HYRE - Earnings call transcript Q2 2019

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Operator

Good day, and welcome to the HyreCar Inc.

Second Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Joe Furnari, Chief Executive Officer. Please go ahead, sir.

Joseph Furnari

Operator. you, Thank I'd quarter time, welcome to all At financial like results second XXXX conference our this to call. With me Financial Chief Brogi, Scott on the Officer. call is HyreCar's progress and We're the the for future. and to the and insight on monetize update Mobility-as-a-Service excited vision our of we to into our past you provide in how quarter future with that some you today over plan vision

take be this this we forward-looking opportunity remind Before like get meaning during will I'd you laws Inc. the call, within to we securities regarding making started, statements that federal to of HyreCar

Forward-looking to, to company's or the statements or future are include, strategies, other any but events not its statements that predictions expectations, beliefs, limited earnings, express relating statements activities, intentions, conditions.

this expectations, business the current actual could Securities results made particular, uncertainties projections These company Commission. materially projected cause to on are assumptions in from and based with estimates based those that management. part those and statements to implied differ company's These Exchange statements known that risk U.S. by included subject on about the in documents in call, files risks described the and our unknown in are and our factors during or

be could addition, such and to uncertainties related beyond by In statements the affected risks factors control. company's

not we and them law. this are today, applicable based call obligation rely as predictions and statements on make as as of no forward-looking of except should on You statements by to forward-looking on our we future events. required that All undertake beliefs update assumptions

in the addition was a to in measures. reconciliation will at our Investor GAAP and and in measures website today SEC Relations be our non-GAAP filed substitute found isolation furnished may ir.hyrecar.com. with to considered today earnings which release be our non-GAAP be results. also on our not discussions Form may found XX-Q with GAAP non-GAAP materials, supplemental results A and financial as of from These Our include for, or should

have driver period time X,XXX in have in XXXX. with compared in were from we're July. a in QX per XX% new of unique compared year. and leads for the full last quarter to the added to same quarter record In to vehicle. period, over another reported same the as with drivers the $X.X opportunity the of This don't from new increasing unique second but X,XXX XX,XXX million summer, drivers to us when platform new speed XXXX million high qualifying the $X.X averaged we So a the drivers participate in quarter new tremendous ride-sharing revenues a sprinting second added want quarter who match creates requests to at in economy to

The or the and go of of will through Mobility-as-a-Service later over of I offering the rationale funds, timing with the follow-on Scott details second lead touch raise MaaS. the run biggest a placed to proceeds. call, for but the Approximately subsequent the raise of offering all XX% to Securities. was of was Northland longer the with of soft quarter the recognize institutional quality use whom event completion want on for the vision HyreCar's in

forward obstacles potential for into opportunities those results to running the question level. been past as hindrance to into capital at are pilots these OEM to OEM has would that to management began we self-fund, said to it senior dealer the starting up, was moving our that to with but we float had partnership to the of internally, needed conversations the going any potential but This initiatives shareholders our of the raise to accelerated interest balance additional point, and larger sheet the past was up to our if news those We cash the in we've partnerships. opportunities. and growth To in look of a long-term few scale our and scale bootstrap pilots relationships. OEM heat We months, into remove to and felt and are raise size best pilots called dealer opportunities

The all facets on a allow supercharge of from focus us raise the this to with proceeds business technology.

So we the as as development standardized enhancing our a portal, which including talent. program, building by are out back-end ask of OEM engineering was from infrastructure senior partners driver a specific adding dealer well earn-to-own one accelerating

expanding we excited the company that now to given demonstrated have take internally our be gross revenue current say and increase OpEx can cash margin, I'm the also in spend. positive within rates that profit flow

a with investments to also partners. the needed but our operate and with to scale are feel make growth and We revenues the will focus Board on necessary profitable continue management the grow

are made like on revenue dealer need specific current that to We future order be in to and our today capture focused investments initiatives. opportunities

a of current So our forward from levels. there burn will moving be modest increase cash

