OpenTable Inc. (
reported earnings of 37 cents in the third quarter of 2013, which
comprehensively beat the Zacks Consensus Estimate by 8 cents and
surged 27.6% from the year-ago quarter. The strong year-over-year
growth was driven by robust top-line performance.
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Revenues surged 17.5% year over year to $46.7 million and were
slightly better than the Zacks Consensus Estimate. The
year-over-year growth was driven by 27.1% surge in reservation
revenues (60.0% of revenues) and 10.8% increase in subscription
revenues (34.0% of revenues).
North America revenues jumped 17.7% from the year-ago quarter to
$40.6 million, driven by strong growth in both reservation and
subscription revenues. OpenTable's recent acquisition Rezbook
contributed $0.5 million in revenues. International revenues
increased 15.9% year over year to $6.1 million.
Installed restaurants were 30,964 compared with 26,360 at the end
of the year-ago quarter. The acquisition of Rezbook added 2,398
restaurants during the quarter. Total seated diners were 38,514K
compared with 29,740K reported at the end of the year-ago
quarter. Rezbook contributed 773,000 seated diners in the
It was interesting to note that approximately 41.0% of the North
American seated diners made reservations on a mobile device
during the quarter.
OpenTable reported adjusted earnings before interest, taxes,
depreciation, and amortization (EBITDA) of $20.0 million compared
with $17.5 million in the year-ago quarter.
Total operating costs and expenses as percentage of revenues
increased 120 bps from the year-ago quarter to 78.1% as a 230 bps
decline in general and administrative expense was offset by a 100
bps, 90 bps and 170 bps rise in operations and support, sales and
marketing and technology related expenses, respectively.
Higher level of investment hurt profitability as OpenTable
reported operating margin (including stock based compensation but
excluding one-time items) of 25.8%, down 10 bps from the year-ago
Net income margin increased 190 bps from the year-ago quarter to
18.9%, primarily due to lower tax rate.
OpenTable exited the third quarter with $102.8 million in cash
& cash equivalents.
OpenTable expects revenues to be in the range of $50.7 million to
$52.1 million for the fourth quarter of 2013. North American
revenues are expected to be around $43.1 million to $44.1
million, while International revenues are likely to be within
$7.6 million to $8.0 million.
For the fourth quarter, adjusted EBITDA is expected to be in the
range of $21.9 million to $23.3 million, while earnings are
expected to be in the range of 49 cents to 53 cents.
For full year 2013, revenues are expected to be in the range of
$188.5 million to $189.9 million. North American revenues are
expected to be around $162.9 million to $163.9 million, while
International revenues are expected in the range of $25.6 million
to $26.0 million.
For 2013, adjusted EBITDA is expected to be in the range of $80.8
million to $82.2 million, while earnings are expected to be in
the range of $1.94 to $1.98 per share.
OpenTable offers mobile and web solutions that enable users to
book restaurant tables. The company reported an impressive third
quarter and provided positive fourth quarter and full year
guidance. We believe that the strong growth in mobile user base
is a significant growth opportunity for the company going
Moreover, OpenTable continues to expand in the overseas markets,
which will boost top-line growth. Additionally, continuing
investments in marketing activities will boost traffic going
forward. However, these investments will keep margins under
pressure in the near term.
Currently, OpenTable has a Zacks Rank #3 (Hold). Other stocks
that are performing well at current levels include
Support.com Inc (
Callidus Software (
. All these stocks carry a Zacks Rank #1 (Strong Buy).