It is now my pleasure to introduce your host, Miss Denise Garcia of ICR. Thank you. You may now begin.

Transcription

1 Care.com (CRCM) Q Financial Results Conference Call May 1, 2014 Operator: Greetings and welcome to the Care.com First Quarter 2014 Earnings Results Conference Call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require Operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Miss Denise Garcia of ICR. Thank you. You may now begin. Denise Garcia: Thank you. Good morning and welcome to Care.com's financial results call for the Fiscal Quarter ended March 29th, During the course of this conference call, we will discuss our business outlook and make other forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of These may include, among other things, projected financial results or operating metrics, business strategies, anticipated future products or services, anticipated market demand or opportunities, and other forward-looking topics. Such statements are only predictions based on Management s current expectations. Actual events or results could differ materially from those predictions due to a number of risks and uncertainties, including those set forth in the press release that we issued earlier today as well as those more fully described in our filings with the Securities and Exchange Commission. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. We will also be referring to non-gaap measures on this call. These non-gaap measures are not prepared in accordance with Generally Accepted Accounting Principles. Reconciliations to the most directly comparable GAAP financial measures are provided in the tables in the press release and Form 8-K filed earlier this morning with the SEC. Today s call is available via webcast and a replay will be available for two weeks following the conclusion of the call. To access the press release, supplemental financial information, or the webcast replay, please consult the IR section of Care.com. On today s call are Sheila Lirio Marcelo, Founder and CEO, and John Leahy, EVP and CFO. With that, let me turn the call over to Sheila Marcelo.

2 Thanks Denise. Good morning. Thank you all for joining us today to discuss the results of our first quarter as a public Company. Our business is growing rapidly and we re off to a strong start in John Leahy and I are excited to share our results with you today. As we continue to build and grow our business, we are guided by our mission to improve the lives of families and caregivers by helping them connect in a reliable and easy way. We are the clear market leader, disrupting traditional ways of finding care and yet we are still in the early stages of attracting a huge market opportunity. I ll start with this quarter s highlights: I ll start with this quarter s highlights. First quarter revenue was $25.3 million, an increase of 39% over Q1 of last year. Care.com ended the first quarter of 2014 with 10.7 million members, an increase of 44% from Q1 of last year. Our US Matching revenue grew to $18 million in the first quarter, a 37% increase over Q1 of last year. In Q1, Payments revenue grew 37% to 4 million. Q1 EBITDA was a loss of $9.6 million consistent with our expectations, and driven by planned investments. Key investments in the quarter included sales and marketing in our US Matching and Payments businesses, as well as in our mobile product and user experience, including the acqui-hire of the mobile development team formerly comprising the firm Consmr. In Q1, we introduced new releases of our ios and Android apps, and launched enhanced mobile web features. Mobile visitors now make up half of our US traffic, which was an average of 5.7 million total unique monthly visitors, a 36% increase over Q1 of last year. Now, I d like to share with you our first quarter performance highlights from each of our core businesses, starting with US Matching, which includes our workplace solutions business. As we shared with you during our IPO Roadshow, over the past seven years, our primary focus has been growing our consumer marketplace of matching families and caregivers, what we call our matching business. Caregivers create their profile, listing their experience and skills. Families then sign up and post a job, listing the hours they need, the rate they want to pay, and whatever else they re looking for. Families then review caregiver applications and profiles for free. In addition to posting a job, families can also search our caregiver database. Care.com offers a full shopping and browsing experience. And if a family wants to contact any of the caregivers they like, we typically charge an access fee, similar to LinkedIn. We charge access fees either monthly, quarterly or annually. These paid plans also include the ability to run a variety of background checks on any caregiver. After their care need is

