Rover Group, Inc. (“Rover” or the “Company”) (NASDAQ: ROVR), the
world’s largest online marketplace for pet care, today announced
financial results for the second quarter ended June 30, 2023.
“Rover delivered a strong quarter, reporting 35%
revenue growth and bottom line margin expansion,” said Rover
co-founder and CEO, Aaron Easterly. “Our product improvements and
expanded marketing efforts drove strong overall performance, while
our European markets are showing inspiring progress. Our
significant bottom line margin improvement stands out this quarter,
demonstrating the operating leverage inherent in our business. We
are incredibly proud of how our team is executing and remain
confident in achieving our long-term targets.”
Second Quarter 2023
Highlights:
- Revenue increased
35% to $58.5 million, compared to $43.4 million in Q2 2022.
- GBV grew 25% to
$266.1 million, compared to $212.8 million in Q2 2022.
- Total Bookings
increased 20% to 1.7 million, compared to 1.4 million in Q2 2022.
New bookings increased 7% to 279,000, compared to 260,000 in Q2
2022. Repeat bookings increased 23% to 1.5 million, compared to 1.2
million in Q2 2022.
- GAAP net loss and
net loss margin were $0.3 million and 0%, including a $6.9 million
non-cash impairment charge and a $1.9 million employee retention
credit during the quarter, compared to a GAAP net loss and net loss
margin of $3.6 million and 8% in Q2 2022.
- Adjusted EBITDA and
Adjusted EBITDA margin were $10.5 million and 18%, compared to $4.2
million and 10% in Q2 2022.
Outlook
"As a result of our strong second quarter
results and a more encouraging outlook for the remainder of the
year, we are again increasing both our revenue and Adjusted EBITDA
guidance for 2023,” said Charlie Wickers, Rover CFO. “While we are
retaining potential macro economic and health impacts in our
forecast, we now expect the peak timing of a recession impact to
occur in the mid first half of 2024 versus the previously modeled
mid second half of 2023.”
Third Quarter 2023
- Revenue
- Rover anticipates
revenue in the range of $61 - $63 million.
- Adjusted EBITDA
- Rover anticipates
Adjusted EBITDA in the range of $12 - $14 million, a 21% margin at
the midpoint of the projected range.
Raised Full Year 2023
- Revenue
- Rover anticipates
revenue in the range of $222 - $227 million, a year-over-year
increase of 29% at the midpoint of the projected range.
- Adjusted EBITDA
- Rover anticipates
Adjusted EBITDA in the range of $37 - $41 million, a 17% margin at
the midpoint of the projected range.
Both the low and high ends of guidance
incorporate the impact of macroeconomic headwinds, including a mild
to moderate recession, public health concerns and travel
disruptions. 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 July 31, 2023, Rover repurchased approximately
5.6 million shares for an aggregate amount of approximately $26
million (excluding brokers' commissions and excise tax), including
approximately 3.6 million shares repurchased for an aggregate
amount of approximately $16.5 million (excluding brokers'
commissions and excise tax) during the three months ended June 30,
2023.
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 second 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/BI9f81d97184c940a0ab20b2163052d9f2.
