- Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen. My name is Keith, and I will be your host operator on this call. Everybody, please note this event is being recorded. I would like to turn the meeting over to your host for today's call, Miri Segal, CEO of MS-IR. Please go ahead, Miri.

Miri Segal

thank for and us operator, you, you joining all today. Thank Results Otonomo's Third to Conference Quarter Welcome Financial Call.

statements to begin, in those remind future Otonomo. discussions forward-looking Actual you we events the that are Before I financial differ our forward-looking today would and the results will statements. performance relating could and anticipated uncertainties risks like future to and to subject of include from materially

obligations today speak and only to publicly as them. expectations revise today, no made our we of undertake statements to or update Forward-looking

filed For a Factors factors time to forward-looking results materially discussion Form and of the SEC. by the Risk important with documents with any of section some to Otonomo that risk of filed from statements, from the SEC XX-F actual time could see Otonomo's please cause the differ other

If website. a you earnings of please download of Relations call from a press presentation. Today's the by will release, the section have the accompanied PowerPoint Investor received one company's copy not be

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overview share an will financial Bonnie results. Next, the of company's

for Otonomo’s We session. please over Volkow, Ben, I'd the go live the call like will to ahead. then turn to that, CEO. Ben the open With call question-and-answer

Ben Volkow

thank line you, Hi, quarter-over-quarter positive encountered financial continued market, Otonomo’s new for indicators joining Miri. headwinds high watermarks. softness basis. Thank quarters, run everyone, with results and quarter key reaching growth, the did macro-related all you our the of call. XXXX of third We strong our in top growth QX conference due on in see saw still we we to some our primarily performance but

Accordingly, Even continue in challenging. line as with the our across QX, continue be of we we adoption recognize in demand offer adjust our investments services to continues areas strategy. see focus to to evaluate and our that rate sector, and growing mobility sub-segments we our we in in

will We in our management. conservative cash continue to be

Otonomo. the will providers insurance insurance. connected vehicle the success saw we've sector with existing significant Our in received transformation FloowFusion alliance new capability slows QX had data easily Since data. customer progress September, that well releases, very fleet the have With of for accurate additional demand and as start, strategic insurance product bolster meaningful with way We sources we mobile connected competitive offerings a for announcements. have the create can To think offerings feedback that telematics policy catalyst carriers leverage include be growing usage-based FloowFusion insurance accelerate leading to and meet smartphone-based we the announcement insurance marries breakthrough large and discussions market to progress. to advantage. a In a QX, deliver highly data in to number as with that adoption of sector build highlights key FloowFusion, new a to vehicle in in solutions positive continue also

X.Xx. XX,XXX example, and process platform normally of Otonomo on Otonomo the to one thousands In platform. onboard vehicles using particular than telematics. vehicles more thousands the we would fleet the a of take work First, hardware-based This number increased hours partner closely to with

However, software-defined our the This operational of to through continue This regulations level able to of one aside currently our to fleet in bring set clearly Otonomo installation to system fleet the and economic partners was why have demand a hardware while fleet operators and privacy operators. and interest telematics cause day, compiling via fraction and achieving onboard we all see telematics the from demonstrates of for maintenance. the time use can revenues. the and vehicles with is automation value sector

and our to our announced key scale app sector is products. technology in we In partnerships. to also continue cloud the force strategic update go-to-market via new Salesforce Otonomo sales an fleet the OTO the develop that We and a for provided powering July,

providing we connected were to with are partner, empower data. Salesforce solution a car launch dramatic As the Salesforce

safety to can the dealerships, execute and customers We are about and version status targeting reach trigger dispatch costly insights financial car and solution fleet. connected geofencing software-based the enjoy hardware. OEM The entire enhance this and capabilities. customers allows ecosystem and workflows, expensive telematics a The data, without upon and data actions, app and latest monitor enables of super to specific are the from build customers partnership. data, mobility extract driver close vehicle Otonomo distance excited Utilizing fleets access location

management cloud-based based or SAP revenue models data, for collaborative recently solution the our companies central The with Digital with and and Vehicle new Hub. Smart Finally, with news turn, offer for a streams Hub clients their insights derive SAP streams. and and between QX Otonomo streams weeks we Vehicle close just Platform show to in hope going would with the chain. new connected that vehicle-related the of The with active automotive repository new and announced Data and we By value is I for stakeholders value alliance revenue months. we the vehicle new that and continue businesses. and by have be mentioning maintenance that, for to the enables on The data and SAP coming additional on in enables data. app data fronts create strategic value both value clients relevant mobility generate vehicle also Mobility integration Digital Digital exciting combining vehicle Vehicle integration on OEM insights can fleet business highlights

