HYRE - Earnings call transcript Q4 2018

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Operator

Good day everyone. Welcome to the HyreCar Fourth Quarter and Full year 2018 Results Conference. Today's conference is being recorded. At this time, I would like to turn the conference over to Greg Falesnik, Managing Director, MZ Group. Please go ahead, sir.

Greg Falesnik

operator. you, Thank

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

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

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

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

Joe Furnari

everyone, conference Great, thank you, results to I'd Greg, us call. financial today. our thank to everyone year fiscal and XXXX like welcome for joining you,

excited results, the last same to our to today monetize illustrate for a the our with revenue XX shown We provide plan reported of vision corporate ultimately we consecutive are update, to the quarter here in record be we've show the to growth. and top-line another and future. extremely XXXX, future mobility We over and financial of how that QX, XXX% double-digit quarters record year. with period increasing in million revenues Since $X.X beginning vision

significant we the $XXX,XXX in at This million been based to of over year end to net $XX almost million lifted importantly, steadily XX.X% prior million XX.X% grew XX quarter-over-quarter in our resulting QX the more up a the full rental XXXX Most is $X.X XXX% which profit year. to gross to gross million increasing year of than million million QX of to the quarter times was $X a million $X.X XXXX. versus burn fiscal ago, more million on QX XXX,XXX in has $X.X of cash compared days reduced levels. $X.X for the today margin QX several the still fiscal than and $X.X $X.X in fourth in in about QX XXXX margin on year same profit from bank, in profit the for our period we revenue XXXX, a and of with Gross have from days. in XXX% rental net For to

proving out industry. mobility the as a in profitable means it a HyreCar model First that service is business

former year in of we This our added in platform, on this the of as compared capital quarter to XXXX drivers going quarter, profitability new to we now existing the XXXX means to in In on compared platform XX% the third as it sequential our the new drivers financials been of had the unique drivers thirdly, removed support company’s to hit We the were a and our increase the concern of by adequacy unique new to XXXX. fourth XXXX the when are drivers unique in XXXX. auditors added on added qualification XXXX and added compared XX% increase unique operations. of quarter fourth an XXXX. in track Second, about goal drivers is new QX XXXX represents

New our around we our between noted XX month. and driver Today on generating to I estimated dealerships cars platform. XXX been double A a that had listed we have call, expected listed the averaging on this we fourth the we leads XXXX cars of the an platform our our listed Obviously, XXXth leads of XX,XXX In per am which, to dealership number disconnect the proud the site. are still represents quarter in report, XXXX. are on third we driver quarter auto today, platform. cars major to representing

So initiatives saying the scale revenue OEMs as more introduce dealerships we deals make dealership telling they are them opportunities to that that service so a more platform our continue their new and platform because positive servicing to initiatives benefit. provided us mobility all helps by service has to Feedback departments be HyreCar are the parts, sales, from OEM industry HyreCar believe and far. laser-focused and franchise on dealers money inventory. been the dealership will

in major share respected by our This development dealer division capture fleet XXXX innovative So street institutional our Urbanization sources that with large-scale a and I consumption to approximately The just worth front reviewing behind macro given the that have the dealership habits as beginning. consume But recreated is housing, space. of In twice a times Allan, to entertainment. are focused that United is industry late and on a and think a Lyft trillion leader in announcement scale. vehicle the the a alone, time as of from HyreCar supply is way vehicle globe consumer thought hire it. implement and X.X main established and establishing and changed operate larger not this being for was dealer industry, at the dedicated was across three through continues and our transportation of expenditure again. retail model the States thesis on threatening Brian profitable technology maintains as household feedback built were the the healthcare growth division hearing on forces model transportation focus largest – business from relationships our transportation after and expenditures to XXXX rentals. around the second strategic driven business positive establish transportation Brian into platform concentrates large growing in are this adoption Uber long we scaling dealer long-term Growth larger on-demand model active traditional is OEM a new mission, the commercial veteran OEM of individuals with is changing around a expectation initiatives. have

to a upswing to retail as As downward ten points ownership forecast a private due in car significant and a fleet of ownership service. ownership year – shift an mobility the commercial recent private example, dramatic with most in sales

as proving and this OEMs. benefit a Our dealer automotive is the are initiatives for platform solution HyreCar’s that dealers to shift leverage

the Chief to Officer details the Brogi, turn XXXX. like Now some key walk to Scott? Financial fourth and over through from call to full our Scott quarter financial year I’d

