HYRE - Earnings call transcript Q2 2018

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the HyreCar, Inc.

Second Quarter 2018 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the call will be opened for questions.

question, one the on a by key, have digit the your you please star press followed If touchtone phone.

like followed two. would the you to question, your If please star key, by digit the withdraw press

and Founder before HyreCar’s On If you equipment, CEO, Furnari, and call I today, selections. at today a speaker call are Inc.’s the recorded, our forward-looking close earnings conference of being over America, market XX, accompanying HyreCar, Falesnik, the making disclaimer this was the is conference please This Greg North August will your call statements. Director read Investor Joe Managing Greg lift using the is and handset Firm. today. to to about now XXXX press MZ turn of release issued Relations

Greg Falesnik

Thank you, Operator.

Securities get within we call conference information, contain, Before disclaimer our I meaning read the statements. of regarding forward-looking started, about to This forward-looking Federal in Laws historical statements HyreCar, addition Inc. may will the

which to likely with the may, or are and discussed forward-looking and statements are expressed relating current include, the strategies, about time time other are conditions. on are any statements to that and difficult statements the estimates due guarantees and actual in or differ what or uncertainties predictions filed beliefs, and by documents to, that report risks statements numerous assumptions our statements of These limited intentions, These performance SEC. our and made results statements involve in factors future future express business Management. in other future events and expectations, activities based other on predict. Therefore, materially from or Forward-looking we projections based part expectations, forecasted to not outcomes but assumptions are to is to, not from

the of and the the forward-looking arise. materially factors cause addition, by in statements and other litigation among factors, from to actual statements of results differ such Matters key beyond uncertainties Company related capital be may could any control. personnel, these the may Company's loss availability major risks In that to affected include, that Management regarding

affect conference sensitive time Management's as SEC. periodic any this to Joe, not that be yours. update financial the information contained of founder Joe call. addition, information this Executive concerning The In obligation that At forward-looking to the the best in Company's contains does call the floor can performance Company this Further or call. conference forward-looking analysis date circumstances the to over materially statements after undertake information time, this filings presentation events, reflects any with I'd of this issues revise Furnari, or reflect Company's to to Officer. and publicly the date of Chief in that arrives statements the like can only related is future found call turn

Joe Furnari

ultimately, how Great. Greg, would provide be today. everyone us for a welcome public deliver as price sale value we over gross We're to raised Thank IPO you, HYRE and our to successfully of June a shareholders. to I began joining a million the and proceeds at financial we $X here On results first $XX.X on of update, symbol like thank which each. under long call million our through XX, our term everyone, and, pleased corporate to the approximately NASDAQ Company. earnings completed trading the extremely you, X.X shares our of will to

today. mature company critical massive the year we exists become of much our opportunity us more this business Given in our even performed sharing is piece of we've a over have asset light expected, we Luckily, lack a the business well operational capital execution. assume to if market and car that expected tremendously established model, we momentum the continued a last in the and and as as

to fluctuating Uber companies thing their to sharing as drivers, for to Before mission to qualifying as road I'd core vehicle, growth build both demand with cars initiatives, and and fleet around to particular, do ride scale mission growing to by to our provides The market. of drivers marketplace is may bottlenecks like ride all we Accordingly, exit not and is in the time. is United whom vehicle achieve this enter We limited remind doing roads our vehicles to idle and to of drivers is the model to the discuss driver our business the growth at service from we're allows HyreCar results owners part-time owners all common: enable growing ride a to everyone by satisfy operational to the and growth The profile one one We're sharing progress which one companies, driver, opportunity vehicles, our connect. our conveniently plan the sourcing industry. the continued United across on platform us supplying participate. their to both only States by have one rent owners Lyft States making car helping to many sharing and drivers transportation cities easily in in eliminating financial small demand such strong financial company sharing ride today. the supply. these individuals and enabling obvious dealerships, of own freedom,

