Rover : Q3 2023 Financial & Non-GAAP Reconciliation Supplement

Q3 2023 financial & non-GAAP reconciliation supplement

Legal disclaimer

See slides 5 - 9 for Rover's historical generally accepted accounting principles ("GAAP") results, including net income (loss), revenue, cost of revenue, operating expenses and cash provided by (used in) operating, investing and financing activities, slides 10 - 11 for a reconciliation of historical GAAP net income (loss) to Adjusted EBITDA and historical GAAP net income (loss) margin to Adjusted EBITDA margin, and slides 12 - 18 for a reconciliation of the other non-GAAP measures to their most directly comparable GAAP measure.

In addition to results determined in accordance with GAAP, this presentation contains the historical non-GAAP financial measures Adjusted EBITDA, Adjusted EBITDA margin, Non- GAAP Contribution, Non-GAAP Contribution margin, Non-GAAP operations and support expense, Non-GAAP marketing expense, Non-GAAP product development expense, Non-GAAP general and administrative expense, and Free Cash Flow that we publicly disclose from time to time in earnings call and elsewhere. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. Rover believes that the use of these non-GAAP financial measures provides useful information to investors and others in understanding and evaluating Rover's operating results and, in the case of Free Cash Flow, Rover's liquidity. Non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of Rover's results as reported under GAAP. For more information on: (1) how Rover defines and uses Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP Contribution, Non-GAAP Contribution margin, Non-GAAP operations and support expense, Non-GAAP marketing expense, Non-GAAP product development expense, and Non-GAAP general and administrative expense; (2) why Rover considers these important measures; and (3) their limitations, see the section titled "Non-GAAP Financial Measures" in Rover's earnings release dated November 6, 2023, and the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures" in its Quarterly Report on Form 10-Q to be filed for the quarter ended September 30, 2023.

Beginning with the three 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 months ended June 30, 2023 and the nine months ended September 30, 2023. Rover did not have any impairment loss on intangible assets and goodwill or record any employee retention credit during the nine months ended September 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.

On our earnings calls, we provide Adjusted EBITDA and Adjusted EBITDA margin guidance and occasionally discuss long-term targets or near-term expectations for non-GAAP measures such as Adjusted EBITDA margin, Contribution margin, and non-GAAP operating expenses (on both a dollar and a percentage of revenue basis). We have not provided the most directly comparable forward-looking GAAP measure to these forward-lookingnon-GAAP financial measures or a reconciliation of these forward-lookingnon-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, gain or loss from equity method investments, and cost of revenue. 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-lookingnon-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 the Rover's control, Rover is also unable to predict their probable significance. Rover's management also believes that it is not feasible to provide accurate forecasted reconciliations for long-term targets for non-GAAP measures as those targets are not tied to any specific time period.

All key business metrics, all interim period financial measures, and all non-GAAP financial measures presented in this presentation have not been audited.

2

Quarterly key business metrics

					Three Months Ended
(unaudited)	Mar 31,	Jun 30,	Sep 30,	Dec 31,	Mar 31,	Jun 30,	Sep 30,	Dec 31,	Mar 31,	Jun 30,	Sep 30,
2021	2021	2021	2021	2022	2022	2022	2022	2023	2023	2023

(Bookings and Users in thousands, dollars in millions,

and ABV and per-user metrics in units)

Bookings: (1)
New bookings		102		228		259		215		179		260		267		233		208		279		290
Repeat bookings		541		848		1,008		998		984		1,188		1,234		1,217		1,268		1,459		1,517
Total bookings		643		1,076		1,267		1,213		1,163		1,448		1,501		1,450		1,476		1,737		1,807
GBV (2)	$	64.7	$	134.1	$	157.1	$	166.0	$	153.7	$	212.8	$	213.7	$	218.1	$	209.4	$	266.1	$	266.4
ABV (3)	$	101	$	125	$	124	$	137	$	132	$	147	$	142	$	150	$	142	$	153	$	147
Total active users (4)		276		514		602		567		518		684		718		679		645		804		844
GBV per user	$	234	$	261	$	261	$	293	$	297	$	311	$	298	$	321	$	325	$	331	$	316
Recognized take rate (5)		22.9 %		21.8 %		21.0 %		21.1 %		22.0 %		21.9 %		22.4 %		22.1 %		23.2 %		23.3 %		23.6 %
Cancellation rate (6)		10.8 %		11.9 %		15.3 %		16.0 %		12.7 %		14.1 %		14.2 %		14.6 %		11.6 %		12.7 %		13.3 %
Deferred revenue	$	3.4	$	8.2	$	6.0	$	3.1	$	9.1	$	12.4	$	9.4	$	5.5	$	12.9	$	16.4	$	13.1
Cash, cash equivalents, and restricted cash	$	81.8	$	103.4	$	290.3	$	278.9	$	154.1	$	123.3	$	65.5	$	58.9	$	76.1	$	193.0	$	132.8
Short-term investments	$	-	$	-	$	-	$	-	$	97.9	$	140.5	$	169.1	$	191.3	$	176.4	$	71.0	$	74.8
Long-term investments	$	-	$	-	$	-	$	4.3	$	29.6	$	24.6	$	31.0	$	22.5	$	12.1	$	5.2	$	26.9
Total debt	$	37.6	$	37.7	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