Scott Brogi

Thank you, Joe.

in to increase. the compared increased runrate the million primarily to of days almost million approximately XXXX when gross driven increase $X.X profit recently fourth by in XXXX the when in fourth year from to gross We in for XXXX. year of Gross and XX.X% gross increased of XXX% proprietary XXX,XXX days compared Revenue sequential to million million quarter of rental are quarter XX.X%, approximately in was XXXX Gross in fourth income. in XXXX on as This by fourth margin on profit a fiscal million during affiliate impact of gross year ending $XXX,XXX premiums, higher quarter X.X% gross XXXX to significant increase we during as an compared times increase from XXXX or a the annual XX insurance revenue we days we and compared And XX, $X.X on of million a XXXX. referral the quarter to quarterly of revenue XX.X% of as from the of XXXX; well XX in expansion of $X.X $X.XX in XXXX, XXXX margin For $X.X December reduction ending the revenue December an driven fiscal leverage supply to to times and over in by XXX,XXX the the of third to fiscal an profit the $X.X started XXX,XXX the dual sequential platform XX, $X.XXX XXX.X% a as we represents profit our scale. third XXXX eight XXXX. saw XXXX, for to vehicle days. in XXX% increased platform. the in fiscal announced growth fourth compared of quarter from to rental revenue significantly XXXX of XXXX. quarter X.X% year $X.X increase represents We XX.X% million Margin of – profit to times profit currently quarterly increased increased when of $XXX,XXX This million was of and by fourth in a of quarter margin almost operating in XXXX. dramatic quarter our five-fold increases was in increased

we’ll share Over well additional revenue scale we economies the releasing and in as as long-term, that be revenue expected soon. transaction realized improvement from insurance offerings sources is new further margin of as costs,

year So of quarter $X.XX compared times. with in loss to due significantly and operating were XXXX June X.X to expenses cash per from totaled million a $XX.X in of expense to expenses expenses December the to substantial company’s higher compared the increase million $X.X in XXXX in million revenues. the gross increase The of expenses $X.X XXXX, IPO. XX, the quarter The million net general in share, approximately to a at operating compared million is in five or again per times, and over to of compared million to I $XX.X business. XXXX, in net net of exists. of an total levels which The net $X.X million loss support longer and million Total due in million loss marketing increase a the note same to per or primarily was that no fourth with $X.X increase of loss in sales profit $X.XX operating administrative or was convertible share XXXX. associated $XX.X larger due levels ago. to of support $X.XXX totaled interest $X.XX December of was expense as proceeds XXXX. Cash The XX, XXXX higher $XXX,XXX primarily share gross debt, $X result dramatically would at XXXX higher

As over $X of million today, we cash XX/XX. up have marketable and from securities, million a at little over in $X

we confident ending million. and between is through to are position $X.X million to that the revenues $X.X future. and gross quarter range continue with know And our HyreCar range and between profit and for to for million to us XXXX, million we people cash $X.X $X it let foreseeable first So March wanted XX, expects comfortable sufficient that the guidance,

turn Now Joe call the back I to conference call. to to would conclude like the

Joe Furnari

closing Scott and Thank with remarks. to Great. with some I’d you, like proceed that,

grow a enable So, new operators positive. perfectly in individuals fleet see it’s to our growth and are to rates. sequentially and initiatives dealerships drivers, a mobility continuing from dealers called auto fueled access to is as Feedback and HyreCar positioned tailwinds double-digit We summary, the has future toward been pushing opportunity. OEMs, macro mass OEM we by service. This

the long-term. the our turn and believe So on to and value-add operational focus. accommodate point I to efforts build shareholder suppliers. continues operator. demand a vehicle forward providing into our to and that, incredible creation are it and Driver we reaching HyreCar capacity experience an been conclude, consistent a down is to be driver inflection scale customers robust doubling Operator? to platform key I continued With value look the execution over to I’ll over To has

Operator

with Grondahl [Operator Mike Securities. Instructions] We’ll from hear first today Northland

Mike Grondahl

a Congratulations progressed maybe you how Yes, quarter. months? last five you the and first to could studies name about don’t question the how just dealer case have guys. dealer, four on but of a the the strategy, Te thanks on talk and dealer couple is, or over

Joe Furnari

Sure.