In Building we car XXX platform. we approximately noted cars dealer representing approximately main representing commercial report cars listed. commercial increased on capacity quarter and listed have first in were initiative QX. our by X,XXX our the XXXX happy to XXX, today, dealer that to X,XXX scaling relationships account themes the call, I'm accounts of XX%

country. large growing time, that We the our inventory roles on board the to dealers -- expect the that the account average formed we quarter-over-quarter newly manager increase team by number in dealer average cars bringing of on on will commercial existing focused significantly the due the commercial to of accounts and dealer additions the of the to expect the groups across newly end include per focused of commercial account the independent addition same mix car dealerships At slightly fluctuate per that smaller year.

leads of commercial from driver last dealers our are of the XX,XXX we've the numbers the The and is XX,XXX on addressable in there constant matches States, this which so started total tremendous, independent these market to and of or put to TAM cars, was thousands into franchise month. available drivers cars our is this scratch United just initiative. ballooning resulting combined context, hundreds over To potential platform, surface opportunity drivers demand needing

More cars as XX over cars in or The opposed one-offs larger with said these geography add will these or importantly, drivers. used X drivers key new franchise X as each geos. to as an top geographic listing only we supply. of hundreds many X now cars have dealerships, commercial match our average we approximately of as of now provide they nodes TAM core dealerships us is in enabling of and regions that per peer-to-peer listed cars These to X have we That to geos geos in do alone X can locations of tranches, account. we accounts XX have X,XXX have in the X,XXX

even rentals, rate. and under and revenue dealers becoming line context, I XX in additional listing run these and put in rate $XXX with XX,XXX OEM our pending but is official, revenue not the for pipeline is take more robust we're X,XXX with on way which active on optimistic am numbers current in to XX,XXX little Mobility-as-a-Service projection regions more a million over an with demand To putting velocity, a current these given future. The I'm of our vehicles. opportunities time mentality pilots initial adopting daily an daily well actives the very

the time, KPI commercial supply become that is Utilization XX% the car a the utilization include: closer of requests, We're XX% as because than reasons will for A time. seeing availability of owner track time rented peer-to-peer few disparity the whereas supply competitive to to for dealers important key quality. our we in also on platform become and to tick dedicated part future vehicle larger is more response exchanges, up this utilization booking of greater the inventory. found pricing

continues inventory expect weigh and shift more overall rates fleets, the of dealers mix heavily and to towards to As utilization increase. we

driver generating site. major the listed and cars growth, revenue these we're on there's future the between leads still represent While our a cars obviously, asymmetry

this we So our gap increase in commercial we platform. to and order dealership people for meet as on and demand to investment scale in demand between our and to supply and initiatives our continue inventory systems vehicles our close

OEM has progress. in partnerships pilots Our on group accelerating currently focused

these low example, the pipeline. churn has pilots been of alone side. from partners has sales dealer XXX dealer positive added For almost Feedback with into our one franchise

of where OEMs created team, portal the to the combined related of technology sales and veteran the vehicles platform. automotive and can integration environment masse efficiently onboard Our has HyreCar tools, executives on-boarding HyreCar our en new an dealers dealership with in

our initiatives partner for collaboratively to to of date a transportation provider OEMs industry with their a both. that and business dealers success helps is model leverage The win-win dealer platform this proving affecting that to core the in in mass the HyreCar businesses is shift monumental

the information a fueling hyper-growth including with platform Games; at a Tesla, technology and seasoned fortified and Vijayan, key Jay and helped Information Michael include software and acquisition Officer leader scale who company, auto Board. Root, digital market-leading initiatives these additions where additions gaming team the had build former Recent our Tesla's customer sales, he thought phase. company's Chief We've systems executive Riot scale to

space We believe been on individuals will a additions as initiatives, has the in talent. the made reducing and scale industry we and what and proven leveraging technology automating Surrounding objectives, product processes trailblazing these has focused key manpower us one technology us platform is of help the HyreCar help key us into continue business future. additional further with key and different such requirements strengthen as leader innovators and experienced attract on my will our perspectives our

from Officer, over our through call to the Financial key Brogi, some details of turn to the second like quarter now I'd to Scott? XXXX. Scott financial walk Chief

