
(213,386 |
) |
Cash, cash equivalents, and restricted cash, beginning of
period |
|
58,875 |
|
|
|
278,904 |
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
132,817 |
|
|
$ |
65,518 |
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION |
|
|
|
Cash paid for income taxes |
$ |
550 |
|
|
$ |
45 |
|
Cash paid for interest |
|
4 |
|
|
|
7 |
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
Purchase of property and equipment in accounts payable and accrued
liabilities |
|
— |
|
|
|
138 |
|
Right-of-use asset obtained in exchange for lease liabilities |
|
— |
|
|
|
16 |
|
Conversion of promissory notes to equity security investment in
related parties |
|
2,345 |
|
|
|
— |
|
Reclassification of certain derivative warrant liabilities to
equity upon exercise |
|
— |
|
|
|
15,356 |
|
Recognition of indemnity holdback liabilities upon acquisition of
businesses |
|
— |
|
|
|
1,563 |
|
Stock-based compensation capitalized to internal-use software |
|
1,459 |
|
|
|
773 |
|
Reconciliation of Cash, Cash Equivalents, and Restricted
Cash |
|
|
|
Cash and cash equivalents |
$ |
129,142 |
|
|
$ |
65,518 |
|
Restricted cash |
|
3,675 |
|
|
|
— |
|
Total cash, cash equivalents, and restricted cash |
$ |
132,817 |
|
|
$ |
65,518 |
|
|
ROVER GROUP, INC.Adjusted EBITDA
Reconciliation(in thousands, except for
margins) (unaudited) |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
66,203 |
|
|
$ |
50,864 |
|
|
$ |
165,852 |
|
|
$ |
122,059 |
|
Adjusted EBITDA reconciliation: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
10,500 |
|
|
$ |
(15,472 |
) |
|
$ |
5,591 |
|
|
$ |
(27,250 |
) |
Add (deduct): |
|
|
|
|
|
|
|
Depreciation and amortization (1) |
|
3,116 |
|
|
|
3,309 |
|
|
|
9,642 |
|
|
|
9,634 |
|
Stock-based compensation expense (2) |
|
5,993 |
|
|
|
4,881 |
|
|
|
16,436 |
|
|
|
14,025 |
|
Interest expense |
|
15 |
|
|
|
19 |
|
|
|
51 |
|
|
|
61 |
|
Interest income |
|
(3,152 |
) |
|
|
(1,287 |
) |
|
|
(8,566 |
) |
|
|
(2,084 |
) |
Change in fair value, net (3) |
|
— |
|
|
|
— |
|
|
|
(1,115 |
) |
|
|
(4,579 |
) |
Other income (expense), net |
|
568 |
|
|
|
257 |
|
|
|
(1,560 |
) |
|
|
1,045 |
|
(Provision for) benefit from income taxes |
|
128 |
|
|
|
44 |
|
|
|
199 |
|
|
|
(172 |
) |
Loss from equity method investments, net of tax (4) |
|
316 |
|
|
|
325 |
|
|
|
981 |
|
|
|
325 |
|
Acquisition and merger-related costs (5) |
|
— |
|
|
|
168 |
|
|
|
— |
|
|
|
658 |
|
Legal settlements (6) |
|
— |
|
|
|
18,000 |
|
|
|
— |
|
|
|
18,000 |
|
Impairment loss on intangible assets and goodwill (7) |
|
— |
|
|
|
— |
|
|
|
6,916 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
17,484 |
|
|
$ |
10,244 |
|
|
$ |
28,575 |
|
|
$ |
9,663 |
|
Net income (loss) margin (8) |
|
16 |
% |
|
|
(30 |
%) |
|
|
3 |
% |
|
|
(22 |
%) |
Adjusted EBITDA margin (9) |
|
26 |
% |
|
|
20 |
% |
|
|
17 |
% |
|
|
8 |
% |
__________________ |
(1) |
Depreciation and amortization includes amortization expense related
to capitalized internal use software, which is recognized as cost
of revenue (exclusive of depreciation and amortization shown
separately) in the condensed consolidated statements of
operations. |
(2) |
Stock-based compensation expense includes equity granted to
employees as well as non-employee directors. |
(3) |
Change in fair value, net includes the mark-to-market adjustments