3 met, they may downgrade to a Basic, or unpaid membership, but they remain engaged with us they read our newsletters and articles, get updates on new caregivers in their area, use our payment services, and reuse the service. When we talk about reuse, we refer to our members who re-upgrade to a paid membership to make another match. So our business model is very transactional. As we invest in better algorithms to improve matching and offer an even greater breadth of care options, we expect the reuse rate and number of transactions on the service to increase over time. I ll provide details of reuse a key driver of our growth - in a minute. Our US Matching revenue grew to $18 million in the first quarter, a 37 percent increase over Q1 of last year driven by member growth, recurring revenue, new product and provider monetization initiatives, and boosted by recurring revenues in our employer program. Pricing has been a small component of our revenue growth, approximately 3% per year, primarily due to inflation adjustments. However list pricing was constant for the quarter compared to Q4. Nearly three quarters of our revenue in the quarter was recurring. Average length of paid time for our 2010 cohort increased to 7.7 months from 6.9 months a year ago. Moreover, our reuse rates continue to grow. For our latest cohorts, we estimate reuse rates are now over 60% driving growth in our transaction like service. We believe that our investments in engagement, user experience and merchandising, such as our Date Night product and better matching algorithms will continue to result in higher reuse and number of transactions, longer average length of paid time, and higher LTV in the future. We introduced a number of new products and provider monetization initiatives in the quarter to drive revenue growth, such as provider-purchased background checks and premium features such as Sitter Spotlight. In the area of mobile, which is growing rapidly, we introduced new releases of our ios and Android apps, and launched enhanced mobile web features. Mobile now makes up half of our US traffic, which grew 36% from the same quarter last year. In addition, we expanded our use of Facebook Connect for social verification and we upgraded BigTent, our community platform, which hosts some of the largest parent groups in the country, and just this morning we announced that we have teamed up with Pinterest on a campaign focused on Mother s Day. Leveraging Pinterest as a home for inspiration and aspirational content, Care.com will unveil numerous boards that inspire, entertain and educate moms. Also included in our US matching business is revenue we generate through contracts with corporate employers, providing access to a comprehensive suite of products and services that are offered as an employee benefit. While still nascent, we believe our Workplace Solutions program is a promising marketing channel with a recurring revenue stream. We estimate there are 4,000 companies in the US, with over 1,000 employees in our target market. Worldwide, we estimate there are another 6,000 companies. Globally, as of Q1 2014, we have 143 corporate clients. This is a SAASlike model where we typically charge employers for access to our caregiver database and last-minute back-up care on a Per-Employee-Per-Year basis. Sales cycles typically

4 peak in Q4, when companies commit benefits programs for the following year. As a result we saw recurring revenue growth in this channel in Q1. We are investing to build our sales team to drive this high ROI channel. Now in addition to helping families address their long-term care needs, Care.com also helps them manage what is often one of their largest budgetary expenses by providing them easy ways to manage and pay their caregivers. Our consumer payments solutions provide families several options to manage their financial relationship with their caregiver through the use of household employer payroll and tax services as well as electronic convenience payments. Revenue related to our consumer payments solutions is primarily generated through quarterly subscriptions. In Q1, Payments revenue grew 37%, to $4 million. Q1 is a peak season for Payments, driven by year-end tax preparation. We continued to see strong cross-sell performance of our platform with 40 percent of new Payments signups coming via Care.com. To take advantage of the tax peak season and these cross -sell synergies, we invested in the integrated marketing of US matching and payments during the quarter resulting in strong growth for both businesses. We are excited about our early success in combining the high ROI payments offering with our core matching businesses as we seek to leverage further synergies across our business. I'd now like to update you on our International business. Our expansion outside the US. is early, having begun in 2012, with our acquisition of Berlin-based betreut.de (which means Care in German). We now offer our service in 16 countries and in seven languages in North America and Western Europe. Access to quality care is a global issue. Our vision is to be truly a global marketplace for Care. With over 95% of the world s households outside of the US, we have numerous of opportunities for growth. We had transitioned our German operation, which is our largest overseas market, to a new platform in May As we continue to transition the website operations for other countries to this common international platform, we anticipate seeing accelerated growth. We have now begun to invest additional marketing dollars in this area although our international business is less mature than our US-based operations, we believe there is a long runway of growth ahead, with attractive long term unit economics. We are just getting started there and look forward to updating you on our progress. We believe that we have a massive market opportunity, and as a result, continue to invest to drive our leadership position in the space. In Q1, we increased our marketing spend as compared to 2013, to take advantage of peak tax season for payments and to prepare for the US matching peak season later in the year. We also spent an incremental $2 million in Q1 in new marketing tactics, including dedicated payments marketing, integrated payments and US matching marketing, and TV testing in Germany. For Q1, our total sales and marketing investment was approximately $20 million, with 78% on direct acquisition spending. Historically, the majority of our direct acquisition spending has been targeted to our US Matching business.