Robert Brogi

margin second second was well tiers increased by we Net XXXX, prior the for year increasing growth as revenue or service period of rental primarily quarter. and out to revenue million ending two Joe. higher for the quarter. XX, rolled in to the days the rate net $X.X million X increased the during to as take with second a quarter associated the Thanks, high from same new months the compared June new approximately days XX% the for $X.X million prior the XXX as driven quarter sequentially X% $X.X Revenue net in

to profit Gross additional year $X.X tier, the for prior as $X X dramatically net period the in same ended revenue sequentially our service tier XXX% million prior months XX-XX increased XXXX, improved XX, the for standard margin. The compared tiers, and $X.X X have XX% million from the the to premium the quarter. June XX-XX and million

XXX same XX% quarter. months point as for margin XX% same than margin as million and our staffing levels. increased As noncash opportunities scale for profit $X.X the within and prior to period economies to XX, due million to significant, ecosystem. quarter. This expect is compared expenses $X.X to to improved million new primarily June compared as quarter. Operating up affiliate marketing as in continued more increase the the XX, $XXX,XXX revenue than as was add ended we increased of well XXXX, economy includes that prior support year sequential ended to realize for year for the X% basis prior we X would further the X the a and a XX% prior the months improvement this June digital expenses gross result, the better prior XXXX, period the improvement $XXX,XXX compensation, from This approximately quarter higher I in in $X.X stock-based the

net $X.XX quarters. from loss ended adjusted the and loss X months increased or noncash net it XXXX, higher the Our million favorably decreased or quarter. adjusting XX% million -- $X.XX million share $X stock-based prior $X $X.X $X.XX or million or share and which per to compensation million slight for the period increase the year resulted, in $X.XX After the from $X.X share $X of June this though, per to compares per same quarter share XX, or sequentially prior an was per by prior a for

XX, at December to XX, $X.X Cash million million XXXX, at compared as XXXX. June totaled $X.X

balance key As July, the an over Joe we us To million of fortifies quarter and to $X completed accelerate offering million ago, per period XXXX, into burned $XX this third initiatives. and mentioned, This which after in burned sheet the but equivalents cash included average approximately full XX the as in the public over-allotment. exercise cash million year of half of over put July our quarter. $XXX,XXX the to confidently in we $XX.X the successfully allows growth end, secondary first alone, a we context, of

expand companies transportation and to continuing towards formal to with in to So cash positioned dealership the car network make while pilots by with opportunity we this well manufacturers investing flow raise, are very strategic into profitability. the now partnerships progress drive growth

Joe I'd to the Now to turn to like over back call up. wrap

Joseph Furnari

Thank you, Scott.

dealers positioned summary, rapidly we to continuing to toward drivers, down access pushing vehicle scale so auto enable this platform in to and perfectly are a efforts future called operators Mobility-as-a-Service. the to OEM the fleet We OEMs, dealership fueled suppliers. and growth and capacity accommodate is and has initiatives So macro to individuals HyreCar new by it's MaaS on opportunity. doubling and positive into grow see build Feedback our from we're been our tailwinds,

Driver customers and demand experience incredible conclude, for I believe providing shareholder has inflection term. robust our key is a to a and been continued consistent be HyreCar value forward the point, continues value-add long execution I and look an over reaching operational To focus. creation to driver

I'll over With Operator? that, turn operator. the it to

Operator

Instructions]. [Operator

Our first Grondahl question Securities. will come with from Mike Northland

Michael Grondahl

Congratulations quarter. on the

Just were OEMs number like how attention and at the those those OEMs. dealerships working more. getting OEMs it bit the diving I into going? it's of management But you a traction how sounds or pilots little two of or kind of are piloting was the know senior