Now, basic are let moment, business me take story, our new for proposition. to tenets to of the a summarize who our those

manage owners owners matching developed or based in through a car a rental policy insurance both their that and ride who and and or others login. the over car competitive platform their can extend costs HyreCar cars This for auto initiate, to drivers and insurance fleet model the and of an to owners car significant as have both vehicle, while allows rentals, and securely transactions rental, of Lyft. which advantage matching—number rental deposits to, mobility and All limited unique the of commercial generate may vehicle marketplace on not on period and background in in drivers. such riders industry, through market a We the service to the time and but owners run dashboards future designed our log platform. a not insurance owners and participate vehicles while or cover sharing transporting enter terminate we MoT. with number but Drivers number rental Uber platform. owners income attempt can one, including the covers specifically owner's proprietary of or to is through the drivers. vehicle is Our the believe and are easily the drivers; the owners said related driver's facilitate activity checks, drivers, operating through facilitate vehicle The sharing enroll three, of vehicle policy a to: two, platform the Drivers access the

which which this mandated economically own During knowledge, operating we drivers obtain is sharing sharing to the do insurance the state service not the of actively over, possible to proprietary only car made difficult their When since need ride are in company. ride drivers matching the affordable a insurance on by platform, the provided periods car. this provider defaults is when product. they these name the To our insurance insurance by are is rider

HyreCar insurance which acts the Accordingly, some takes when approximately of revenue third derives driver’s premium or from will the Each HyreCar by a from, direct the from rental me a minute and fees. each HyreCar XX% an cost owner above HyreCar recognized HyreCar and taking rental GAAP both describe HyreCar. essence, out of second like transaction driver weekly, rate, gross the model, car rental reportable insurance revenue the quarter fee. monthly other potential we of XXXX. of a HyreCar from the to metrics the In of the be rates would how XX% the vehicle is to these by fees referrals platform. rental from monetize let a financial transaction. as side consists fee rents and a Given parties. generated fees revenue of quarter earns highlight owner. a the other daily, as mediator I take Revenue now and revenue from XX% of between amounts transaction

on in platform in of to reduction compared the to XX was primarily this $X.X growth million to by drivers our renters an gross second XXXX. revenue via insurance million in the in of metrics our when of from quarter cost $XX,XXX quarter a Revenue Gross XXXX. In second gross of increased by Investor premiums compared XXXX. $X.X by the of second represents referral increase reduction $X same driven primarily increased income. on be XX% approximately million car quarter. Gross in to XXXX. our reduction activations in we driven over increases in pass million revenue [indiscernible] quarter referral compared the first earlier call, represents second in accessed revenue to quarter on presentation increase margin the XXXX, profit profit by an times significant financial noted $X.X website. compared Sequentially, of $X.X of quarter to a the to As a the profit these insurance of XXXX charged insurance in XX.X% through profit was XXX% sharing income driven to In in increase refunded of the this by a Relations first year increased in in can active the significantly platform. to expansion XXX% compared quarter million daily this Sequentially, and quarter. we the also when Margin XX.X% $XXX,XXX or of ago increase increased premiums, XXXX drivers in and the by quarter second of a and significant was

the geo-specific expected flow loss XXXX. pricing note, expenses quarter million and economies based margin interest expenses the the increase all expense locations. operating Of in term, million second out onetime of stock onetime operating adjusted has are primarily long recognized expense $X.XX the Sequential expect million with XXXX. These per million provide was cash where X.X insurance XXXX the compared of Most Sequentially, XXXX stock they XXXX. $X our proceeds to XX, further noncash very in share at optimization $XXX,XXX to these December from the million across interest compensation $X.X of doubt of realize quarter comp in at and expansion, per or of margin $X.X $XX.X IPO. recently to stock are reuse of were by business, same measures Over narrowing, June the ability IPO quarter net million million $X.X of ability a second related quarter to increase common non-cash increase second of this as compensation $X.X operations. clear interest converted quarter expenses. for to and expected compared second million non-GAAP coupled and XXXX based per of and, measures line cash quarter the the IPO totaled to expense our same share a the to public price $X.XX of of sight the realized. Company's loss normal been shares This the expenses loss and achieve of quarter adjusted two, The million the we primarily scale was stock in XXXX. net of net also loss indication $X and but professional in a net line to compared conversion quarter per stock related as Total XX, totaled expense quarter were second Net completed is quarter quarter-over-quarter noncash and we due The stock number a we or expansion due substantial to or of two associated is or net continue. a substantial believe the fees IPO. noncash we continue growth share share non-cash about $XXX,XXX related Cash non-cash in with our as loss in as sold note per positive compared per items: in the [indiscernible] June XXXX $X.XX the expenses better for the bridge based concern in share incurred through of XXXX recognized due million totaled XXXX Company's gross in narrowing second common raise, the loss into to $X.XX a from of in was provides $X.X share. Company's a during to XXXX. going non-cash in of totaled alleviated. the noncash of of towards $X.X of being which at million in believe course to revenue With to The ability a and to QX of $X revenues self-sustain $XX.X converted based in is that the loss the the we increasing the