5 In Q1, we introduced integrated marketing programs supporting both US Matching and Payments, taking advantage of business synergies. For example, 62% of our TV ads included a payment element. We have also embedded many of our US matching marketing tactics with payments promotions. In Payments, we increased direct marketing spending in Q1 as planned to coincide with the seasonal tax peak. As we have shared with you in the past, historically, marketing support for the Payments business has been limited. However, given the significant market opportunity and high ROI of 10-15X of this business, we are increasing investment with targeted initiatives. This ROI includes dedicated campaigns, such as print advertising in national news and trade publications, radio, and SEM. And in B2B, including our Workplace Solutions, we are ramping sales teams, as planned, to continue to drive growth and monetize our platform. Of our total Q1 sales and marketing investment, 22 percent was for marketing programs and personnel, including sales teams. Over the course of the year, we expect that percentage to increase, as we ramp our B2B sales teams and reduce direct acquisition investment post peak seasons. We are committed to driving operational leverage and believe that our targeted sales and marketing investments, together with investments in our products, mobile experience and engagement will continue to drive strong and consistent growth while also providing line of sight to profitability over the long-term. And now, I will hand it over, the call, to John to take you through the financial details on the quarter. Thank you, Sheila and good morning, everybody. I'll now review our first quarter financial results, and provide financial guidance for the second quarter and full year Revenue was $25.3 million in the first quarter, an increase of 39% from $18.2 million in the same period last year. GAAP EPS was a loss of $(0.71) in the quarter, including the impact of IPO-related costs, which accounted for $(0.14). Non-GAAP EPS was a loss of $(0.51). We had 21.9 million weighted basic shares outstanding for Q1. Q1 adjusted EBITDA was a loss of $(9.6) million in the first quarter compared to a loss of $(4.3) million in the first quarter of last year. Q1 adjusted EBITDA exceeded our expectations, and reflects key investments in sales and marketing spend that Sheila just mentioned. Q1 Gross Margin was $19.5 million, or 77% of revenue, compared to $13.9 million, or 77% of revenue, in Q1 of last year. For the quarter, total sales and marketing was $20.4 million, or 81% of revenue, compared to $12.9 million, or 71% of revenue in Q1 of last year. Our Q1 sales and marketing spend as a percentage of our full year was higher than in prior years, and we expect that Q2 will be higher as well. Historically, approximately 85 percent of our full year direct marketing investment dollars were spent through Q3, with 40% in Q3, the peak season for our US Matching business. In 2014, we also expect about 85 percent of full year investment to be made by the end of Q3, but we anticipate that the timing will be more evenly allocated across

6 the first three quarters of the year. As revenue ramps across the year, therefore, we expect direct marketing spend to decline as a percentage of revenue. R&D expense was $4.1 million, or 16% of revenue, compared to $2.7 million, or 15% of revenue in the first quarter of We are continuing to invest in high priority areas such as mobile and overall member engagement. G&A expense was $6.2 million, or 25% of revenue, compared to 3.7 million, or 20% of revenue, in the first quarter of As expected, we incurred higher public company costs, and stock based compensation costs and IPO-related expenses in the quarter. We expect to leverage full year G&A as a percent of revenue below prior year. We continue to be very focused on leveraging direct costs and operating expenses, while at the same time investing to drive growth, develop great products, and build operational excellence. Our cash balance was $118.6 million at the end of the first quarter. Our Q1 cash from operations was a $4.1 million use of cash. We added approximately $97 million in cash to the balance sheet in connection with our IPO in late January, net of transaction fees. We issued 6.2 million new shares. As a result of the transaction, we had 21.9 million basic weighted shares outstanding for Q1. In Q2, we expect to have 31 million basic weighted shares outstanding as a result of being public for the full quarter. I d now like to provide guidance for the second quarter and full year We are reporting and providing guidance for EPS on a non-gaap basis, in order to demonstrate the performance of our business excluding the impact of stock-based compensation and non-recurring items such as M&A and IPO expenses. We calculate non-gaap EPS using weighted basic shares for periods in which we have a loss. A reconciliation is provided in the press release: For the second quarter, we expect revenue between $25.5 million and $26.2 million. Adjusted EBITDA loss to be between $(7) million and $(6) million. This includes our planned shift in marketing spend timing. We expect non-gaap loss per basic share to be between $(0.28) and $(0.23) in Q2. For the full year 2014, we expect revenue to be between $109 million and $112 million and we expect adjusted EBITDA loss to be between $(23) million and $(20) million. We expect full year 2014 non-gaap EPS loss to be between $(1.00) and $(0.90). For full year 2014, we expect stock based compensation to be approximately $5 million, and Depreciation & Amortization for the year to also be approximately $5 million. We anticipate an effective tax rate of approximately 2.8%, and weighted basic and fully diluted shares outstanding at year end to be approximately 29.0 million and 31.3 million, respectively. Overall, we are off to a strong start in Our investments in sales & marketing and R&D are driving strong revenue growth across the company. We believe that our investments are positioning us for continued success for the balance of 2014 and beyond.