Joseph Furnari

geographies we X effort And accounts, managers about of lots and Last it over to key this companies. or XX. dealers, have within That was some commercial X alone, small car call, count account we those focused average per now small XX around has commercial really XX. We've rental up XX, fleet gone geographies. what XX, within quarter,

some team within current starting to and are them to drags So I internal But growth that we're we're because X seeing we've down accounts. really independents, their the I'd small think, that specific of average. accelerate the see repurposed is it inventory adding commercial now task managers, account because on grow car there, with about the

the So of in that half accelerates is the expectation really latter year.

Michael Grondahl

an progressing specifically, have Are domestic and you international to think I and a OEM. expanded those And it. of others? was both any Got there OEM

Joseph Furnari

Yes.

X the have you so in now have had X you two months more or ago, ring. the X that about And that are talked or and their we X hats throwing

are coming take back. XXXX, You a have for was XXXX, X leasing leases on tremendous the specifically dealer that largest back. they of ever. those lease amount it The got, how in buybacks spiffed company year you've many in And where or now leases

the case use And on. really have and dealership we within excited, our a have couple weeks so of next I first we'll now They're think that perfect for here up them. probably signed

So a of there. the -- and figuring providing money out use OEMs lot platform to figuring and the there's We're dealerships and they're they're a for how cases. make

Michael Grondahl

Got Can it. follow it. you talked it. then XXX didn't maybe you just had your And re-highlight what XXX Got in halfway saying? prepared and through, were remarks cars. about I completely Joe, you partnerships

Joseph Furnari

Brian on Well, so specifically, pilots. accelerating Allan, the focused our partnerships OEM group, headed has by

healthy now. pilots -- and mentioned like those of want call, they them of in favorites originally don't and came one and right basically then this had last the started we to with of "I One dealers back one the us said, said -- we franchise look playing X to

into of sales out that Here's inside XXX." those the outside individuals. we our we're the through and our list going going reaching pipeline sales put And and team through team's and so to

Robert Brogi

but highlight sales I the recent Maybe Scott. before it coming of we've that outside knew about to bit. wanted team Mike, And just that onboard. to this timing is yes, I just a talked little add to

a regions in then in salesperson central northeast a seasoned mid-July. the had we We joined and in lead well. in June the people June in joined senior very joined had as lead just and who western So experienced southeast very

we those So trained people all now really up. have

collateral. have We

We'll to alone. So X street, of footprint. Brian now national in fill will, the X fivefold the of you or by kind probably Allan from just amount kind another we've adding if of the increased boots people be out

markets really with And key that those those Joe in particularly dealers so X stepping into are people now mentioned. -- in conversations metropolitan

Operator

come Capital will Mark Street from Argento question our Markets. Next, Lake with

John Godin

John. quarter. is This the on Congrats

on margin. one gross the Just first

kind to those of that to on mix point historical see of this As do the you are how And new revenue coming tiers kind are these revenue forward? continuing two tiers, cars in at premium of migrating going trend what's to you XX-XX. that the

Robert Brogi

tiers, the Great tier. the What X is Yes. on kind seen is This higher the tier surprised the premium question, pleasantly we've uptake Scott. and by standard XX-XX John. XX-XX been we've of

we up QX, say through the So moved converting maybe to that originally as than which premium would owners of as ended X/X, we the new we into X/X, thought I half happen, would kind is car X/X, more opposed seeing of plan. what

revenue profit XX%. kind cars up XX% net in platform really that XX%, shared kind dramatically So from in increased historically on of driving think that's to QX. continuing range a to all of saw the kind something XX% to And that's the QX revenue margin you gross And really of those of that because tiers. going now, have be quarter is going full into the we'll I

that a of and additional that have you direction. opportunities we in some supplement the that see that trend then have, you when revenue So we continued with

