HYRE - Earnings call transcript Q1 2019

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Operator

Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the HyreCar Inc., First Quarter 2019 Earnings Call.

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

Following the presentation, the conference will be open for your questions. [Operator Instructions] This conference is being recorded, today, May 9, 2019 and the earnings press release accompanying this conference call was issued at the close of market today. is Falensnik, Joe North Managing Investor firm. today Brogi CFO, America, call Relations Greg and Director our HyreCar Furnari, CEO, Scott HyreCar’s On of MZ read the to I statements. call now about forward-looking turn Greg will to a disclaimer over

Greg Falesnik

Thank you, operator.

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

company’s in to, of Forward-looking future from future risks, the expectations, based involve predict. intentions, to actual and management. report outcomes are company and statements business conditions. in are time Exchange company’s documents the statements in but is based results that include, estimates Securities Commission. the that what files not other earnings, and differ to current about and are on from by or beliefs, expressed statements Therefore, the These in are limited predictions relating statements which U.S. assumptions part any likely performance not events or These on strategies, statements and other the and forecasted – made guarantees may predictions expectations, discussed express forward-looking are statements and time materially activities, to with difficult to uncertainties or assumptions

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

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

Joe Furnari

I’d you Great, welcome thank everyone you thank XXXX Greg our results for like first to today. everyone conference call. us joining and financial quarter to

here how of results vision our to of We’re corporate we provide showing financial in illustrate record extremely the our to mobility. and Ultimately monetize plan be future future. the for excited to and that update a vision today

million, the averaged new compared time when top-line added $X.X since revenue shown leads we’ve of In were in We to this XXXX reported QX So XXXX quarter another with quarter. have first of same drivers over in last new first XXXX. compared no in revenues the had period, double-digit unique We with the added drivers increasing consecutive $XX,XXX XX to to the to of XXXX the the of was quarters different. and quarter per growth same driver unique XXXX, record XXX% period new beginning platform growth year. quarter quarter as

dealerships sales hundred cars average adding full economy quarter third to dealerships participate creates fleet us cars average a per but satisfaction platform. dealerships want one the the the which total to it we’re six who from and dealerships Today opportunity about per that in averages out platform with per cars the of hundred cars and over listing about with with grown call, pipeline vehicle. dealership leads XXX demand and represent our XX weeks an into XXXX cards sticking platform inventory imbalance In dealer cars some In about and in one call, dealers end to literally to significant XXX or match since of I sharing we to pipeline numbers noted dealership. about listed give these ten we increase XX qualifying on at and the because XXX an they tremendous implies this representing cars dealerships a dealership. a legacy So numbers dealership don’t a the of the gives drivers cars a have noted about to for sprinting the we’ll to on listing representing platform from call approximately XX you XXX the in we and dealership. over – had had speed their grown insight because are per the cars the dealership XXXX in car it listed have on listed the last ride

and growth site. represent while listed us, revenue the obviously leads a So driver our the between future cars generating on for these major still cars we’re disconnect there’s

be scale on laser dealership to inventory. initiative continue we to focused So the

partners Our currently is has partnerships XXX pipeline feedback focused positive little dealer with been added accelerating of the from franchise group almost and the from pilots progress, the the churn into dealer we’ve one side. OEM on in these pilots

the that The future. Silicon and HyreCar once applications fit. one leadership with two technology currently of decades and individuals key fueling Officer XXXX platform and our up of where Valley HyreCar will our Prior of he to this dealer on from systems to industry. Scott dealership details disrupting the uniquely leveraging platform has to recent to the different turn shift and Chief in He’s trailblazing initiative Officer. industry ground automotive company’s financial solution Financial retail Tekion and addition, perhaps the are this a in OEM’s leverage Tesla’s success Tekion, our experience of continue founder and four into is objectives brings of first the to HyreCar. over the been us Jay like Brogi, Chief the most to fortified and for information hyper-growth directors. over space and generation We’ve call my has platform, that Information with initiatives experience. the to startup the founding years walk what the scaled of So, It’s and transportation quarter I’d CEO the going the from experienced was made team Tesla is of to XXXX through and is his key our key XXXX. a perspectives now Jay and the built He digital to of some Surrounding board best leader proving of business Scott? development date is product over transforming dealers additions Corp. a the