7 Now I d like to turn the call back to Sheila. Thank you, John. As we close, I d like to recap the priorities for 2014 that we shared with you in our last call. Continue to grow core business. Second, continue to innovate and differentiate our product and platform with an emphasis on mobile. Third, leverage our core assets and further accelerate growth and drive operational excellence. Our Q1 results demonstrate that our strategies are working as we have already delivered strong results in each of these areas. We look forward to continuing to update you on our progress regularly. With that we ll be happy to take your questions. Operator Thank you ladies and gentlemen at this time we will be conducting a Q&A session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Our first question is from the line of Stephen Shin with Morgan Stanley. Please proceed with your question. Stephen Shin: Hi, good morning. Thanks for taking my questions. Did you guys mention what the paying family and paying caregiver metrics were this quarter, and then secondly, I'm trying to understand in terms of the marketing spend, I mean typically what is the lag between when you guys initiate and when people see a campaign and when they become a member and when they convert into a paying member. I'm trying to understand what the effect of changing the pace of marketing spend this year could have on the membership growth. Thanks. Sheila Lirio Marcelo Sure. Thanks Stephen. With regards to our sharing paying families and paying caregivers. As you know as we shared in the road show, our businesses fairly seasonal and what we re focused on is the key drivers of revenue for our business which is certainly influenced by membership, but we think more broadly driven by other things. Such as in our US Matching business that 71% of our revenue was recurring and so we tend to focus, for example in 2010 we've highlighted for the 2010 cohort that the length of paid time went from 6.9 months to 7.7 months and our latest cohorts, 60% reuse rate. So our users are really transacting with the service. We shared our investments in new products, like provider monetization. The other thing that we re learning and with John's help, having joined the Company a year ago, is starting to see how our business is growing and evolving and we are focused on acceleration of driving high ROI

8 payments business that's about 10-15X and as a result, we are seeing this integration of our business and so there is seasonality over our paying family, our paying caregivers that you asked about. But we continue to share our guidance with regards to 25 to 30% membership growth for the year for our US Matching business. With regards to marketing spend; I ll turn that over to actually John. John Leahy: Stephen as we called out in the remarks, we made the decision to shift our marketing spend forward in the year. Almost half of our marketing spend or our acquisition spend historically was directed in Q3 for the US Matching peak, but given the opportunities that we re seeing in payments and the synergy between the two, as Sheila mentioned, about 40% of new members into payments came through Care.com in the quarter. Because we are seeing a lot of synergies there we ve made the decision to do more integrated marketing and so therefore, we ve pulled the spend into the first half. Through Q3, as I mentioned in my remarks, we will in total have spent about 85% of our overall dollars, just like prior years, but we ve pulled the spend forward to really take advantage of driving our payments business, which is a very high ROI, but at the same time starting to do some early seating for the US Matching peak season. Stephen Shin: You guys expect, in terms of the marketing spend, that it is mostly going to help us in terms of converting the basic members into paying members. Is that the bigger effect we should see? I think over all our shared expectation and we've seen it, is that overall conversion of visitors to basics and then eventually to premium, we re maintaining those conversion rates that we have seen in previous years. With an integrated marketing campaign. The other thing Stephen is we are taking advantage of some seasonal hooks so we've taken advantage of Valentine s Day, for example, now that we have a date night product out that is fully integrating, not only finding care, but also finding care but also payments. And then and you should expect in Q2 and we've announced it today, programs where we ve got an integrated campaign with a combination of both TV, Pinterest, Facebook for Mother's Day and you re going to see more of that for us and we re taking advantage of that, that we haven t done in other years. Stephen Shin: Okay and one more if I could. Lastly, I've noticed that there has been a there seems to have been a price increase at least I ve seen--some of the things that I've looked at, was that this quarter, in Q2 that the price increase occurred. Can you help us understand when the last time you guys did increase price and how that ended up affecting memberships and how the kind of price increase rolled