1. 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.
2. 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.
3. ABV, or average booking value, defined as GBV divided by Total bookings
4. Active user defined as unique pet owner with at least one booking in period
5. Recognized take rate defined as (Revenue + change in Deferred Revenue) divided by GBV
6. Cancellation rate defined as Cancelled booking value divided by GBV

3

Full year key business metrics

	Year Ended December 31,
(unaudited)	2021		2022
	(Bookings and Users in thousands, GBV dollars
	in millions, and ABV and per-user metrics in units)
Bookings: (1)
New bookings		804		939
Repeat bookings		3,395		4,622
Total bookings		4,199		5,561
GBV (2)	$	521.9	$	798.4
ABV (3)	$	124	$	144
Total active users (4)		1,286		1,652
GBV per user	$	406	$	483
Recognized take rate (5)		21.5 %		22.1 %
Cancellation rate (6)		14.1 %		14.0 %

1. 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.
2. Gross Booking Value, or GBV, represents the dollar value of bookings on our platform 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.
3. ABV, or average booking value, defined as GBV divided by Total bookings
4. Active user defined as unique pet owner with at least one booking in period
5. Recognized take rate defined as (Revenue + change in Deferred Revenue) divided by GBV
6. Cancellation rate defined as Cancelled booking value divided by GBV

4

Quarterly Results of Operations

										Three Months Ended
(unaudited)		Mar 31,		Jun 30,	Sep 30,	Dec 31,	Mar 31,		Jun 30,	Sep 30,	Dec 31,		Mar 31,		Jun 30,		Sep 30,
	2021		2021		2021		2021		2022		2022		2022		2022		2023		2023		2023
										(in thousands)
Revenue	$	12,196	$	24,482	$	35,153	$	38,006	$	27,824	$	43,371	$	50,864	$	51,951	$	41,120	$	58,529	$	66,203
Costs and expenses:
Cost of revenue (exclusive of depreciation and		4,176		6,283		8,036		8,042		7,848		10,521		11,607		11,082		10,780		12,608		13,634
amortization shown separately below)
Operations and support		2,233		3,482		4,199		5,013		5,355		6,485		7,425		7,536		7,029		7,800		8,156
Marketing		2,666		4,462		6,403		6,405		7,331		11,027		8,686		9,763		9,338		13,379		12,684
Product development		4,468		5,086		5,033		8,126		6,633		6,647		7,100		7,149		7,297		8,301		8,566
General and administrative		6,636		5,732		8,899		14,293		11,540		11,477		30,599		12,178		12,362		13,679		13,599
Depreciation and amortization		1,850		1,849		1,873		1,754		1,696		1,175		1,561		1,506		1,478		1,476		1,189
Impairment loss on intangible assets and goodwill		-		-		-		-		-		-		-		-		-		6,916		-
Total costs and expenses		22,029		26,894		34,443		43,633		40,403		47,332		66,978		49,214		48,284		64,159		57,828
(Loss) income from operations		(9,833)		(2,412)		710		(5,627)		(12,579)		(3,961)		(16,114)		2,737		(7,164)		(5,630)		8,375
Other income (expense), net:
Interest income		4		4		19		22		139		658		1,287		1,890		2,423		2,991		3,152
Interest expense		(697)		(703)		(1,534)		(18)		(18)		(24)		(19)		(19)		(18)		(18)		(15)
Change in fair value of other investments		-		-		-		-		-		-		-		598		314		801		-
Change in fair value of earnout liabilities		-		-		(71,318)		25,304		-		-		-		-		-		-		-
Change in fair value of derivative warrant liabilities		-		-		(12,261)		14,350		4,579		-		-		-		-		-		-
Other income (expense), net		(51)		(26)		(116)		(91)		(256)		(532)		(257)		428		104		2,024		(568)
Total other income (expense), net		(744)		(725)		(85,210)		39,567		4,444		102		1,011		2,897		2,823		5,798		2,569
Loss (income) before income taxes and equity method		(10,577)		(3,137)		(84,500)		33,940		(8,135)		(3,859)		(15,103)		5,634		(4,341)		168		10,944
investments
Benefit from (provision for) income taxes		(14)		331		(36)		(55)		(11)		227		(44)		(90)		(1)		(70)		(128)
Loss from equity method investments, net of tax		-		-		-		-		-		-		(325)		(273)		(314)		(351)		(316)
Net (loss) income	$	(10,591)	$	(2,806)	$	(84,536)	$	33,885	$	(8,146)	$	(3,632)	$	(15,472)	$	5,271	$	(4,656)	$	(253)	$	10,500