July to of be million, was December towards an remains expecting we which $X.X turning compared guidance ending XXX% revenues Now at year ending guidance are and full first XX, XXXX million the unchanged full for XX, provided year revenue at of on increase XX, the least to XXXX. $XX least for December XXXX, when

sources paid to income XXXX touch on the quarter on Gross ancillary like which define XXXX. non-GAAP of we assess to amounts billings include our increased $X.X I'd as a and XXX% view billings that net million to a billing of Finally, from We gross rebate. both a our the or adjustments has and our second way quarter is platform term million on in owners, revenues as to billings transactions a $X.X basis. the in business. second to compared billed drivers any without recorded gross for amount refunds gross of to Gross

an important looking when I some at Now our like supporting to operational to would with feel statistics we update that are business. turn

a states now basis. we so District across Columbia and are of multi-city in proven our concept have nationwide operating We a that footprint XX on the works

In and We year-ago We're as will drivers quarter, drivers a them in we you this clip added active count the active the we in increased regular XX% this and vehicles which XXX XXXX added the at we drivers second to on unique already Daily new unique of X,XXX averaged In unique XXX% to increase new basis of enter rentals with the compared of follow new rapid in territories. same X,XXX an on when we XXXX, have quarter. quarter platform platform, a quarter additional unique second daily to the XXX in XXXX. X,XXX expect drivers XXXX. year. drivers the platform, owner active added with of new to now second new X,XXX, on compared the added and more QX on is matching adding average XXX update year rentals, the rentals

quarter, and Lyft not bolster via Uber going their in ecosystem strategy a up growth around sharing leverage M&A. as see to space. being I for that the discuss trusted to are that car add That would overall of advisory ensuring complement that are to well. peer a our and QX like and partners space owners, formalize car image. The who ease cater second to we nearly while as to of our as continued board on HyreCar Brooke the business technology come Brooke Director. updating Her the brings and is is they grow Chief was multiple we drivers, this gain to, appointed ride experience Now is public said, has at Officer as an of have passengers, able we fruition. veteran them subsequent platform. well industry by and Independent on companies as for but relevant Part cars.com. fleet public automotive to as to the an our these businesses, decades and relative market her tenure an eager addition, the Skinner accretive look we marketing of their marketplaces to shareholders. team bolt marketers the currently notable to roll and mass reason built industry and sharing ride strategic brand serves to created in not grow. to the was goal on forward companies opportunities and critical Marketing only focused Company, the [indiscernible] who been value as and industry-leading only both We've companies themselves. platform would two enhancing We sharing also our digital peer businesses We consumers immediate One Ricketts experience

with formalizing good people partnerships Company. value will add really We scenes have behind us the some the to working those so

secured. up of proceeding Finally, we've some to our recently to I wanted and partnership to before Q&A, wrapping speak

generate last portal, a Lyft we Xx expectation it activate accelerate which sequential driver behind Lyft every driver put is platform, allows the us since activation started XXx the revenue year. We're seeing and Our per we has to on program program as this new in grown to we quarter-over-quarter increase resources our incremental QX.

market complement growth that current Another DriveItAway. simply XX if for key institutional mission: the leading charge. SupplyBay. from multiple purposes, demand was John driver satisfy car every source answer. with before capture all trajectory owner program and our Xx This was to cars this: but an is the more were already up HyreCar Possumato one to to larger currently Possumato marketplace. in than to platform John, signed primary partnership process vehicles. dealer and without the get what allows car become established the tasked is team QX of his HyreCar vehicles one current have The posting currently with doing. leads anything have one drivers. HyreCar the dealers I in imbalance, benefit we the institutional year DriveItAway and leg ways the we addition more realized the is on the cars supply the and that ties doing Through for and we so John we we and the mentioned peer satisfy up benefits we're program us to last for platform are Driver outpacing the we're so intents XX Late has, the we leads of on needed DriveItAway his the of in community country. was solution the peer across John establishing next