Scott Brogi

Joe. Thanks

inventory our rate we quarter scale during XX% of platform run dealers. the annualized begin proprietary year first $X.X XXXX, the first million quarter and our during XXXX by rental increased $X.X million the March on able primarily sequentially approximately the days. from compared million XXXX by to were the over quarter. compared We rental increased to fleet represents an XX% quarter first prior of For driven to supply revenues ending net prior XXX,XXX days Revenue the was vehicle which XX, to XXX% XX,XXX XXX,XXX from of for platform on as to in increase same period approximately growth as to $X.X

increased to be the favorably million year. for continued prior ended XXX%, increased XXXX to XX% the profit as to XX, efficiencies, or due just forward, impact $X.X prior to XX.X% revenue offer. year our to increasing three-months and the from three-months revenue XXXX gross $X.X a scale, to period the We XX.X% as sequentially Operating for same net March goods the $X.X share result increased same ended Gross compared sold. as will to by for options $X quarter. million million the additional compared cost million Going supplemented of period profit, in begun for XX, we the have March prior margin

scale due is expected we million long-term, to insurance months of expenses insurance we to which Over our March as this same with $X.X and ended of of as the higher period $X to expenses increased year April improvement Operating staffing increased million further policy automobile realize renewed annual three of support in levels. just year. XX, the the the economies XXXX revenue to prior compared margin

sequential stock-based the million a does prior a in $X.X in the quarter it XX%, However, $XXX,XXX compensation include this from reduction non-cash quarter. was this operating $XXX,XXX expenses and or

our million controlled year continued continue will loss we narrowing while and fashion $X $X.X Our prior $X.XX benefit higher margins top-line the a in to of scale net loss our by operating This or $X.XX growth. from quarter. X%, months of share to for million same per compared or decreased period ended for the the three $X.X $X.X loss a million, XX%, expenses million sequentially from per share XXXX or prior or net XX, as a loss to March increasing of the

$X.X March $X.X our foreseeable are at million to XX, the compared comfortable as we confident cash the future. sheet, and balance totaled and through On XX, carry cash at to sufficient it position is million us XXXX XXXX with December

Now I’d Joe wrap up. like the turn back to it to to call

Joe Furnari

macro accommodate a And turn to OEM execution sequentially In see to tailwinds value build access the been doubling positive OEM’s, and we’re drivers, focus. To a and capacity into mass reaching incredible a This a been it continues toward opportunity. long-term. positioned to I’ll conclude, scale to The look operational demand like experience customers dealers that, and an it’s by I to operators individuals so grow called new efforts are I some With point that suppliers. providing driver with has over growth robust HyreCar Scott. Operator? summary, the initiatives over our mobility forward you, the pushing has and and down We perfectly fueled we our where believe I’d to platform with creation fleet shareholder Thank remarks. driver proceed is and future value-add from closing on HyreCar and at inflection to service. continuing as operator. is consistent to the enable rates. auto to be dealership double-digit Feedback vehicle key continued

Operator

from will Session. have much first Mike you begin now and Instructions] Grondahl. sir Securities, the Q&A we Thank [Operator our And very we question Northland

Mike Grondahl

guys quarter. Did pipeline? congratulations and in that the dealers thanks I right, the hear on Hey, XXX

Joe Furnari

Yes, you did.

an dealers. a whole big deal original franchise growth and franchise to so later our He and healthiest list. we’re one you I to as And look coming our came was eight favorites, here’s to top you endorse partnerships weeks back pipeline the sorry, basically of us I’m playing saying, the said, of was three know, like in going OEM that back I’m – the OEM

and So, reaching guys. we our those out we’re CRM the now to of list whole in into OEM franchise pumped dealers process a of

Mike Grondahl

tied dealers that OEM? to there? dots the XXX connect the is to franchise And you trying the mentioned I’m

Joe Furnari

yes. Correct,

Mike Grondahl

OEM And mentioned Got publically you it. you? have can that or

Joe Furnari

right under We’re now. NDA

and scale towards them pilots, running cases announcement in – and value-add to we’re So we’re show here. then show going that dealerships working the multiple them official use we for

Mike Grondahl

Got the it. And that how pipeline you many last dealers time the in were number? gave

Joe Furnari

was around XXX-ish. So it

We’re up. point in hundred the with that at had already a signed that pipeline

Mike Grondahl

Got out? it how you And calls, have when it. size, sort like in you how that do Is the do inbound is it pipeline? prioritize XXX you

Joe Furnari

what do ideally we’re demand geolocations match of dealerships with geolocation. out so to those that Yes, trying various the is now in the individual

are the you’re leads and that and that then those they car a checks. they us coming to that prioritizing passing saying seeing their are that So we’re people to getting just drive – need the want and background individuals

follow through ratio in it we’re on dictates So, prioritization really list. and we that, who that a that first calling there’s time

Scott Brogi

it’s up – Scott, that I demand and pockets knowledge right, with where a to Yes, because where would car be make great the and we actually just was dealers those is, working really their know – match got in like we are, just the between saying, add I the driver as geography of of from can that is position ride most this sharing. inventory demand driver match to that Joe for

Mike Grondahl

Got it.

priority? so I if where drivers, dealers the and go have a leads driver from map you and as So densities are those to just and you made those as quarter, first it understand, know, in quarter XXXX city to a you coming unique the XX,XXX so the

Joe Furnari

Exactly.