related to the Warrant liabilities in connection with the deSPAC
transaction and the change in fair value of an equity method
investment. |
(4) |
The loss from equity method investments for the periods presented
do not include income taxes as the equity method investee has not
yet incurred any such taxes. |
(5) |
Acquisition and merger-related costs include accounting, legal,
consulting and travel-related expenses incurred in connection with
the Merger and other business combinations. |
(6) |
Legal settlements reflects the amount we accrued for a binding
settlement term sheet executed in October 2022 related to worker
classification claims. |
(7) |
Impairment loss on intangible assets and goodwill includes the full
write-off of $3.2 million of intangible assets and $3.8 million of
goodwill related to GoodPup. |
(8) |
Net income (loss) margin is net income (loss) for a period divided
by revenue for the same period. |
(9) |
Adjusted EBITDA margin is Adjusted EBITDA for a period divided by
revenue for the same period. |
|
ROVER GROUP, INC.Other Non-GAAP Financial
Measures Reconciliations(in thousands, except
for percentages and
margins)
(unaudited) |
|
|
Three Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Amount |
|
% |
|
Amount |
|
% |
Revenue |
$ |
66,203 |
|
|
100 |
% |
|
$ |
50,864 |
|
|
100 |
% |
Less: Cost of revenue (exclusive of depreciation and amortization
shown separately) |
|
(13,634 |
) |
|
|
|
|
(11,607 |
) |
|
|
Less: Amortization of intangible assets |
|
(203 |
) |
|
|
|
|
(524 |
) |
|
|
Gross profit |
|
52,366 |
|
|
|
|
|
38,733 |
|
|
|
Gross profit margin |
|
79 |
% |
|
|
|
|
76 |
% |
|
|
Add: Amortization of intangible assets |
|
203 |
|
|
|
|
|
524 |
|
|
|
Add: Internally developed software amortization included in Cost of
revenue (exclusive of depreciation and amortization shown
separately) |
|
1,928 |
|
|
|
|
|
1,749 |
|
|
|
Non-GAAP Contribution |
$ |
54,497 |
|
|
|
|
$ |
41,006 |
|
|
|
Non-GAAP Contribution margin (1) |
|
82 |
% |
|
|
|
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
Operations and support expense |
$ |
8,156 |
|
|
12 |
% |
|
$ |
7,425 |
|
|
15 |
% |
Less: Stock-based compensation expense |
|
(586 |
) |
|
(1 |
) |
|
|
(473 |
) |
|
(1 |
) |
Non-GAAP operations and support expense |
$ |
7,570 |
|
|
11 |
% |
|
$ |
6,952 |
|
|
14 |
% |
|
|
|
|
|
|
|
|
Marketing expense |
$ |
12,684 |
|
|
19 |
% |
|
$ |
8,686 |
|
|
17 |
% |
Less: Stock-based compensation expense |
|
(307 |
) |
|
— |
|
|
|
(302 |
) |
|
(1 |
) |
Non-GAAP marketing expense |
$ |
12,377 |
|
|
19 |
% |
|
$ |
8,384 |
|
|
16 |
% |
|
|
|
|
|
|
|
|
Product development expense |
$ |
8,566 |
|
|
13 |
% |
|
$ |
7,100 |
|
|
14 |
% |
Less: Stock-based compensation expense |
|
(1,588 |
) |
|
(2 |
) |
|
|
(1,293 |
) |
|
(3 |
) |
Non-GAAP product development expense |
$ |
6,978 |
|
|
11 |
% |
|
$ |
5,807 |
|
|
11 |
% |
|
|
|
|
|
|
|
|
General and administrative expense |
$ |
13,599 |
|
|
21 |
% |
|
$ |
30,599 |
|
|
60 |
% |
Less: Stock-based compensation expense |
|
(3,512 |
) |
|
(6 |
) |
|
|
(2,813 |
) |
|
(6 |
) |
Less: Legal settlements |
|
— |
|
|
— |
|
|
|
(18,000 |
) |
|
(35 |
) |
Non-GAAP general and administrative expense |
$ |
10,087 |
|
|
15 |
% |
|
$ |
9,786 |
|
|
19 |
% |
(1) Non-GAAP Contribution margin is
calculated by dividing Non-GAAP Contribution for a period by
revenue for the same period.