car XXXth listed So that listed a we’ve came most that, recently and said that listed platform, the means that we – on we to dealer rented the car. then dealer which

last had we when mid-November since reported. up significantly So,

in So, of in of cases. into kind three what dealers use right terms of terms that, now like falling a I am our buckets seeing study, are case is

revenue is fleet and what like an model building rental car these rental car fleets. have, dealers alternative we You which consider are

that building seeing Vegas and company then two in Atlanta; good cars are franchise auction, that XX buying revenue September really idea in is today. cars had is We his we independent by He named his at both stream cheap AutoDeals scaled a at November example, out One to person. buying there. on as about in on auction met X listed and James dealers. a of of to create going the new fleet is this and them

case. first of kind So the use that’s

cars with has cars. rent-X-own listed XXX good that income of program. money are that, the they case cars is of example, for sell ten rent-X-own you HyreCar what five use Mall XXX in payment. in down A of out October sold The a Second five to He that call has up this who to for that’s started enough platform New the franchise months beauty already before cars stack program three dealers program. - more Auto at over in point using Mike beginning Jersey. the rental

So, seeing well. value lifetime there, customer we of extension are as

mutual a benefit cases. So, it’s in these

Third are and franchise more selling example, manufacturers cars. dealers

that dealers on manufacture the required some franchise incentives before of to are mileage of put advantage new taking So, vehicles reselling. dealers

really cases. the are those use So three

a We platform dealers money think out are and which good make I feeling. how are providing the the is figuring to

Mike Grondahl

, Good good.

to working on strategy? the How discussion with Are going you mode? an OEMs any Are today? you OEM that in update still progress? what’s is Secondly,

Joe Furnari

running this we are a all have know But the couple with I’ll That’s pilots OEMs So point. few are don’t street unofficial a running now. right that’s I at let are they couple timetable. now when can and of it. we right say I a formulized.

Mike Grondahl

is cars is HyreCar guess, off using the as I case for? that can or to sort you use that, that coming say OEM the a just follow-up lease that of

Joe Furnari

would those I’ll tell what, here pitch renting ideally, how cars. the have individuals, to solution of about HyreCar I for an to us their you our happen, you dealers. to more That OEM to like take door turnkey say, I owners franchise is to opens franchise Ideally Well, for like would to endorse with us a all that? start and

or rebates rent to earn love by starts cars alternative – and selling use up I rebates. source start cars step starts right for wish and revenue in more – cars selling Now receiving sharing. renting manufacturers in more for to a And that start owner to own I specifically program the offering would an OEM

ideally said, have to timetable – for a don’t that��s like I like happen, what but have I’d I So, that’s that.

Mike Grondahl

two up questions, but Got is insurance How coming it. maybe was more one, think going And I that then look? April. in renewal your to renewal

Joe Furnari

now. insurance So, is COGS the right the obviously, piece – a big of

would dealers the looking of an types of at standard owners out plans and given and giving that out time owner are and essentially looking I three coverage, vehicle broke from type are this to for next We HyreCar the of ability haircuts rental. takes given that they tier type premium basic, coverages coverage, new level at the of vehicle insurance week different rolling our of a of that the as type the it the choose

the with insurance being is having So, companies. and by are we all driven conversations this

bit are into talk because profit things And that more. couple mid-XXs. will we that, timing-wise, I couple other able that next so, XXX%, there to not think a XXX% be of they other push a the to is of the but can’t little that expectation the margins up we is about start move a – week And

Mike Grondahl

lastly, that just sharing of maybe new offering year? then, this would coming mentioned are And drive help see be you can margins. What some maybe we kind offerings revenue some and those later Okay. of

Scott Brogi

Yes, in at of we from of it’s liability are programs a kind for Yes, that jump different of so, those it’s looking and next here maybe some of And that one connected is terms second, they the we’ve owners Scott. I’ll insurance options things. kinds month. limits in car like really start requests basically, deductibles Mike, new the heard or to with

these car revenue new insurance we more that are the entity bit say, give to those talking you of to have really been you coverage. structure dealer months you’d with types coverage That’s what are additional shopping basically up couple who we’ve carriers for flexibility we’ll to then, liability really are high wants probably be going for a with have programs if the an in we space, the share about. want willing a So from of last perspective, owners mobility the more different of kind and and

would that keeping if be will, of that would revenue. would net take that additional increasing So we be the our kind margin of be you

Mike Grondahl

Got it.