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 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 third quarter of 2023 and full year 2023 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, and travel trends and
outlooks, including the anticipated timing of any recession; and
Rover's share repurchase program authorized to purchase up to $50
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," "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 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) the strength of Rover's
network, effectiveness of its technology, and quality of the
offerings provided through the Rover platform, (4) Rover's
opportunities and strategies for growth, including investments and
improvements, partnerships, distribution channels, acquisitions and
international markets, (5) the success of Rover's marketing
strategies and investments, (6) investments in new products,
initiatives and offerings, and the effect of these investments on
Rover's results of operations, (7) Rover's expectations about, its
ability to successfully defend, and the outcome of, any known and
unknown litigation and regulatory proceedings, (8) Rover's
expectations regarding its future operating and financial
performance, (9) Rover's ability to match pet parents with high
quality and well-priced offerings, (10) assessment of Rover's trust
and safety practices, (11) Rover's ability to maintain the security
and availability of its platform, (12) Rover's assessment of and
strategies to compete with existing and new competitors in existing
and new markets and offerings, (13) Rover's ability to identify,
recruit, and retain skilled personnel, including key members of
senior management, (14) seasonal fluctuations in operating and
financial results, (15) Rover's ability to maintain and protect its
brand and reputation, (16) legal and regulatory developments and
Rover's ability to stay in compliance with laws and regulations,
(17) Rover's ability to effectively manage its growth and maintain
its corporate culture, and (18) 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 included under the caption "Risk Factors" and
elsewhere in Rover's annual report on Form 10-K and quarterly
reports on Form 10-Q filed with the SEC. 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,
and 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 three and
six months ended June 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
impairment;
- 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 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). 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 and six 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 and
six months ended June 30, 2023. Rover did not have any impairment
loss on intangible assets and goodwill or record any employee
retention credit during the three and six months ended June 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, or IDS, 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). 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 EndedJune 30, |
|
Six Months EndedJune 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Bookings |
|
|
|
|
|
|
|
New Bookings |
|
279 |
|
|
|
260 |
|
|
|
486 |
|
|
|
439 |
|
Repeat Bookings |
|
1,459 |
|
|
|
1,188 |
|
|
|
2,727 |
|
|
|
2,172 |
|
Total Bookings |
|
1,737 |
|
|
|
1,448 |
|
|
|
3,213 |
|
|
|
2,611 |
|
GBV |
$ |
266.1 |
|
|
$ |
212.8 |
|
|
$ |
475.6 |
|
|
$ |
366.5 |
|
ABV(1) |
$ |
153 |
|
|
$ |
147 |
|
|
$ |
148 |
|
|
$ |
140 |
|
|
|
|
|
|
|
|
|
Total active users(2) |
|
804 |
|
|
|
684 |
|
|
|
1,153 |
|
|
|
966 |
|
GBV per user |
$ |
331 |
|
|
$ |
311 |
|
|
$ |
412 |
|
|
$ |
379 |
|
|
|
|
|
|
|
|
|
Recognized take rate(3) |
|
23.3 |
% |
|
|
21.9 |
% |
|
|
23.2 |
% |
|
|
22.0 |
% |
Cancellation rate(4) |
|
12.7 |
% |
|
|
14.1 |
% |
|
|
12.2 |
% |
|
|
13.5 |
% |
(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 EndedJune 30, |
|
Six Months EndedJune 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
$ |
58,529 |
|
|
$ |
43,371 |
|
|
$ |
99,649 |
|
|
$ |
71,195 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization shown
separately below) |
|
12,608 |
|
|
|
10,521 |
|
|
|
23,388 |
|
|
|
18,369 |
|
Operations and support |
|
7,800 |
|
|
|
6,485 |
|
|
|
14,829 |
|
|
|
11,840 |
|
Marketing |
|
13,379 |
|
|
|
11,027 |
|
|
|
22,717 |
|
|
|
18,358 |
|
Product development |
|
8,301 |
|
|
|
6,647 |
|
|
|
15,598 |
|
|
|
13,280 |
|
General and administrative |
|
13,679 |
|
|
|
11,477 |
|
|
|
26,041 |
|
|
|
23,017 |
|
Depreciation and amortization |
|
1,476 |
|
|
|
1,175 |
|
|
|
2,954 |
|
|
|
2,871 |
|
Impairment loss on intangible assets and goodwill |
|
6,916 |
|
|
|
— |
|
|
|
6,916 |
|
|
|
— |
|
Total costs and expenses |
|
64,159 |
|
|
|
47,332 |
|
|
|
112,443 |
|
|
|
87,735 |
|
Loss from operations |
|
(5,630 |
) |
|
|
(3,961 |
) |
|
|
(12,794 |
) |
|
|
(16,540 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
Interest income |
|
2,991 |
|
|
|
658 |
|
|
|
5,414 |
|
|
|
797 |
|
Interest expense |
|
(18 |
) |
|
|
(24 |
) |
|
|
(36 |
) |
|
|
(42 |
) |
Change in fair value of other investments |
|
801 |
|
|
|
— |
|
|
|
1,115 |
|
|
|
— |
|
Change in fair value of derivative warrant liabilities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,579 |
|
Other income (expense), net |
|
2,024 |
|
|
|
(532 |
) |
|
|
2,128 |
|
|
|
(788 |
) |
Total other income (expense), net |
|
5,798 |
|
|
|
102 |
|
|
|
8,621 |
|
|
|
4,546 |
|
Income (loss) before income taxes and equity method
investments |
|
168 |
|
|
|
(3,859 |
) |
|
|
(4,173 |
) |
|
|
(11,994 |
) |
(Provision for) benefit from income taxes |
|
(70 |
) |
|
|
227 |
|
|
|
(71 |
) |
|
|
216 |
|
Loss from equity method investments, net of tax |
|
(351 |
) |
|
|
— |
|
|
|
(665 |
) |
|
|
— |
|
Net loss |
$ |
(253 |
) |
|
$ |
(3,632 |
) |
|
$ |
(4,909 |
) |
|
$ |
(11,778 |
) |
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
0.00 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.07 |
) |
Weighted-average shares used in computing net loss per share
attributable to common stockholders: |
|
|
|
|
|
|
|
Basic and diluted |
|
183,623 |
|
|
|
181,730 |
|
|
|
183,992 |
|
|
|
180,707 |
|
|
ROVER GROUP, INC.