5

YTD & full year Results of Operations

	Nine Months Ended September 30,			Year Ended December 31,
(unaudited)	2022			2023			2021		2022
				(in thousands)
Revenue	$	122,059	$	165,852	$	109,837	$	174,010
Costs and expenses:
Cost of revenue (exclusive of depreciation and		29,976		37,022			26,536		41,058
amortization shown separately below)
Operations and support		19,265		22,985			14,928		26,801
Marketing		27,044		35,401			19,937		36,807
Product development		20,380		24,164			22,712		27,529
General and administrative		53,616		39,640			35,559		65,794
Depreciation and amortization		4,432		4,143			7,327		5,938
Impairment loss on intangible assets and goodwill		-		6,916			-		-
Total costs and expenses		154,713		170,271			126,999		203,927
Loss from operations		(32,654)		(4,419)			(17,162)		(29,917)
Other income (expense), net:
Interest income		2,084		8,566			49		3,974
Interest expense		(61)		(51)			(2,952)		(80)
Change in fair value of other investments		-		1,115			-		598
Change in fair value of earnout liabilities		-		-			(46,015)		-
Change in fair value of derivative warrant liabilities		4,579		-			2,089		4,579
Other income (expense), net		(1,045)		1,560			(284)		(617)
Total other income (expense), net		5,557		11,190			(47,113)		8,454
Loss (income) before income taxes and equity method		(27,097)		6,771			(64,275)		(21,463)
investments
Benefit from (provision for) income taxes		172		(199)			226		82
Loss from equity method investments, net of tax		(325)		(981)			-		(598)
Net (loss) income	$	(27,250)	$	5,591		$	(64,049)	$	(21,979)

6

Statement of Cash Flows

	Year Ended December 31,
(unaudited)	2021		2022
		(in thousands)
OPERATING ACTIVITIES
Net loss	$	(64,049)	$	(21,979)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation		11,061		19,059
Depreciation and amortization		14,683		12,890
Non-cash operating lease costs		2,062		2,584
Change in fair value of other investments		-		(598)
Change in fair value of earnout liabilities		46,015		-
Change in fair value of derivative warrant liabilities		(2,089)		(4,579)
Net (accretion) amortization of investment (discounts) premiums		-		(1,509)
Amortization of debt issuance costs		712		-
Deferred income taxes		(272)		(394)
Loss on disposal of property and equipment		64		42
Loss from equity method investments		-		598
Changes in operating assets and liabilities:
Accounts receivable		(23,024)		(27,109)
Prepaid expenses and other current assets		(3,126)		(599)
Other noncurrent assets		(24)		9
Accounts payable		3,738		27
Accrued expenses and other current liabilities		4,060		18,137
Deferred revenue and pet parent deposits		22,663		14,898
Pet care provider liabilities		4,754		(7,574)
Operating lease liabilities		(2,307)		(2,656)
Other noncurrent liabilities		(587)		405
Net cash provided by operating activities		14,334		1,652

7

Statement of Cash Flows cont.

	Year Ended December 31,
(unaudited)	2021			2022
		(in thousands)
INVESTING ACTIVITIES
Purchases of property and equipment		(881)		(614)
Capitalization of internal-use software		(6,340)		(7,563)
Proceeds from disposal of property and equipment		24		1
Acquisition of businesses, net of cash acquired		-		(5,858)
Purchases of convertible notes		-		(1,810)
Purchases of available-for-sale securities		(4,293)		(308,106)
Maturities of available-for-sale securities		-		98,986
Net cash used in investing activities		(11,490)		(224,964)
FINANCING ACTIVITIES
Proceeds from exercise of stock options and issuance of common stock		6,505		6,618
Redemption of stock warrants		-		(7)
Taxes paid related to settlement of equity awards		(8,673)		(3,248)
Proceeds from reverse recapitalization and related financing		268,282		-
Payment of deferred transaction costs related to reverse recapitalization		(32,743)		-
Repayment of borrowings on credit facilities		(38,124)		-
Net cash provided by financing activities		195,247		3,363
Effect of exchange rate changes on cash and cash equivalents		(35)		(80)
Net (decrease) increase in cash and cash equivalents		198,056		(220,029)
Cash and cash equivalents, beginning of year		80,848		278,904
Cash and cash equivalents, end of year	$	278,904	$	58,875

8

Statement of Cash Flows cont.

