Rover Reports Third Quarter 2023 Financial Results

• Third quarter income elevated to $66.2 million, up 30% year-over-year

• GAAP internet earnings was $10.5 million in comparison with a GAAP internet lack of $15.5 million in Q3 2022

  

• Adjusted EBITDA was $17.5 million in comparison with $10.2 million in Q3 2022

• Company raises full 12 months 2023 steering

• Board approves extension of share repurchase program with extra $100 million

SEATTLE, Nov. 06, 2023 (GLOBE NEWSWIRE) — Rover Group, Inc. (“Rover” or the “Company”) (NASDAQ: ROVR), the world’s largest on-line market for pet care, right now introduced monetary outcomes 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,” stated 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 elevated 30% to $66.2 million, in comparison with $50.9 million in Q3 2022

• GBV grew 25% to $266.4 million, in comparison with $213.7 million in Q3 2022

• Total bookings elevated 20% to 1.8 million, in comparison with 1.5 million in Q3 2022. New bookings elevated 8% to 290,000, in comparison with 267,000 in Q3 2022. Repeat bookings elevated 23% to 1.5 million, in comparison with 1.2 million in Q3 2022

• GAAP internet earnings and internet earnings margin had been $10.5 million and 16%, in comparison with a GAAP internet loss and internet loss margin of $15.5 million and 30% in Q3 2022

• Adjusted EBITDA and Adjusted EBITDA margin had been $17.5 million and 26%, in comparison with $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,” stated 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.”

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Fourth Quarter 2023

Raised Full Year 2023

Both the high and low ends of steering incorporate a moderated affect of macroeconomic headwinds in comparison with steering offered in August 2023. The up to date steering vary additionally incorporates a full 12 months of normalized advertising and marketing bills and working prices in comparison with a partial 12 months of every in 2022.

In reliance on the exception offered by Item 10(e)(1)(i)(B) of Regulation S-Okay, Rover has not offered probably the most straight comparable forward-looking GAAP measure to its Adjusted EBITDA and Adjusted EBITDA margin steering or a reconciliation of those forward-looking non-GAAP monetary measures to their most straight comparable GAAP measure because of the uncertainty relating to, and the potential variability of, reconciling gadgets comparable to stock-based compensation, earnings tax, change in honest worth, and achieve or loss from fairness methodology investments. For instance, the non-GAAP adjustment for stock-based compensation expense requires extra inputs comparable to variety of shares granted and market worth that aren’t at present ascertainable. Accordingly, a reconciliation of those forward-looking non-GAAP metrics to their corresponding GAAP equal just isn’t available with out unreasonable effort. Because these changes are inherently variable and unsure and rely upon numerous components which can be past Rover’s management, Rover can be unable to foretell their possible significance. For extra data relating to the non-GAAP monetary measures mentioned on this earnings launch, please see “Non-GAAP Financial Measures” beneath.

Share Repurchase Program

From graduation of buying shares in mid-March via November 1, 2023, Rover repurchased roughly 9.1 million shares for an mixture quantity of roughly $49 million (excluding brokers’ commissions and excise tax), together with roughly 3.5 million shares repurchased for an mixture quantity of roughly $20.4 million (excluding brokers’ commissions and excise tax) throughout the three months ended September 30, 2023.

Rover additionally introduced that its board of administrators has accepted an extension of its beforehand introduced share repurchase program to run via February 28, 2025 and a rise to the entire licensed quantity underneath this system of as much as $100 million leading to a complete licensed quantity of as much as $150 million (unique of brokers’ commissions and excise tax) of its Class A typical inventory, together with the $49 million repurchased via November 1, 2023.

Repurchases of the Class A typical inventory could also be made on a discretionary foundation once in a while via open market transactions (together with via Rule 10b5-1 buying and selling plans) or via privately negotiated transactions in accordance with market circumstances and relevant securities legal guidelines and different authorized necessities, together with the necessities of Rule 10b-18 underneath the Securities Exchange Act of 1934, as amended. The repurchase program doesn’t obligate Rover to amass any particular variety of shares of its Class A typical inventory. The timing, quantity, buy worth and nature of repurchases can be decided by Rover’s administration and rely upon a wide range of components, together with inventory worth, buying and selling quantity, market and financial circumstances, different basic business issues comparable to different funding alternatives, relevant authorized necessities and tax legal guidelines, and different related components. Repurchases underneath this system have been licensed via February 28, 2025, however this system could also be modified, suspended, or terminated at any time on the discretion of Rover’s board of administrators.