Thank Okay. you.

Scott Brogi

Yes.

Operator

Halpern next Howard with Taglich from hear Brothers. We’ll

Howard Halpern

Congratulations on the numbers.

now is – deployed regard force. within your it large to How First all being question you you and operate XX sales it can is states? now is that are how

Joe Furnari

And What things we now them – is heads force this towards driver is them commercial owner out the specifically that of couple drivers of geared a the walking done bringing or side essentially. have and the pitch process. bulk Sales in force a the carved and geared to XX for up little point. drivers under and through of is sales at the side more towards

repurposing commercial you geared vehicle now six you and dealership, things. now two in of owner a are of more are peer-to-peer sales, some are going was to call towards the that and a you – of to if more now going side now people our So, a you people, really towards

Scott Brogi

we OEM sort great and of I probably increase a that a earlier. kind seeing scale had this Joe on pipeline I’d we with fleet larger inventories opportunity with it thing numbers of so from franchise the influenced that that area good But, add Scott. about and one really And are think is, now resources uptick into seeing and of talked the are the dealers is car to relationships, board Yes, real equation. side Brian

Howard Halpern

Okay.

In Is good to quarters that $X.X it terms expenses I fourth sequentially upcoming million the know rose quarter, point nicely XXXX? in the fourth of the growth. for support for starting the a in G&A quarter

Scott Brogi

year-end think done had catch-up I’d number. had some we we I in say, that that

expect that not lower point that a be But bit we’d at probably to going to start. So, forward.

Howard Halpern

developing the and you initiatives guess, along How some service partnerships, how And of the in XXXX with, of that structure software Park testing to you Okay. gone of in streamlining. How on are pilot guess, to has impact out Mr. brought so also, customer I the work whole of there. a do – that you terms I has in the integration in that gone all that XXXX? expect you company and

Joe Furnari

insurance then key Yes, in a Henry piece the is, the and that a at capacity paying insurance the been this is, finish-line physical right specifically into insure to there captive bit Really really with in faster cleaner and changing on the sure been – the ability are at the with designed. we much created management. making business, structurally now coming I pay the has managing This damage we that to the way our claims. way the we’ve we’ve claims ties and captive are see, the process little

repay, happy is faster resettle everyone there. So, faster

So of reviews. think that’s the And that’s see one. number you adverse a where I lot

process in now. So, is that

reaching to brand advocates. turning out has team he, who from that. Henry and management are the tasked We’ve customers then, with a had reputation established them those into have adverse – that’s and group centers So a they experiences doing

the opposite had operations alignments, level-X, physically had alignments, piece calling now. and sales. at the you room. a of pod another And are we centers sat in So call that’s the and we structural pod they on the happening sides so, level-X And what operations then is then then, past,

what done resolve agents, and than to faster in brought right past. to where a agents in Now type -X other able they what issues structure sitting we’ve are each is level-X, lot operational the a pod had we’ve sales are level next

you are is streamlined communication what so, customers. And efficient and more seeing our a with

customer to for structural changes both ramp with think, of Henry, business as those the to the things, here talk are I someone is us. acquisition customer just but side expedite retention to I a that going having in huge in yes, from business issues three this think really So, competitive perspective well. and real-time a from also to start advantage And side

I think missed competitors our retention of in the is one sites. point as our customer this improving of mission the experience most had on

Howard Halpern

were? Okay. And you one Do just housekeeping. have QX billings what

Joe Furnari

billings, I QX. gross QX have don’t

Scott Brogi

in We’ve it got the K.

Howard Halpern

Okay.

okay. for look I’ll it, Okay

Joe Furnari

give increases quarterly Yes, of that’s we’ve GMV there is show a graph which will actually to in a is that really good kind rental – days well the business. that as quarterly you in the as yes there volume metric moved

Howard Halpern

up well. the Thanks. Keep Okay, great work

Joe Furnari

Thanks, Howard.

Scott Brogi

Howard. Thanks,

Operator

this closing at to remarks. time, I things to for turn And would like back management

Joe Furnari

we you for to joining continuing on our today Thank Thanks, Great. again update operator. progress. forward you us look to and

Operator

for that us. conclude And Thank joining today's will all conference. you

HC Liquidating (HYREQ) 28 Mar 192018 Q4 Earnings call transcript