Condensed Consolidated Balance
Sheets (in thousands, except for per share
data) (unaudited)
|
June 30,2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
193,039 |
|
|
$ |
58,875 |
|
Short-term investments |
|
70,964 |
|
|
|
191,347 |
|
Accounts receivable, net |
|
84,253 |
|
|
|
53,181 |
|
Notes receivable from related parties |
|
— |
|
|
|
1,810 |
|
Prepaid expenses and other current assets |
|
11,408 |
|
|
|
6,829 |
|
Total current assets |
|
359,664 |
|
|
|
312,042 |
|
Property and equipment, net |
|
19,422 |
|
|
|
19,518 |
|
Operating lease right-of-use assets |
|
17,771 |
|
|
|
18,871 |
|
Intangible assets, net |
|
2,715 |
|
|
|
6,865 |
|
Goodwill |
|
33,159 |
|
|
|
36,915 |
|
Deferred tax asset, net |
|
1,411 |
|
|
|
1,306 |
|
Long-term investments |
|
5,216 |
|
|
|
22,463 |
|
Investment in equity securities in related parties |
|
3,760 |
|
|
|
— |
|
Other noncurrent assets |
|
728 |
|
|
|
281 |
|
Total assets |
$ |
443,846 |
|
|
$ |
418,261 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
5,800 |
|
|
$ |
5,354 |
|
Accrued compensation and related expenses |
|
5,354 |
|
|
|
6,644 |
|
Accrued expenses and other current liabilities |
|
24,418 |
|
|
|
22,694 |
|
Deferred revenue |
|
16,390 |
|
|
|
5,544 |
|
Pet parent deposits |
|
69,452 |
|
|
|
40,783 |
|
Pet care provider liabilities |
|
2,654 |
|
|
|
3,319 |
|
Operating lease liabilities, current portion |
|
2,545 |
|
|
|
2,727 |
|
Total current liabilities |
|
126,613 |
|
|
|
87,065 |
|
Operating lease liabilities, net of current portion |
|
20,716 |
|
|
|
22,208 |
|
Other noncurrent liabilities |
|
966 |
|
|
|
714 |
|
Total liabilities |
|
148,295 |
|
|
|
109,987 |
|
Commitments and contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value, 10,000 shares authorized as of
June 30, 2023 and December 31, 2022; no shares issued and
outstanding as of June 30, 2023 and December 31,
2022 |
|
— |
|
|
|
— |
|
Class A common stock, $0.0001 par value, 990,000 shares authorized
as of June 30, 2023 and December 31, 2022; 183,158 and
184,526 shares issued and outstanding as of June 30, 2023 and
December 31, 2022, respectively |
|
18 |
|
|
|
18 |
|
Additional paid-in capital |
|
662,690 |
|
|
|
651,659 |
|
Accumulated other comprehensive loss |
|
(204 |
) |
|
|
(1,098 |
) |
Accumulated deficit |
|
(366,953 |
) |
|
|
(342,305 |
) |
Total stockholders’ equity |
|
295,551 |
|
|
|
308,274 |
|
Total liabilities and stockholders’ equity |
$ |
443,846 |
|
|
$ |
418,261 |
|
|
ROVER GROUP, INC.