Rover expects to fund the repurchases with money and money equivalents and investments. As of September 30, 2023, Rover had money and money equivalents and investments of roughly $230.8 million.

About Rover

Founded in 2011 and primarily based in Seattle, Rover (NASDAQ: ROVR) is the world’s largest on-line market for pet care. Rover connects pet dad and mom with pet care suppliers who supply in a single day companies, together with boarding and in-home pet sitting, in addition to daytime companies, together with doggy daycare, canine walking, and drop-in visits. To study extra about Rover, please go to https://www.rover.com.

Conference Call and Webcast Information

Rover will host a convention name right now at 1:30 p.m. PT (4:30 p.m. ET) to debate its third quarter 2023 monetary outcomes and supply commentary on business efficiency. The convention name could also be accessed by registering on the following hyperlink: https://register.vevent.com/register/BIb78a8cd5292541eead50a01197c618f4. Once registered, you may be supplied with a dial-in and convention ID.

The name will comprise forward-looking statements and different materials data relating to Rover’s monetary and working outcomes and will embody materials business, monetary or different data that isn’t contained on this earnings press launch.

The reside webcast and this earnings press launch might be accessed from Rover’s investor relations web site at https://investors.rover.com/, together with an Investor Presentation and Non-GAAP Reconciliation Supplement posted underneath the “News & Events – Presentations” part of the identical web site deal with. A webcast replay can be available on the similar web site deal with shortly after the conclusion of the reside occasion and can be accessible for not less than 90 days.

Available Information

Rover publicizes materials data to the general public in regards to the Company, its services and products and different issues via a wide range of means, together with filings with the U.S. Securities and Exchange Commission (“SEC”), press releases, public convention calls, webcasts, its web site (www.rover.com), and its Investor Relations web site (https://traders.rover.com). Rover makes use of these channels, in addition to social media, together with its X (formally often known as Twitter) account (@RoverDotCom), its LinkedIn account (https://www.linkedin.com/firm/roverdotcom/), and its YouTube web page (https://www.youtube.com/roverdotcom), to speak with traders and the general public information and developments about Rover and different issues and in an effort to obtain broad, non-exclusionary distribution of knowledge to the general public and for complying with its disclosure obligations underneath Regulation FD. Rover encourages traders, the media, and others within the Company to evaluation the knowledge it makes public in these places, as such data may very well be deemed to be materials data.

Forward-Looking Statements

This press launch and the earnings name referenced on this press launch comprises “forward-looking statements” throughout the which means of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, which contain substantial dangers and uncertainties. These forward-looking statements embody, however usually are not restricted to: Rover’s expectations or predictions of future monetary, operational or business efficiency or circumstances, together with steering and projections for the fourth quarter of 2023 and full 12 months 2023, money technology and long-term targets, future development, profitability, working leverage, and margin expectations, advertising and marketing and working expense expectations, and future impacts of product enhancements and advertising and marketing investments; development and growth alternatives outdoors the United States; anticipated buyer lifetime worth traits; buyer acquisition and buyer expertise targets; product portfolio growth and enhancements; macroeconomic, public well being, pet care business, residential actual property and journey traits and outlooks, together with the anticipated timing of any recession; and Rover’s intention to implement a program to buy as much as an mixture of $150 million of its Class A typical inventory. Forward-looking statements embody all statements that aren’t historic info and might be recognized by phrases comparable to “imagine,” “could,” “will,” “proceed,” “anticipate,” “goal,” “potential,” “forecast,” “assume,” “count on,” “would,” “challenge,” “focus,” “enhance,” “ship,” “drive,” “obtain,” “maintain,” “enhance,” “broaden,” “additional,” “stay,” “outlook,” or comparable expressions and the negatives of these phrases. Forward-looking statements are topic to identified and unknown dangers and uncertainties and are primarily based on doubtlessly inaccurate assumptions that would trigger precise outcomes to vary materially from these anticipated or implied by the forward-looking statements. Actual outcomes could differ materially from the outcomes predicted and reported outcomes shouldn’t be thought of as a sign of future efficiency.