9 through the quarters. Thanks. In fact, we've not done any price increases. We typically expect as we shared in the Road show, price increases have been in the range of 3% annually largely driven by inflation, but this quarter, our list price has remained the same in Q1. What s driving actually, I think what you are implying is the ARPU up, is in fact new product enhancements that we did in provider monetization that includes products like enhanced background checks, and as I shared in my remarks, Sitter Spotlight. As well as taking advantage of our employer program which is a terrific channel for growth. So those are really the key drivers of ARPU and it hasn t been at all a price increase. Stephen Shin: Okay. Thank you. Sure. Operator: Thank you. Our next question is coming from the line of Justin Post with Bank of America Merrill Lynch. Please proceed with your question. Justin Post: Thank you. A few questions. First, can you give us any help with paying members? I guess you could just give us the ARPU increase, if you can kind of estimate that. I ll start with that and then a few follow-ups. John, do you mind addressing that. John Leahy: Sure, Justin, as Sheila mentioned, on the last questions, ARPU did grow during the period, you know, for a number of reasons including background checks, provider monetization, workplace solutions but because of the seasonality of the business, as we've mentioned in in the past, we prefer to talk about unit economics and the key components of unit economics on an annual basis. So ARPU grew nicely and we think that we are still on track for the overall member growth target for the year that we talked about last quarter. Justin Post: Okay. Good and then on marketing. I think you mentioned about 2 million of the

10 spend was kind of new marketing channels so how would, I guess should we think about backing that out when we think about subscriber acquisition costs and then what are you seeing in some of these marketing tests? Are you encouraged by what you are seeing? Yes, we re absolutely very encouraged about the things that we re seeing. I don't know necessarily that it should be backed out, but the way we re starting to think about our business is really an integrated set of campaigns because it's very effective for us to take advantage of the synergies of our Matching and Payments services. If you think about 40% of growth of sign-ups for the Payment s business is coming from Care.com and it's such a high ROI business of X, it makes sense for us to be investing in the product and investing in marketing to help grow both businesses. Justin Post: Okay and my next question was to that point. Payments does have such a high ROI, why not shift more dollars out of the core business towards that? I know you would be giving up some of that ROI as you add incremental sales but how do you think about that mix in the two channels? In fact, we are investing more heavily and that's why 62% of our TV ad spend included Payment component. The way that our service works is, it s helping find care before you are paying for that care. So it makes sense to cross sell and create integrated campaigns together for both businesses and as we shared in the Road Show, we re going after 42 million households and we re only 2% penetrated. So it's targeting a massive pan (ph) so with a combined business of high ROI business with the two coming together with the real synergies, we want to take advantage of that. Justin Post: Okay, great and last one. On the new customer ad, corporate customer ads. Did you add some big clients in the quarter and is that business material to the matching business at this point or what is your outlook on when it could be material? We re very excited about the employer program. We've shared in our remarks that it's up to 143 clients and currently again, we re 2% penetrated with 10,000 businesses that we re targeting with more than 1,000 employees. With our strong results in Q4, the peak season for the benefit programs in HR, we saw strong recurring revenue in Q1 that's driving overall ARPU. We now have 620,000 employees who have access to Care.com. So the way we think about this business, it's only making up about 3% of our business and that was about three

11 sales people in Now we re focused on building up the product in integrating the acquisition of the back of care of parents in a pinch. We believe we will continue to leverage our 4.7 million embedded caregivers. So it makes sense for us to invest and in fact, we currently double the team and expect to triple it this year. So we re going to continue to invest in our Workplace Solution because that's another high ROI business that we re investing in. Justin Post: Great. Thanks a lot. Appreciate the answers. Operator: Thank you. The next question is coming from Douglas Anmuth with JPMorgan. Please proceed with your question. Douglas Anmuth: Great. Thanks for taking the question. I was hoping on the Consumer Matching business you could talk about some of the other products that you've been adding in and sort of bundling some of the things that are increasing ARPU as I think you mentioned 3% in the quarter around background checks and some other things and how aggressively you re pushing those at this point. Then also, can you just talk in more detail about sort of the integration process between Matching and Payments. If we think about the 40% sign up number toward payments coming from Care.com, what kind of expectations do you have where that can go by the end of the year and sort of going forward? Thanks. Sure. So yes, so enhanced background checks and other background check products are offered à la cart. They are certainly a standard background check that comes in with the regular fee, but we do upsell background checks and continue to invest in that since it really supports the overall product experience and our emphasis on trust and safety. Then what we've done is invest in a lot of provider monetization initiatives and I think we announced in Q1. That includes--or sorry last quarter, we included Sitters Spotlight and so this is we re selling access for caregivers to highlight themselves on a per zip code basis and continue to sell that. So very promising products and continuing to invest in provider monetization which you can imagine is a pretty high margin for us. So that continues to be exciting and we continue to grow that. With regards to integrating overall Matching and Payments, John I don t know if you want to comment on that, but we re really looking forward to continuing again to see the synergies there. John Leahy: Yes Doug, we saw continued progress in the quarter in terms of the cross sell from Care.com. In Q4, it was about 37% of new members coming into the payments business through Care.com and in this quarter, 40%. So that really