Condensed Consolidated Statements of Cash
Flows(in thousands)
(unaudited)
|
Six Months EndedJune 30, |
|
2023 |
|
2022 |
OPERATING ACTIVITIES |
|
|
|
Net loss |
$ |
(4,909 |
) |
|
$ |
(11,778 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Stock-based compensation |
|
10,443 |
|
|
|
9,144 |
|
Depreciation and amortization |
|
6,526 |
|
|
|
6,325 |
|
Non-cash operating lease costs |
|
1,100 |
|
|
|
1,502 |
|
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 |
|
(2,405 |
) |
|
|
(76 |
) |
Deferred income taxes |
|
(47 |
) |
|
|
(246 |
) |
Loss on disposal of property and equipment |
|
79 |
|
|
|
16 |
|
Loss from equity method investments |
|
665 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(31,071 |
) |
|
|
(12,168 |
) |
Prepaid expenses and other current assets |
|
(4,574 |
) |
|
|
28 |
|
Other noncurrent assets |
|
(448 |
) |
|
|
14 |
|
Accounts payable |
|
445 |
|
|
|
636 |
|
Accrued expenses and other current liabilities |
|
352 |
|
|
|
(1,277 |
) |
Deferred revenue and pet parent deposits |
|
39,515 |
|
|
|
34,540 |
|
Pet care provider liabilities |
|
(666 |
) |
|
|
(6,915 |
) |
Operating lease liabilities |
|
(1,674 |
) |
|
|
(1,687 |
) |
Other noncurrent liabilities |
|
251 |
|
|
|
131 |
|
Net cash provided by operating activities |
|
19,383 |
|
|
|
13,610 |
|
INVESTING ACTIVITIES |
|
|
|
Purchases of property and equipment |
|
(400 |
) |
|
|
(389 |
) |
Capitalization of internal-use software |
|
(4,152 |
) |
|
|
(3,727 |
) |
Acquisition of businesses, net of cash acquired |
|
— |
|
|
|
(5,711 |
) |
Purchases of equity securities in related parties |
|
(1,500 |
) |
|
|
— |
|
Purchases of available-for-sale securities |
|
(48,476 |
) |
|
|
(174,328 |
) |
Proceeds from sales of available-for-sale securities |
|
57,800 |
|
|
|
— |
|
Maturities of available-for-sale securities |
|
131,514 |
|
|
|
12,600 |
|
Net cash provided by (used in) investing activities |
|
134,786 |
|
|
|
(171,555 |
) |
FINANCING ACTIVITIES |
|
|
|
Proceeds from exercise of stock options and issuance of common
stock |
|
3,000 |
|
|
|
3,791 |
|
Redemption of stock warrants |
|
— |
|
|
|
(7 |
) |
Repurchases of common stock |
|
(19,667 |
) |
|
|
— |
|
Taxes paid related to settlement of equity awards |
|
(3,374 |
) |
|
|
(1,301 |
) |
Net cash (used in) provided by financing activities |
|
(20,041 |
) |
|
|
2,483 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
36 |
|
|
|
(105 |
) |
Net increase (decrease) in cash and cash equivalents |
|
134,164 |
|
|
|
(155,567 |
) |
Cash and cash equivalents, beginning of period |
|
58,875 |
|
|
|
278,904 |
|
Cash and cash equivalents, end of period |
$ |
193,039 |
|
|
$ |
123,337 |
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION |
|
|
|
Cash paid for income taxes |
$ |
396 |
|
|
$ |
45 |
|
Cash paid for interest |
|
— |
|
|
|
7 |
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
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 |
|
964 |
|
|
|
402 |
|
|
|
|
|
|
|
|
|
ROVER GROUP, INC.