The potential dangers and uncertainties that would trigger precise outcomes to vary from the outcomes predicted embody, amongst others, (1) basic macroeconomic and geopolitical circumstances, together with public well being, pet care business, residential actual property, and journey expectations, components and traits, and their affect on shopper spending patterns, demand for and pricing on the Rover platform, and Rover’s business, working outcomes and monetary situation, (2) Rover’s capability to retain current and purchase new pet dad and mom and pet care suppliers, (3) Rover’s expectations about, its capability to efficiently defend, and the result of, any identified and unknown litigation and regulatory proceedings, (4) Rover’s expectations relating to its future working and monetary efficiency, (5) the energy of Rover’s community, effectiveness of its know-how, and high quality of the choices offered via the Rover platform, (6) Rover’s alternatives and methods for development, together with investments and enhancements, new choices, partnerships, distribution channels, acquisitions and worldwide markets, (7) the success of Rover’s advertising and marketing methods and investments, (8) investments in new merchandise, initiatives and choices and new geographies, market results thereof, and the impact of those investments on Rover’s outcomes of operations, (9) Rover’s incapacity to thoroughly forestall off-platform bookings and funds, (10) the affect of tax data reporting necessities on pet care supplier retention and off-platform bookings and funds, (11) Rover’s capability to match pet dad and mom with prime quality and well-priced choices, (12) evaluation of Rover’s belief and security practices, (13) Rover’s evaluation of and methods to compete with current and new opponents in current and new markets and choices, (14) Rover’s capability to take care of the safety and availability of its platform, (15) Rover’s reliance on third occasion cost service suppliers, cellular working methods and software marketplaces, (16) Rover’s capability to guard its mental property, (17) Rover’s capability to establish, recruit, and retain expert personnel, together with key members of senior administration, (18) seasonal fluctuations in working and monetary outcomes, (18) authorized and regulatory developments and Rover’s capability to remain in compliance with legal guidelines and laws, (19) Rover’s capability to take care of and shield its model and repute, (20) Rover’s capability to successfully handle its development and keep its company tradition, and (21) Rover’s capability to execute the repurchase program which relies on, amongst different issues, developments or modifications in financial or market circumstances and the securities markets, fluctuations within the buying and selling quantity and market worth of the Class A typical inventory, the consequences of macroeconomic circumstances, Rover’s money commitments, the character of different acquisition or funding alternatives, Rover’s money flows from operations, and different components. For extra data on different potential dangers and uncertainties that would trigger precise outcomes to vary from the outcomes predicted, please see these dangers and uncertainties contained in Rover’s filings with the U.S. Securities and Exchange Commission (“SEC”), together with underneath 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-Okay for the 12 months ended December 31, 2022 and Quarterly Reports on Form 10-Q for the quarters ended June 30, 2023 and September 30, 2023. Additional components that would trigger precise outcomes to vary materially from these expressed or implied in forward-looking statements might be present in Rover’s different filings with the SEC that are available, freed from cost, on the SEC’s web site at www.sec.gov and on the Investor Relations web page of Rover’s web site at https://traders.rover.com/.

Investors are cautioned to not place undue reliance on the forward-looking statements. All data offered on this earnings press launch and within the attachments is as of the date hereof and relies on then-current expectations, estimates, forecasts, and projections and the beliefs and assumptions of administration. We undertake no obligation to update this data until required by regulation.

The data that may be accessed via hyperlinks or web site addresses included on this press launch is deemed to not be included in or a part of this press launch.

Definitions

• A reserving is outlined as a single association between a pet father or mother and pet care supplier on the Rover companies market, previous to cancellations, which might be for a single night time or a number of nights for in a single day companies, or for a single walk/day/drop-in or a number of walks/days/drop-ins for daytime companies. New bookings is outlined as the entire variety of first-time bookings that new customers, which Rover refers to as pet dad and mom, e book on our platform in a interval. Repeat bookings are outlined as the entire variety of bookings from pet dad and mom who’ve ever had a earlier reserving on Rover, inclusive of pet dad and mom who had their first reserving throughout the similar quarter.

• Gross Booking Value, or GBV, represents the greenback worth of bookings on the Rover companies market throughout a interval, previous to cancellations, and is inclusive of pet care supplier earnings, service charges, add-ons, taxes, and alterations, and is unique of ideas and Rover’s different ancillary income streams.

