Rover fetches strong earnings
Rover (Nasdaq: ROVR), the pet care company that rose to prominence during the pandemic, is profitable.
Driving the news: Rover shares have climbed ~20% this week after it raised its revenue and adjusted its profit forecast for the year after reporting a 30% revenue increase and that it swung to a profit.
How it works: The company offers dog boarding, housesitting, drop-in visits, doggy day care and dog walking.
- "We still view ourselves as somewhat early in the development of the category," CEO Aaron Easterly says.
Zoom in: Many of its users, even first-time ones, will often become customers of its other services, Easterly says.
- "If you can find a sweet spot where it's an opportunity to go and acquire new customers with the new offering, as well as better serve our existing customers, it's definitely a win," Easterly says.
What's next: Rover is interested in adding services to its platform, such as grooming, training, and different kinds of pet adoption, Easterly says.
- Health and wellness is another area it's interested in.
Yes, but: Easterly says it won't shy away from M&A to get there, but the company hasn't participated in the market because of price.
- There's a valuation dynamic taking shape, particularly for companies funded at high valuations, that's stalling M&A overall, he says.
- "The price that they were hoping or thinking their business is worth is maybe not that way anymore," he says.
State of play: The pet industry is projected to grow to about $500 billion in 2030 from $320 billion today, according to Bloomberg Intelligence.
- The growth, largely due to an increasing pet population and stronger demand for premium services because pet owners view their pets as children, has driven a wave of investment.
- Earlier this year, the company invested in Seattle-based vet care service Felix&Fido's $4 million seed round.
- In 2022, it acquired Good Pup, an early-stage company that provides video-based training services for dogs.
- DogBuddy, Dog Vacay and Zingy Pet was also brought under its fold over the past few years.