12 encourages us in terms of the fact that we can continue to grow and have great success with the cross sell. And again, that is a big further reason why in Q1 and Q2, we have pulled forward our marketing spend and directed marketing spend at both payments and payments--and US Matching rather. As you will recall, on the Road Show, we talked about the fact that historically the payments business grew sort of low to mid-teens year in and year out, had very little marketing support behind it. So as we mentioned in the Road Show, and now we are talking about it again today, our full intention is to grow the level of investment behind payments and now with our active two businesses are becoming more closely intertwined, really drive that cross sell opportunity. Douglas Anmuth: Okay, thanks and just one follow-up if I could on mobile. Sheila I think you mentioned that half of your traffic now is coming through mobile. Clearly a lot of emphasis there on the product side and building out the Apps. Can you talk about the sort of the benefits and challenges in the way that mobile presents and then also what products there do you think you are mostly excited about as you roll them out recently. Thanks. Sure. You know half of our US. traffic, as I mentioned in my remarks, does come from mobile devices and it s a significant increase over last year, which is really exciting Doug to see this growth is fulfilling I need for parents on the move. So whether they re on a commuter train or on a soccer field, we re there for families whenever or wherever they need care. We are also seeing increasing engagement through our mobile Apps. We just launched product enhancement in our IOS and Android Apps. Everything from peer-to-peer payments, we are building and taking advantage of geolocation with some future enhancements you will be seeing soon. And the way we really think about mobile, it s very similar to Netflix. We don't think about the specific devices with monetization strategies. It would have to be a seamless express for both mobile and desktop whenever moms needed. Because the way we think about it is whether you re, as I mentioned, on the soccer field or late at night with your hair on fire and you re trying to look for Care on your desktop, we've got to make sure that we re delivering the service whenever you need it. Douglas Anmuth: Okay. Thank you. Operator: Thank you. Our final question of the day coming from the line of Jordan Rohan with Stifel. Please receive with your question. Jordan Rohan: Thank you so much. A lot of my questions have been taken, but I want to put a finer point if I could and I totally understand John that you really don't want to give

13 out this number, but if ARPU for the Consumer Matching business is up 3% or a constant, because I did hear the word constant in the prepared remarks, then your net member additions would be between--i don't know about 14,000 for the quarter and your ending period members would be something like 174,000. Do I have that right? That's assuming a 3% increase in ARPU and then secondly, the annual subscription fee for the payments business is this still at the thousand dollar level and there had been some discussion about offering a different level of service for payments offerings that maybe carried a subscription price significantly lower than that. Can you update us on what that mid-level offering might be and when it's coming out and what the details might be? Thank you. John Leahy: Hi Jordan, I ll tackle the first one. Just to clarify, when Sheila mentioned ARPU, we were talking about historically it has grown about 3% per year. So basically at the rate of inflation and there's always price and price testing going on in certain cells. So for this quarter, we re just saying that ARPU did grow nicely but we really think because of the seasonality that it's more appropriate to talk about elements of unit economics on an annual basis. But just to your member question, to Sheila's earlier point in the script, our target for this year is to grow members by the end of the year somewhere between 25 to 30%, and we are on track for that type of growth rate. Sheila do you want to handle the Yes I will and I just again to clarify that yes, so that ARPU 3% range was really for the annual due to inflation, but we are not actually sharing today necessarily the ARPU increase, just to clarify. With regards to the mid-tier products on payments, we continued -- we have been testing that product and it's still fairly early and (inaudible) for that business, but obviously we re excited given the progress we ve seen on the $1,000 product and the kind of conversions that we re seeing and the cross sell synergies for our platforms since it is a muchneeded service for families. Jordan Rohan: All right, thank you very much. Operator: Thank you. Ladies and gentlemen, we have reached the end of our question and answer session. I would now like to turn the floor back over to Ms. Marcelo for closing comments. We will now wrap up the call. Thank you all for joining us today. We look forward to speaking with you in the coming days and weeks. Operator:

14 Thank you ladies and gentlemen this does conclude today's teleconference. Thank you for your participation and you may disconnect your lines at this time.