Non-GAAP Financial Measures

To complement Rover’s condensed consolidated monetary statements ready and introduced in accordance with U.S. usually accepted accounting rules, or GAAP, Rover makes use of non-GAAP monetary measures on this earnings press launch and/or its associated earnings name, together with Adjusted EBITDA, Adjusted EBITDA margin, Contribution, Contribution margin, and non-GAAP working bills (collectively, the “Non-GAAP Financial Measures”), every as outlined beneath. A reconciliation of the historic Non-GAAP Financial Measures to their most straight comparable historic GAAP monetary measures is introduced in tabular kind on the finish of this earnings press launch instantly following the GAAP monetary statements. The Non-GAAP Financial Measures are supplemental measures of Rover’s efficiency which can be neither required by, nor introduced in accordance with, GAAP. The Non-GAAP Financial Measures have limitations as an analytical device, which limitations are described beneath, and you shouldn’t take into account them in isolation, or as an alternative choice to, GAAP monetary measures.

Rover makes use of the Non-GAAP Financial Measures to judge the well being of its business, measure its working efficiency, establish traits, put together monetary forecasts and make strategic selections, together with these associated to working bills, as a way to judge period-to-period comparisons, and decide incentive compensation. Rover considers the Non-GAAP Financial Measures to be vital measures as a result of they assist illustrate underlying traits in its business and its historic working efficiency on a extra constant foundation.

Rover believes that these Non-GAAP Financial Measures, when taken along with their corresponding comparable GAAP monetary measure, present significant supplemental data to traders as they supply a foundation for period-to-period comparisons of Rover’s business by excluding the impact of sure non-cash and money beneficial properties, bills, losses and variable prices that is probably not indicative of its recurring core business, outcomes of operations, or outlook. Rover believes these Non-GAAP Financial Measures are helpful to traders as a result of they (1) enable for higher transparency with respect to key metrics utilized by administration in its monetary, operational and strategic decision-making and in assessing the well being of Rover’s business and working efficiency, (2) are utilized by Rover’s institutional traders and the analyst neighborhood to assist them analyze the well being of Rover’s business, (3) enable traders and others to grasp and consider Rover’s working ends in the identical method as Rover’s administration and board of administrators, and (4) present an affordable foundation for evaluating Rover’s ongoing outcomes of operations and people of different corporations.

Examples of the constraints of the Non-GAAP Financial Measures embody:

• Adjusted EBITDA excludes sure recurring, non-cash prices, comparable to depreciation of property and tools and amortization of intangible belongings together with amortization associated to capitalized inside use software program. Although these are non-cash prices, the belongings being depreciated and amortized could have to get replaced sooner or later, and Adjusted EBITDA doesn’t replicate modifications in, or money necessities for, Rover’s working capital wants;

• Adjusted EBITDA excludes sure restructuring and acquisition and merger-related prices, some or all of which can be settled in money;

• Adjusted EBITDA and non-GAAP working bills exclude stock-based compensation expense, which has been, and can proceed to be for the foreseeable future, a big recurring non-cash expense in Rover’s business because it grows as an organization and an vital a part of its compensation technique;

• Adjusted EBITDA doesn’t replicate the parts of different earnings (expense), internet, which consists primarily of realized and unrealized beneficial properties and losses on overseas foreign money transactions, realized beneficial properties and losses from the change in honest worth of investments and monetary devices and gross sales of such investments, and for the 9 months ended September 30, 2023 a $1.9 million worker retention credit score;

• Adjusted EBITDA doesn’t replicate period-to-period modifications in taxes, earnings tax expense or the money essential to pay earnings taxes;

• Adjusted EBITDA and non-GAAP basic and administrative expense exclude sure authorized settlements which will scale back money available to Rover;

• Adjusted EBITDA doesn’t take into account the affect of goodwill and intangible asset impairments;

• these measures exclude vital bills and earnings which can be required by GAAP to be recorded in Rover’s monetary statements;

• these measures are topic to inherent limitations as they replicate the train of judgments by administration about which expense and earnings are excluded or included in figuring out these Non-GAAP Financial Measures; and

• Rover’s calculation of those Non-GAAP Financial Measures could differ from equally titled non-GAAP monetary measures, if any, reported by Rover’s peer corporations, or these peer corporations could use different measures to calculate their monetary efficiency, and due to this fact Rover’s use of the Non-GAAP Financial Measures is probably not straight similar to equally titled measures of different corporations.

To compensate for these limitations, administration presents the Non-GAAP Financial Measures together with GAAP outcomes. Rover encourages traders and others to evaluation its monetary data in its entirety, to not depend on any single monetary measure, and to view the Non-GAAP Financial Measures together with their respective associated GAAP monetary measures. In addition, such monetary data is unaudited and doesn’t conform to SEC Regulation S-X and in consequence such data could also be introduced in another way in Rover’s future earnings releases and filings with the SEC.