John Godin

then of you you've the scale just second, And lot leads, on of up new amount leads. cars kind the you driver a driving higher conversion How get platform, the just in Awesome. driver of new do color how, got some the on as cars but kind it's as the increased on you know maybe of about more platform. kind helping conversion of push-pull going driving two, I between forward? think

Robert Brogi

Actually, drive absolutely. actually than app the the of have at higher leads. of conversions a I a through how that's every day converting to higher conversation that web those rate the is Yes, funnel. know leads we

driver --it's going quarter So is to to people has apps our a pushing through start more -- initiative. third new

we the give said provide OEM-like many that a to focus, cars as the five where can as the there. from have on to now; I franchise then think And that dealers we've we background have leads. they increased and checks been marketing us worked going bugs once recognition perspective, and they're approved; key out have those individuals geos integration through with count of head facial close have all the technologies we go

In I that a rates we conversion, have but lead it keep to focuses from every flat, the up. have, that conversation we and ticking X models those we So see day. higher conversion enable it's

John Godin

us landscape, parts one, new will in last competitive could there? moving you just be you're on And Just maybe any color update more if seeing an there give the helpful. what some

Joseph Furnari

Yes.

We talks the there. able there. There has model we have in the provide competition about IR a been headwinds have to new landscape our that so on still to of deck believe I some service. competitors great the site and the best there's market be quality our into the some slide coming

largest the have they after are population We're We density. by going geographic where footprint. dealers dispersed

that municipalities, of this rural tertiary asset-heavy covered point. competitors all have all secondary, primary, at So we are whereas

we really exploit mousetrap encourage So I this right I look here still And presentation at our opportunity. to analysis the that to have slide. would investors believe competitive on

Operator

we take Jon Next, question Hickman from a Ladenburg. with

Jon Hickman

Joe, can you hear me okay?

Joseph Furnari

Yes, we got you.

Jon Hickman

of talk that's Okay. you bit this leads are driving the driving prepared doing the on your missed Maybe about what this lease-to-own get but these if could that involved want is a programs people I some industry? of remarks from increased and little segment -- dealers to with in who

Joseph Furnari

Yes, yes.

where weekly known walks with a our touched from we And vehicle. So a a where a on rental the of away for OEM and partners now. little dealer of It's rent-to-own a a one or then it we for program was our of it's price months from driver portal have standardized -- a standard program one that bit three asks that earn-to-own the car. vehicle

of and over key that We portal have development to that Tony lead who's months. next charge and deliverables product in here standpoint. from initiatives, our his the of He one a dealer running is Hong couple is [ph] come

plan out. that have rolled So you

not and touch also a now of that have things. increases does multiple service center value of it that. customer, to lifetime also -- And get and they're start gives couple part dealer but our only customer, post-sale renting the with while the It points when enables to that

rolled more I I adoption think think then that at and level. franchise out drives the soon, even that dealer we'll So have

Jon Hickman

like that lost a you've the with X you? stream, walks that if doesn't revenue car away haven't But in guy then months,

Joseph Furnari

XX True, in days three but that our median driver is months. rental locking days now for we're right so

Jon Hickman

Three months? Okay.

Joseph Furnari

if of matter. piece that, other And so early, it's value leads that the now, what even in them that many is are we Xx, have a that lose for is lifetime you we win-win to terms doesn't so it So us.

on replace just And just doesn't as that's We that a It utilization. it. programs. little utilization as matter cars like it bit Think You with staying, and touched of they're occupied. matters the who's well. same

Jon Hickman

One said you Okay. end cars. question. accounts of statistics I as people gave they're you it X,XXX about June? think was -- commercial that the last Was doing of The and XXX like

Joseph Furnari

as today. is of That

Jon Hickman

Today, okay.