Adjusted EBITDA
Reconciliation(in thousands,
except for margins)
(unaudited)
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
$ |
58,529 |
|
|
$ |
43,371 |
|
|
$ |
99,649 |
|
|
$ |
71,195 |
|
Adjusted EBITDA reconciliation: |
|
|
|
|
|
|
|
Net loss |
$ |
(253 |
) |
|
$ |
(3,632 |
) |
|
$ |
(4,909 |
) |
|
$ |
(11,778 |
) |
Add (deduct): |
|
|
|
|
|
|
|
Depreciation and amortization(1) |
|
3,292 |
|
|
|
2,897 |
|
|
|
6,526 |
|
|
|
6,325 |
|
Stock-based compensation expense(2) |
|
5,938 |
|
|
|
4,834 |
|
|
|
10,443 |
|
|
|
9,144 |
|
Interest expense |
|
18 |
|
|
|
24 |
|
|
|
36 |
|
|
|
42 |
|
Interest income |
|
(2,991 |
) |
|
|
(658 |
) |
|
|
(5,414 |
) |
|
|
(797 |
) |
Change in fair value, net(3) |
|
(801 |
) |
|
|
— |
|
|
|
(1,115 |
) |
|
|
(4,579 |
) |
Other income (expense), net |
|
(2,024 |
) |
|
|
532 |
|
|
|
(2,128 |
) |
|
|
788 |
|
(Provision for) benefit from income taxes |
|
70 |
|
|
|
(227 |
) |
|
|
71 |
|
|
|
(216 |
) |
Loss from equity method investments, net of tax |
|
351 |
|
|
|
— |
|
|
|
665 |
|
|
|
— |
|
Acquisition and merger-related costs(4) |
|
— |
|
|
|
410 |
|
|
|
— |
|
|
|
490 |
|
Impairment loss on intangible assets and goodwill(5) |
|
6,916 |
|
|
|
— |
|
|
|
6,916 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
10,516 |
|
|
$ |
4,180 |
|
|
$ |
11,091 |
|
|
$ |
(581 |
) |
Net loss margin(6) |
|
0 |
% |
|
|
(8 |
%) |
|
|
(5 |
%) |
|
|
(17 |
%) |
Adjusted EBITDA margin(7) |
|
18 |
% |
|
|
10 |
% |
|
|
11 |
% |
|
|
(1 |
%) |
(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) |
Acquisition and merger-related costs include accounting, legal,
consulting and travel-related expenses incurred in connection with
the Caravel merger and other business combinations. |
(5) |
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. |
(6) |
Net loss margin is net loss for a period divided by revenue for the
same period. |
(7) |
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) (unaudited)
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
Amount |
|
% |
|
Amount |
|
% |
Revenue |
$ |
58,529 |
|
|
100 |
% |
|
$ |
43,371 |
|
|
100 |
% |
Less: Cost of revenue (exclusive of depreciation and amortization
shown separately) |
|
(12,608 |
) |
|
|
|
|
(10,521 |
) |
|
|
Less: Amortization of intangible assets |
|
(495 |
) |
|
|
|
|
(736 |
) |
|
|
Gross profit |
|
45,426 |
|
|
|
|
|
32,114 |
|
|
|
Gross profit margin |
|
78 |
% |
|
|
|
|
74 |
% |
|
|
Add: Amortization of intangible assets |
|
495 |
|
|
|
|
|
736 |
|
|
|
Add: Internally developed software amortization included in Cost of
revenue (exclusive of depreciation and amortization shown
separately) |
|
1,815 |
|
|
|
|
|
1,721 |
|
|
|
Non-GAAP contribution |
$ |
47,736 |
|
|
|
|
$ |
34,571 |
|
|
|
Non-GAAP contribution margin(1) |
|
82 |
% |
|
|
|
|
80 |
% |
|
|
|
|
|
|
|
|
|
|
Operations and support expense |
$ |
7,800 |
|
|
13 |
% |
|
$ |
6,485 |
|
|
15 |
% |
Less: Stock-based compensation expense |
|
(543 |
) |
|
(1 |
) |
|
|
(393 |
) |
|
(1 |
) |
Non-GAAP operations and support expense |
$ |
7,257 |
|
|
12 |
% |
|
$ |
6,092 |
|
|
14 |
% |