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Amount |
|
% |
|
Amount |
|
% |
Revenue |
$ |
165,852 |
|
|
100 |
% |
|
$ |
122,059 |
|
|
100 |
% |
Less: Cost of revenue (exclusive of depreciation and amortization
shown separately) |
|
(37,022 |
) |
|
|
|
|
(29,976 |
) |
|
|
Less: Amortization of intangible assets |
|
(1,193 |
) |
|
|
|
|
(1,463 |
) |
|
|
Gross profit |
|
127,637 |
|
|
|
|
|
90,620 |
|
|
|
Gross profit margin |
|
77 |
% |
|
|
|
|
74 |
% |
|
|
Add: Amortization of intangible assets |
|
1,193 |
|
|
|
|
|
1,463 |
|
|
|
Add: Internally developed software amortization included in Cost of
revenue (exclusive of depreciation and amortization shown
separately) |
|
5,499 |
|
|
|
|
|
5,202 |
|
|
|
Non-GAAP Contribution |
$ |
134,329 |
|
|
|
|
$ |
97,285 |
|
|
|
Non-GAAP Contribution margin (1) |
|
81 |
% |
|
|
|
|
80 |
% |
|
|
|
|
|
|
|
|
|
|
Operations and support expense |
$ |
22,985 |
|
|
14 |
% |
|
$ |
19,265 |
|
|
16 |
% |
Less: Stock-based compensation expense |
|
(1,557 |
) |
|
(1 |
) |
|
|
(1,214 |
) |
|
(1 |
) |
Non-GAAP operations and support expense |
$ |
21,428 |
|
|
13 |
% |
|
$ |
18,051 |
|
|
15 |
% |
|
|
|
|
|
|
|
|
Marketing expense |
$ |
35,401 |
|
|
22 |
% |
|
$ |
27,044 |
|
|
22 |
% |
Less: Stock-based compensation expense |
|
(834 |
) |
|
(1 |
) |
|
|
(858 |
) |
|
(1 |
) |
Non-GAAP marketing expense |
$ |
34,567 |
|
|
21 |
% |
|
$ |
26,186 |
|
|
21 |
% |
|
|
|
|
|
|
|
|
Product development expense |
$ |
24,164 |
|
|
15 |
% |
|
$ |
20,380 |
|
|
17 |
% |
Less: Stock-based compensation expense |
|
(4,291 |
) |
|
(3 |
) |
|
|
(4,157 |
) |
|
(4 |
) |
Non-GAAP product development expense |
$ |
19,873 |
|
|
12 |
% |
|
$ |
16,223 |
|
|
13 |
% |
|
|
|
|
|
|
|
|
General and administrative expense |
$ |
39,640 |
|
|
24 |
% |
|
$ |
53,616 |
|
|
44 |
% |
Less: Stock-based compensation expense |
|
(9,754 |
) |
|
(6 |
) |
|
|
(7,796 |
) |
|
(6 |
) |
Less: Legal settlements |
|
— |
|
|
— |
|
|
|
(18,000 |
) |
|
(15 |
) |
Non-GAAP general and administrative expense |
$ |
29,886 |
|
|
18 |
% |
|
$ |
27,820 |
|
|
23 |
% |
(1) Non-GAAP Contribution margin is
calculated by dividing Non-GAAP Contribution for a period by
revenue for the same period.
Contacts:
MEDIApr@rover.comKristin
Sandberg(360) 510-6365
INVESTORSwalter.ruddy@rover.comWalter Ruddy(206)
715-2369
Rover (NASDAQ:ROVR)
Gráfica de Acción Histórica
De Ago 2024 a Sep 2024
Rover (NASDAQ:ROVR)
Gráfica de Acción Histórica
De Sep 2023 a Sep 2024