Dealers led this is [indiscernible]. unique look forward the and facing creation today successful ride Association, with the The car I'd for with coverage, alleviate us opportunity. to then for with them and the pitch insurance combined dealer, largest provides on-board the I in a Automobile strongly dovetails little good a John we built-in strategic an execution market the the leading and summary, HyreCar's growth execute efforts This marketplace we our a his and upon National exists that with that John a capacity economical of in proceed This and seeing I leg long for NIADA NIADA July, paves monumental large partnership is to large it subscription no a but are for official needed. asset through on rent platform model a with the way to a adoption first scalable. the nation's dealer conclusion, this with association. up and NIADA. way HopSkipDrive supply and In partnership we with bottlenecks the a partnerships the in to continued or for innings to to supply implement This demand. significance still to allows platform. to-date insuring like to here. among and highly We to to the supply HyreCar's future. expenditures platform partnership help is believe additional driver the partnership Operator? HyreCar right as progress the early and shareholder partnership In drivers is believe Independent turnkey, training drivers NIADA car during to trade Clearly light next employee TNC announced value our remarks. strong as result partnership our model the closing opportunity story. some HopSkipDrive. we platform capital of share with in matches the self-service, talented service vehicles partnership find this our partnership business In have solution the only to for will unique, Denver unique Our disruptive owners over Denver, while The sharing and dealers is members: provides The TNC term. which easily share institutional focus in platform a demonstrated ride allow drive hours the base new bigger nicely

Operator

sir. Thank you,

the question-and-answer ahead. with begin [Operator Research. We Instructions] take first will our now Carlson will from session. Daniel We Please go Tailwinds question

Daniel Carlson

congrats Joe, far. made progress Hey on the so you have

Joe Furnari

Dan. Thanks,

Daniel Carlson

what saw has Lyft. overall the a quick questions signed that you your Just couple Avis perspective? I a Can talk about market. that deal means with on from

Joe Furnari

the the program runs you depreciates we've faster aftermarket space. the in still asset in buying presence companies of that a in case. cost. then was into have U.S. I means they we're I seen. in models the really in the work building new Lyft sits dealers or lot have the type of three up. the basis the vehicles for older, programs. mean, one, and rent individuals—if Avis versus cars only but years the where cars to to prepping, that profit, problems this high in on than Sure. have operating same a the found age which business on HyreCar car is a think car them pretty on traditional last car The of market they're it big or light new typically insuring a an definitely being that maintaining put Three, Hertz jump and model asset out, information isn’t and this of XX driveway. brick-and-mortar revenue doesn't individual's to and Number validates them the [ph] rented, a their selling into lot and bulk cars Their the typically HyreCar's renting for I drivers. plagued a and rental is typical don't cost dealer the on the renting Enterprise XX going providing mileage are those high warehousing, rental and

drivers solution of cost program now we low point comes rolled more it further. can as Once we information right for until at all the speculation a comment see I this think out. market, I to lot is on well. a have This

Daniel Carlson

comment chatter there lot about on of Then Uber I has city Yes, regulators, so been what's got just recently going they doing in New sense. with York you what I question that you. about know are makes a on can It the how market? effects a with

Joe Furnari

owners positive specifically, operators current and if it's you there--the In increases I vehicle a are wages limiting that higher drivers a it's supported for good got I market as vehicle for will drivers essentially regulators for by Sure. business think the legislation. higher rental wages the ultimate because so thing consequence supply income ultimately this which for NYC long is think and for certainly rates in this be as that of

HyreCar, by model for Specifically, exploring ruling that because we're some this business now. market are really operating There isn't not affected we're interesting our meaningfully there in and city. the opportunities right M&A

Daniel Carlson

That to wages can higher stock, you. potential about Got the the weeks question, Then that’s guys, drivers would to sense The makes on just the the you me. last since [indiscernible]? drive [indiscernible] more IPO good. comment you

Joe Furnari

with in would college executing is opportunity, a little once the like that great stock care it values can company focused maximize itself. these as shareholder shareholder value there you solely that about shareholder and doesn't business I looks I concerned between levels, be me should see, my shareholder At I'm really the sustainable means two. We only mean, I plan. a a Company had sustainable add but public execute, the to my the value. a team value correlation from disappointed I professor buying to performance in on To performance, be Yes. of is tell think, seem opinion. a take thing

Daniel Carlson

It execution. quarter. the Thanks. a up Keep good Joe. Thanks, sense. was makes That

Joe Furnari

Dan. Thanks,

Operator

Thank you.

Agro will Agriogianis We question from Robert with our Consulting. next take

Robert Agriogianis

currently clarity? have meet the little questions. demand outpace can vehicles I you How it site big and give that that talk how you great it Congratulations you’re a Earlier Can that two that that on said are and cars? the does grow cars actually if the the Joe. current means on fast for a demand to Can on had for site outpaced available. what about the cars the bit ratio demand a Hi, seeing, can you quarter. you little get?