	Year Ended December 31,
(unaudited)	2021		2022
		(in thousands)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income taxes, net of refunds	$	5	$	45
Cash paid for interest		2,511		9
NON-CASH INVESTING AND FINANCING ACTIVITIES
Right-of-use assets obtained in exchange for lease liabilities (excluding those		757		17
recognized upon initial adoption of ASC 842)
Conversion of redeemable convertible preferred stock to common stock		290,427		-
Earnout liability recognized upon the closing of the reverse recapitalization		228,082		-
Derivative warrant liabilities recognized upon the closing of the reverse		22,032		-
recapitalization
Reclassification of earnout liabilities to additional paid-in-capital		274,097		-
Reclassification of certain derivative warrant liabilities to equity upon exercise		-		15,356
Recognition of indemnity holdback liabilities upon acquisition of businesses		-		1,489
Stock-based compensation capitalized to internal-use software		-		1,194

9

Quarterly Adjusted EBITDA reconciliation

										Three Months Ended
(unaudited)		Mar 31,		Jun 30,		Sep 30,		Dec 31,		Mar 31,		Jun 30,	Sep 30,		Dec 31,		Mar 31,		Jun 30,		Sep 30,
	2021		2021		2021		2021		2022		2022	2022		2022		2023		2023		2023
								(in thousands, except for percentages)
Revenue	$	12,196	$	24,482	$	35,153	$	38,006	$	27,824	$	43,371	$ 50,864	$	51,951	$	41,120	$	58,529	$	66,203
Adjusted EBITDA reconciliation:
Net income (loss)	$	(10,591)	$	(2,806)	$	(84,536)	$	33,885	$	(8,146)	$	(3,632)	$ (15,472)	$	5,271	$	(4,656)	$	(253)	$	10,500
Add (deduct):
Depreciation and amortization (1)		3,569		3,608		3,638		3,868		3,428		2,897	3,309		3,256		3,234		3,292		3,116
Stock-based compensation expense (2)		1,001		1,147		994		7,919		4,310		4,834	4,881		5,034		4,505		5,938		5,993
Interest expense		697		703		1,534		18		18		24	19		19		18		18		15
Interest income		(4)		(4)		(19)		(22)		(139)		(658)	(1,287)		(1,890)		(2,423)		(2,991)		(3,152)
Change in fair value, net (3)		-		-		83,579		(39,654)		(4,579)		-	-		(598)		(314)		(801)		-
Other (income) expense, net		51		26		116		91		256		532	257		(428)		(104)		(2,024)		568
Benefit from (provision for) income taxes		14		(331)		36		55		11		(227)	44		90		1		70		128
Loss on equity method investments, net of tax (4)		-		-		-		-		-		-	325		273		314		351		316
Acquisition and merger-related costs (5)		905		151		1,280		220		80		410	168		158		-		-		-
Transaction-related expenses (6)		-		-		-		1,263		-		-	-		-		-		-		-
Legal settlements (7)		-		-		-		-		-		-	18,000		-		-		-		-
Impairment loss on intangible assets and goodwill (8)		-		-		-		-		-		-	-		-		-		6,916		-
Adjusted EBITDA	$	(4,358)	$	2,494	$	6,622	$	7,643	$	(4,761)	$	4,180	$ 10,244	$	11,185	$	575	$	10,516	$	17,484
Net income (loss) margin (9)		(86)%		(12)%		(239)%		89 %		(29)%		(8)%	(30)%		10 %		(11)%		0 %		16 %
Adjusted EBITDA margin (10)		(36)%		10 %		19 %		20 %		(17)%		10 %	20 %		22 %		1 %		18 %		26 %

1. Depreciation and amortization include amortization expense related to capitalized internal use software, which is recognized as cost of revenue (exclusive of depreciation and amortization shown separately) in the consolidated statement of operations
2. Stock-basedcompensation 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 Earnout Shares and Warrant liabilities in connection with the deSPAC transaction and the change in fair value of an equity method investment
4. The loss from equity method investments for the periods presented do not include income taxes as the equity method investee has not yet incurred any such taxes
5. Acquisition and merger-related costs include accounting, legal, consulting, and travel-related expenses incurred in connection with the Caravel merger and other business combinations
6. Transaction-relatedexpenses include costs related to our secondary offering in the fourth quarter of 2021
7. Legal settlements includes the amount we accrued for a binding settlement term sheet executed in October 2022 related to worker classification claims
8. Impairment loss on intangible assets and goodwill includes the full write-off of intangible assets and goodwill related to GoodPup
9. Net income (loss) margin is net income (loss) for a period divided by revenue for the same period
10. Adjusted EBITDA margin is adjusted EBITDA for a period divided by revenue for the same period

10