The Non-GAAP Financial Measures usually are not indicative of Rover’s general outcomes, an indicator of previous or future monetary efficiency, a monetary measure of complete firm profitability, and usually are not meant for use as a proxy for complete firm profitability nor suggest profitability for Rover’s business. Also, sooner or later Rover could incur bills or prices comparable to these being adjusted within the calculation of those Non-GAAP Financial Measures. Rover’s presentation of those Non-GAAP Financial Measures shouldn’t be construed as an inference that future outcomes can be unaffected by uncommon or nonrecurring gadgets.

Rover defines Adjusted EBITDA as internet earnings (loss) excluding depreciation and amortization (together with amortization expense associated to capitalized inside use software program), stock-based compensation expense, curiosity expense, curiosity earnings, change in honest worth, internet, different earnings (expense), internet, earnings tax expense or profit, sure acquisition and merger-related prices, achieve or loss from fairness methodology investments, internet of tax, and non-routine gadgets comparable to goodwill and intangible asset or funding impairment (if any), restructuring prices (if any), transaction-related bills (if any), and sure authorized settlements (if any). Certain authorized settlements refers to settlements or different accruals arising from any vital authorized proceedings associated to employee classification issues. These issues have restricted precedent, cowl prolonged historic intervals and are unpredictable in each magnitude and timing and are due to this fact distinct from regular, recurring authorized issues and associated bills incurred in Rover’s ongoing working efficiency. Adjusted EBITDA margin as introduced within the reconciliation desk beneath is Adjusted EBITDA for a interval divided by income for a similar interval.

Beginning with the three months ended June 30, 2023, Rover redefined Adjusted EBITDA to omit the affect of a $6.9 million impairment loss on intangible belongings and goodwill and to replicate the affect of a $1.9 million worker retention credit score that was recorded inside different earnings (expense), internet on the condensed consolidated statements of operations for the three months ended June 30, 2023 and the 9 months ended September 30, 2023. Rover didn’t have any impairment loss on intangible belongings and goodwill or report any worker retention credit score throughout the 9 months ended September 30, 2022. Rover believes the changes described above usually are not indicative of its core working efficiency and are helpful to traders by enabling them to raised assess its working efficiency within the context of present interval outcomes and supply for higher comparability with its traditionally disclosed Adjusted EBITDA quantities.

Rover defines Contribution as gross revenue (loss) plus amortization of intangible belongings and amortization of internally developed software program included in cost of income (unique of depreciation and amortization proven individually). Gross revenue (loss) is outlined as income much less cost of income (unique of depreciation and amortization proven individually) and amortization of intangible belongings. Gross revenue margin is calculated by dividing gross revenue (loss) for a interval by income for a similar interval. Contribution margin is calculated by dividing Contribution for a interval by income for a similar interval.

GAAP working bills include operations and help expense, advertising and marketing expense, product and growth expense, and basic and administrative expense. Rover defines Non-GAAP working bills as GAAP working bills excluding the non-cash bills arising from the grant of stock-based awards, and within the case of non-GAAP basic and administrative expense, excluding sure authorized settlements (if any). Certain authorized settlements refers to settlements or different accruals arising from any vital authorized proceedings associated to employee classification issues. These issues have restricted precedent, cowl prolonged historic intervals and are unpredictable in each magnitude and timing and are due to this fact distinct from regular, recurring authorized issues and associated bills incurred in Rover’s ongoing working efficiency. These non-GAAP working bills are additionally introduced as a proportion of income, which is calculated by dividing the precise non-GAAP working expense for a interval by income for a similar interval.

(1)  ABV, or common reserving worth, outlined as GBV divided by Total bookings.
(2)  Active consumer outlined as distinctive pet proprietor with not less than one reserving in interval.
(3)  Recognized take price outlined as (Revenue + change in Deferred income) divided by GBV.
(4)  Cancellation price outlined as Cancelled bookings worth divided by GBV.

(1)  Non-GAAP Contribution margin is calculated by dividing Non-GAAP Contribution for a interval by income for a similar interval.

(1)  Non-GAAP Contribution margin is calculated by dividing Non-GAAP Contribution for a interval by income for a similar interval.

Contacts:

MEDIA
[email protected]
Kristin Sandberg
(360) 510-6365

INVESTORS
[email protected]
Walter Ruddy
(206) 715-2369