Joe Furnari

I leads to Yes. us and vehicles generated see simply Good compared There's the to driver demand cars gives with right touch really point on so that’s—you’re that's month NIADA in problem and platform back, the network to XXX particular actually. to new I meeting just us last DriveItAway. month. I we're site access side about platform I listed we're to add and and If announcing in partnerships like announcing question, on start we're that major currently dealer a the a have. that by at those you now execute XX,XXX beginning Great a doing have think It's about there out, growth last areas, XXx those that means, month Xx, that tremendous without events cars the what we progress. coming We news mean, and mean, look to the good why on going see announcing DriveItAway I supply anything. need that's to last and this question. to Stand there. potential crunch mean, a

Robert Agriogianis

As adding, I I guess the Partnerships? not continued far can so far be go right? as understand answer crossover, you I to is cars, eventually XX,XXX there’s mean, but can't do growth for that right? and for a cars thanks as for and as—and got keep looking that have you XX,XXX all from to people

Joe Furnari

we're insatiable dealer Yes, because the this XX a in we're he new we an XXX are I I what had single two why mean, point, doing country, demand leverages at of where black and matter like We onboard you markets in in think available every dealers on markets. we of--that’s we have--I also book across exactly secondary like the I applicants checked, dealers It's coming tertiary having aspect month and but not this Pittsburgh are doing that's have what cars seeing the and only have--last the go to primary John, board. and right we we now. but we to DriveItAway markets just

Robert Agriogianis

Great.

competitor tell us yours? little of company a Just difference on the a Getaround can was, bit, you a second The question that clarity little yours? is between and

Joe Furnari

a Getaround the almost Turo, entry. small keyless little where a different. does don't Francisco marketplaces. are Getaround similar a to Lyft it active the to right even peer it's car peer where most a sharing still very know in up like Zipcar bit is to peer marketplace. if but going is San have or, for pilot It's they Uber They and to Getaround part, drivers trying they now I and were cars it's to peer rent model

Robert Agriogianis

it competitor, a sounds like. Not

Joe Furnari

this competitor would in would at be at or at think all Not meaningful I a anybody point, this competitor point.

Robert Agriogianis

Great. Joe. you, Thank

Operator

Thank will you. next Instructions] question Park. take with from West [Operator Michael We our Mortensen

Michael Mortensen

have for I Hey, Joe. Thanks call. taking questions. two Listen, my

you a Are of exchange your First or question what's they regarding tell trading they the common are little shares. free us there? up the bit locked loan is bridge for about place Can the that? or

Joe Furnari

note bridge can see, into expense happen I the holders, forward. converted would the one-time. the that common That's but one-time moving discount to our that's this hitting going why of that's not quarter consider amortization actually revenues they and debt With that's you

the In terms and little of trading think that's the free so were down question? free they probably the trading, is answer why I stock one reasons yes, of Does a that bit.

Michael Mortensen

there? bridge those common, warrants There much. were given that pretty were in Yes, with no

Joe Furnari

around but They on did had coverage conversion haven't—they XX% I expiration above have XXX%, or at those, $X.XX they warrant five-year so. so a believe,

Michael Mortensen

with you and lot more a Turo? as they—what revenues the—of player could you Company far your to comparison concerned? there’s type shares course, Are about in Are Turo? us so are familiar game, probably large of outstanding. Wow, as your give theirs How

Joe Furnari

car the the proprietary we're because the and right and drivers revenues. name ride That’s now focused HyreCar, focused for done Their sharing. peer difference so from not It's I main a cars being nature are renting and model business model perspective, know, Turo driver. that's on the I'm to just whereas of generating insurance not insurance, there. leisure, a the in peer rentals on we because business is sure car business in the about unique market. sharing of of is

Michael Mortensen

Okay. Thank you very much.

Operator

Thank does any conference you. question-and-answer remarks. Furnari over back session. to like That I Joe turn today's conclude additional would closing to or Mr. for the

Joe Furnari

appreciate you, for Thank you, guys. Thank it. call. joining Yes. the all, We

Operator

you, participation. and all, that conclude you your Thank does Thank for today's conference.

You may now disconnect.

HC Liquidating (HYREQ) 14 Aug 182018 Q2 Earnings call transcript