|
|
|
|
|
|
|
|
Marketing expense |
$ |
13,379 |
|
|
23 |
% |
|
$ |
11,027 |
|
|
25 |
% |
Less: Stock-based compensation expense |
|
(264 |
) |
|
(1 |
) |
|
|
(305 |
) |
|
(1 |
) |
Non-GAAP marketing expense |
$ |
13,115 |
|
|
22 |
% |
|
$ |
10,722 |
|
|
24 |
% |
|
|
|
|
|
|
|
|
Product development expense |
$ |
8,301 |
|
|
14 |
% |
|
$ |
6,647 |
|
|
15 |
% |
Less: Stock-based compensation expense |
|
(1,605 |
) |
|
(3 |
) |
|
|
(1,474 |
) |
|
(3 |
) |
Non-GAAP product development expense |
$ |
6,696 |
|
|
11 |
% |
|
$ |
5,173 |
|
|
12 |
% |
|
|
|
|
|
|
|
|
General and administrative expense |
$ |
13,679 |
|
|
23 |
% |
|
$ |
11,477 |
|
|
26 |
% |
Less: Stock-based compensation expense |
|
(3,526 |
) |
|
(6 |
) |
|
|
(2,662 |
) |
|
(6 |
) |
Non-GAAP general and administrative expense |
$ |
10,153 |
|
|
17 |
% |
|
$ |
8,815 |
|
|
20 |
% |
(1) |
Non-GAAP
Contribution margin is calculated by dividing Non-GAAP Contribution
for a period by revenue for the same period. |
|
|
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
Amount |
|
% |
|
Amount |
|
% |
Revenue |
$ |
99,649 |
|
|
100 |
% |
|
$ |
71,195 |
|
|
100 |
% |
Less: Cost of revenue (exclusive of depreciation and amortization
shown separately) |
|
(23,388 |
) |
|
|
|
|
(18,369 |
) |
|
|
Less: Amortization of intangible assets |
|
(990 |
) |
|
|
|
|
(939 |
) |
|
|
Gross profit |
|
75,271 |
|
|
|
|
|
51,887 |
|
|
|
Gross profit margin |
|
76 |
% |
|
|
|
|
73 |
% |
|
|
Add: Amortization of intangible assets |
|
990 |
|
|
|
|
|
939 |
|
|
|
Add: Internally developed software amortization included in Cost of
revenue (exclusive of depreciation and amortization shown
separately) |
|
3,571 |
|
|
|
|
|
3,453 |
|
|
|
Non-GAAP contribution |
$ |
79,832 |
|
|
|
|
$ |
56,279 |
|
|
|
Non-GAAP contribution margin(1) |
|
80 |
% |
|
|
|
|
79 |
% |
|
|
|
|
|
|
|
|
|
|
Operations and support expense |
$ |
14,829 |
|
|
15 |
% |
|
$ |
11,840 |
|
|
17 |
% |
Less: Stock-based compensation expense |
|
(971 |
) |
|
(1 |
) |
|
|
(741 |
) |
|
(1 |
) |
Non-GAAP operations and support expense |
$ |
13,858 |
|
|
14 |
% |
|
$ |
11,099 |
|
|
16 |
% |
|
|
|
|
|
|
|
|
Marketing expense |
$ |
22,717 |
|
|
23 |
% |
|
$ |
18,358 |
|
|
26 |
% |
Less: Stock-based compensation expense |
|
(527 |
) |
|
(1 |
) |
|
|
(556 |
) |
|
(1 |
) |
Non-GAAP marketing expense |
$ |
22,190 |
|
|
22 |
% |
|
$ |
17,802 |
|
|
25 |
% |
|
|
|
|
|
|
|
|
Product development expense |
$ |
15,598 |
|
|
16 |
% |
|
$ |
13,280 |
|
|
19 |
% |
Less: Stock-based compensation expense |
|
(2,703 |
) |
|
(3 |
) |
|
|
(2,864 |
) |
|
(4 |
) |
Non-GAAP product development expense |
$ |
12,895 |
|
|
13 |
% |
|
$ |
10,416 |
|
|
15 |
% |
|
|
|
|
|
|
|
|
General and administrative expense |
$ |
26,041 |
|
|
26 |
% |
|
$ |
23,017 |
|
|
32 |
% |
Less: Stock-based compensation expense |
|
(6,242 |
) |
|
(6 |
) |
|
|
(4,983 |
) |
|
(7 |
) |
Non-GAAP general and administrative expense |
$ |
19,799 |
|
|
20 |
% |
|
$ |
18,034 |
|
|
25 |
% |
(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
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