Joseph Furnari

Yes.

announced so to we mid-May. as put XXX X,XXX so was That So we into context, commercial with cars. had that was accounts of that when

And as which so it's is an of versus end. quarter today apples-to-apples,

Operator

with take Next, question Group. Klee we'll a Allen Maxim from

Jack Aarde

This Allen Aarde for speaking Jack Klee. is

Most couple of questions asked Just already. answered of my questions. or a were

for maybe were missed So guys disclose quarter? billings did I it the you but what

Robert Brogi

a disclose didn't in It's that non-GAAP of We the details. kind call No. number.

didn't So information. that in no, we cover the

Jack Aarde

was -- or have Would can be margin of from margin. for insurance roughly were quarter? seen to active trying there that if margin about know figure curious quarter, the then I I -- out already you you improve. the was in what guess would you those And -- improvement to the Okay. plans entire have benefit -- significant gross seen something or were It questions gross we to new that that. it entire the if If quantify nice are the I'm see measure for where the active kind gross was would

Robert Brogi

done would add but the couple another conversions gross car we full of basis haven't it a mean I points average Yes. throughout like of margin. hundred profit weighted to probably QX,

Jack Aarde

come guys down, Got has although and for Okay. couple it. it's quarter. the about and maybe pretty the cash burn comp -- significantly increased quarters, stock-based And increasing you of this next for modestly as talked then

remainder the think increased is to any level if relative the trying we maintained is compensation OpEx today that about percent should So of stock-based where going to understand how as and a year, be of to it further? revenue for I'm or

Robert Brogi

Yes.

a have that who to some a couple had we deliverables. incentives so mentioned, there we adds a way, chose with SBC Board as costs that the have Joe to in the couple our added of quarter do aligned think folks handle were -- of and of significant kind we I legal we then

those you'll Board of QX saw in you both in I much QX. think things. change I don't So of of see a side hit think on the

we may QX. in employee-based some but component legal where that should have probably So significant. about it And be was not increases then

would absorbing line. OpEx top that be to So to of as we we the expect more continue grow

Jack Aarde

helpful. along. continue good very quarter, to see that's to it's track Great revenue And Okay, guys.

Operator

next, Howard with we'll And go to Halpern Taglich Brothers.

Howard Halpern

Congratulations, have of anticipate? the on, be be the But those technology technology how guess, previous, one do expense guys. in going of next enhancements then to questions Like been most have type incremental to that over enhancements. the I What I asked. the able XXXX? believe you you And year do are leveraged do

Joseph Furnari

think Well, have that's traditional scalable the you on Michael CIO has from and built on and Root because have Jay you you gaming architecture a like Jay focused leveraging, I qualitative back-end a coming have who combination Michael solutions. and product and as perfect standpoint, then that's for

that's heads, those leveraging and connections think place. in is in pools And bring -- first some brought we of to so developer I qualitatively, why the their them

you in high-level challenges that -- add think Scott think and have I really move us up devs help there, there. the then high of level, financially. some qualitatively, and then And we shore I So from bring would to we'll the strategy

Robert Brogi

following in a scalable Michael's Los cloud-based Yes, I particular. in strong based Jay but gaming Angeles. very here Michael in right And California, technology, has is the think infrastructure Northern in

well team as identify the continue portal engineering that on that us both to roll some want faster dealer internal grow. actually we're enhancements we can some with to and working as talk talent our to So to him out go closely with help now back-end can

earlier. that investment part Joe sequential was it would significant the So in of a kind be I terms don't OpEx, think that was increase about of talking but of

there allow in that us mix again So really car dealer adds of into supply. move to continue there initiatives, probably the we faster will improve to be as to some particular,

Operator

for conclude question-and-answer does to Furnari over remarks. today. that call back the I'll closing turn session And Joe our

Joseph Furnari

through our but today. forward you. operator. again you Thanks, to progress for of I you XXXX. look update Great. continuing to Thank have on We the joining don't balance much, thank us

Operator

That does conference your conclude today. Thank you our for for participation.

HC Liquidating (HYREQ) 14 Aug 192019 Q2 Earnings call transcript