Mike Grondahl

dealers got kind happening that is ramped it, – that’s that or stories out call quickly success Any it. a lot like Got with one of with of

Joe Furnari

in detailed out Yes, call we I of it ramped and couple to, think listed. went one XXX last through they case, those dealerships cars few and cars where we a with a five started use cases

XX cars ramped XX, had to listed. Another

have cars. scale those demand on and we’re them. guys So, into we now, lot guys of top-line dealers to going multiple to are and the you’re past a more to kind really I lot that start start come starting of the those listing a so of starting rooftops and franchise in And coming see show independence capacity that we’ll the see had been think to to franchise these on whereas – it the

Mike Grondahl

you Got Have it, dealers? got any it. lost

Joe Furnari

of right couple this now. churn, point. point. lost We and have into little It And churn to very the kind here has a at We’ve this plateauing ties feedback sources. but of dealers positive the very little of also, sales there looking sales. happening. right predominantly us plateauing Primarily more dealers broader revenue been to see car now start you which thesis alternative for And the means really they’re cars and that’s car what’s around sell to turning

of independently that We’re running each it’s turn for us increasing of then programs and lifetime months, that our which of driving dealers number three is they around leads they’re for through because sending other. there, are and four the those buying or a value vehicle customer, great

a uptake seeing lot there. I’m a I’m traction lot And positives. good so of of and seeing there

– fix, all ship dealers a there’s franchise lot backend the and building rocket a that some to in we’re it’s their sure for that type glove say white but really the we right, need flight. larger – processes that time, support stuff that this providing there’s to make it’s and service being we’re overhaul, of we in said, as Now of the

the So, and and in the underpinnings insurance of the backfilling that product processes with claims operations and we’re type all constantly of stuff. of the

happening that’s So now.

Mike Grondahl

And Got me. for question maybe it. last

higher little weeks? only I coverage vehicle out owner are XX%. give and I for? know What standard insurance daily you a think did or vehicle last pick kind the more the five rolled rental the coverage owners. three up then could April of bit you of see options X but vehicle in a owners those And opting XX% What for give you

Scott Brogi

we Scott, we’ve as I’ll offer two one, share XX%-XX% to and more but, go original you added take surprised, yes, what it’s Mike, we about, and very service in maybe split. ahead addition pleasantly this been to revenue Hey talked the levels

and we’ve revenue So in that of a basic now getting really benefits uptake plan new that the standard split. some converted maybe of month insurance that’s it plan, a in a third, of plan say car features that to and that’s I when a plan third, also it��s over some seen would premium XX%-XX% then a and on current our wanting from significant you kind third vehicles. split Originally the and thought in owners supplemental premium know, just XX%-XX% addition April the think but have we owners I a during all to which would has we income to the plan back stability be, enhanced an they’re offerings, we people have more

the into know, great, and that a and allows us step experience really and support customer So you to more experience invest drive better for that’s up owner. been car

XX% in that margins our should really allows us bit a we’ve our that as revenue So of about we’re begin of up actually you to investor do to really since historically XX% conversions recent and you’ll X. about net XX% actually all show forward see increase to really more what like April to to that know, from going then, happened talked XX% those the in and here excited deck, kind range QX

in reduction improvement excited cost with, that reduce along sold we’re starting going about you know, insurance QX. costs for the to directly automobile So our and be dramatic will a the goods in continued which business really it’s of daily

impacts this the already profit us So continue above quarter. two drive level we to really really got should nice that to to help gross

Mike Grondahl

Thanks jump I’ll Great, the queue. back guys. in

Scott Brogi

Thanks Mike.

Operator

Taglich Next Brothers. Halpern, Instructions] with [Operator Howard have we

Howard Halpern

quarter great guys. Congratulations,

that the the XX% some approaching at last that question gross margin building year? – so you during level point Just anticipate that off

Joe Furnari

hey Yes, Howard.

changes actually also here I in XX%, and in – net that in think about, that insurance that reduction XX%, to to up to talked started we margin a these May with the XX%, just direct from we’ve XX% you know, two you’ll and, revenue know, we swing cost. improving then you of see April seen actually kind

going actually will that so very that to forward. quickly actually we in think phase So you’re see going QX

Howard Halpern

if to the Was the I first was seasonal a that add could and color a marketing little that A swing Okay. quarter. big able impact the after? maybe guess to you of really from the because you or on that you go now quarter that marketing? OEM’s – sales Could dealers you better leverage to fourth a pipeline see are to little clarity have you and, sales and give where

Scott Brogi

dealer I franchise connections what deep particular in who really think what It’s Yes, got about Scott, key dealerships much tranches independent the that with community. you on couple one. to XX,XXX that we’ve into who traction and the partners doing XX,XXX segment franchise seen Again, of of strategic helped we’ve us gain large the in see is then And there’s you’ve pilots maybe be to largest dealers now have Howard. in I’ll then kind XX,XXX we’re midsized to addition historically. cars bigger run, come that a have starting really another of into of to we’re dealers see space tend manufacturers and started the start

So, QX. building and we’re in those it into those new on heading team really QX are now starting came pretty to kind partners out of leverage that efforts; and

there days think what early seeing we’re it’s so exciting I with results but just far. So really

Howard Halpern

relative keep this And of you marketing quarter what on you have and expense first the think from is sales cap that should year? and in –

Scott Brogi

know, – to of increase we it a expect have terms inventory really it that car bit Yes, team and very going be the it. in be in Got outside but you expand of the self-supporting. of to rapid terms we the that the that to in see, I think sales we’re fleet, should monetization yield

and support sure to it line. have little very white OpEx sales add may make as don’t on these glove increase have see to experience dealerships to bit have pilots. to really team a and, we OpEx a the successful We we So, that dramatic

Howard Halpern

don’t willing is or if you anticipate to hopefully next in going fiscal you’re being flow cash fiscal it, this to be I And know year provide it positive, Okay. breakeven, when do but current year?

Joe Furnari

positive Well, that we’re this cash into we The tremendous this with is, of really amount the scale in becomes we know, next it’s large months. opportunity band I over pretty opportunity us dealer that space XX and for have to I – flow to OpEx close capturing think so, now QX, when in you right question – the that seeing it. think market share you’re balancing within have

this So what at balance I we’ll a problems with to strong don’t that see with we we’re balancing that’s the forward. way point any going and to operate continuing reported, operating. continue we’re cash But position

Howard Halpern

so reinvesting flow Right, coming be cash is positive whatever you’re going to your way?

Joe Furnari

exactly. Yes,

Scott Brogi

Exactly.

Howard Halpern

Okay.

well, work up keep the guys. great Okay,

Scott Brogi

Thanks, Howard.

Operator

move Northland Securities. to we’ll Grondahl Mike with And back

Mike Grondahl

Hey one to a going guys, many you follow-up. count on two? OEM right an it there. now? or just pilots How accurate actual Just Is have do trying get

Joe Furnari

right pilots Two OEM going now.

Mike Grondahl

Got are like both going? it, is in XXX dealers one got where they the sounds how you going pipeline. and really second the is one – Roughly, well it

Joe Furnari

one then very we’re their into very they’re dealers and that relationship lagging second The in specifically healthy going geographies. specific to

of starts they demonstrate the it dealerships I that some then six to grow. there, and think, like I and are go another So, you we – there like those that core the think eight, do group probably after is another, dealers XX to to scale plan identified we’ve then

going longer to process. So, be that’s a

Scott Brogi

with situation. really out is of large monetize and from that a great scale pilots, a of make that’s longer proofing it’s of right, we but those making experience sure comfortable it everybody both OEMs midsized manufacturer those thing in Yes, that takes moving and very and of great we’re all pilot and I have something can is, can inventory course is the there. And the is to it’s the so that that just a those Mike, with manufacturer companies just our focus process international a pilot add, they companies, nice we one big show would kind as one domestic of of just these

Mike Grondahl

is dealers are that those the to cars they more timeframe? OEM, identified, and Sure, listing six summer eight are yet second or

Joe Furnari

a timeframe. Probably more summer of

a up they’re program. setting coverages, for plan they’re this financings sales have longer insurance You LLCs, up process their specific there, setting lapped securing floor

a process. it’s definitely So

that late probably able to, more So yes, How that. a color And probably a you’re you one give accelerate that. get to on going in there. or two progressing. be that’s bit summer call, that’s little I’ll the even But next

Mike Grondahl

– just one, it’s well on ways. its like it Well, Perfect. sounds it’s

other like it’s The sounds one just of earlier. kind

guys, had I thanks all That’s cool. again. So,

Joe Furnari

Thanks, Mike.

Operator

the any remarks. further with I’d no to back closing turn to questions, And additional for management or like floor

Joe Furnari

to Yes, our you today. joining to for update you That’s forward on thank continuing progress. look us again it. We so

Operator

conference. That Ladies thanks today. and again, gentlemen, once does conclude joining us today’s for

may now disconnect. You

HC Liquidating (HYREQ) 11 May 192019 Q1 Earnings call transcript