see earlier, attributes I continue to to are that in As indicated business. our we key momentum

market. to of recurring to continued business highlights number million, of new of the XX% is XXXX. the use quarter quarter of growth agreements in signed see Bookings recurring during revenue XX% and increase revenues Those QX. of had customer and in million, generating which cases of and was quarter increase. of of third by XX a And we for XXXX, Otonomo customer the are was interest recurring record demand XX% XX, grew an and Backlog our Some remarkable car third as the of connected new quarter-over-quarter. we the strength continue show revenues. We September million. results XX% third of third market the revenues $X.X our for the for reflects quarter-over-quarter grew agreements core for as $X.X autonomous XXXX, $X.X quarter Annual

Jua, floating impact geographical of models, uses Sydney, firm to research operators an and understand for data syncing, development analytics prediction current vehicle and GDPR example, sole mobility infrastructure shows in provide. developing a the and historical AI Australia. compliance the weather that connected stores data car wide modeling For company due Otonomo to coverage purposes we

and delivering seeing leading press our yesterday, accessibility efficiency Ramboll, we addition, for with consultancy the agreements. customer data value real-time to is creating and global are using Otonomo announced In release, new momentum integrated historical improve latest for by users. tremendous we a segment, from sustainable solutions In and fleet safety, clients

fraud to fleet turned our the finally, software. its vehicle Some that company, its for a of Otonomo connected to provider of connected using in provider power hundreds asset aim offering vehicle across tracking [indiscernible] recovery fleet car customers And management which better such EU. to shows fleet enable to hardware-based OEM detection platform these the telematics away as and includes a as expertise with transition Otonomo and a that selected Legentic, data. of support management working to product Otonomo support data company And GPS from

can across development, product customer strategic yet you was and quarter see, alliances wins. customer another it new strong adoption, As

for Bonnie Moav. Now CFO, on more Otonomo detail our I'll hand QX to over it financials,

Bonnie Moav

data Revenues you, of quarter quarter Thank for Ben. XXXX million The XXXX. of driven vehicle contribution flow compared by the the reached primarily and the for our X connected third to core was third growth in revenue. growth XXX,XXX

goodwill. Non-GAAP The remind items. and I of numbers, of acquired is the depreciation, liability excluded move expenses impairment presented I to you compensation intangible related contingent assets, that non-GAAP further Before acquisition want and amortization expenses, consists intangible into of Floow items stock-based to these information our

GAAP with turn now be in for and financial non-GAAP results between will to financial detailed GAAP the I quarter. results Our the along results earnings can found the release. reconciliation our

Our million offset $XX.X liability, income of a in XXXX contingent loss impairment $XX an and charge million, $X.X of loss of includes compared third to by in million. for million GAAP the $X.X was The operating XXXX. QX which operating goodwill intangible, quarter decrease created

operational increase non-GAAP driven quarter related $X.X $XX.X and intangible compared in assets. third for to expansion of acquisitions. operating the the expansion, the was the amortization third by acquisition operating XXXX, loss loss mainly and was by quarter, driven GAAP companies of In In new addition, of new million operational million

Our of our our used in to amount and attributed data related The cloud to by the $X.X infrastructure in expenses the from of of data increase QX costs company increased customers. XX% $XXX,XXX to third-party amount QX XXXX. and ingest, XXXX which process, services primarily consist by data in stores cloud the growth is million

and an we addition, data which to the data in of other our their purchasing $X.X reflects of the of providers of products. for the a paid result the Cost increase OEMs The acquisition increased used cost data Floow. of and of million, as Neura include revenues XXX% cost In year-over-year,

million is $X.X to related The addition, services the customers. provided cost In to Floow of

over year sales $X.X and non-cash quarter mainly due development headcount $X.X $X.X and compared third to of XXX% million million of to an and performed company’s the expenses goodwill XXXX reported impairment which of recent for XX% charge Our intangible non-cash XXX% quarter were the to $XX.X unit. XX%, a a of test affecting the the consolidated workforce factors was were increase. representing company due this impairment resulted sheet. and recorded growth of considered in statement assessment and the including same an period recorded goodwill the assets million, the third Neura increased decline the respectively, and which QX Floow. and In write-off $X.X research possible interim our of The recent XXXX Management the the in other year-over-year, of increase XXX% of of a capitalization. expenses completes the XXXX, QX and in for of test, charge by outcome along by acquisition with intangible in balance marketing which The General the was ago, administrative market decline XXXX. the The amount mainly financial our and respectively for expenses full and triggered million previously in million,

cash million Turning the we over million restricted activities. ended cash $XXX.X balance in driven turn Floow quarter cash used The of long-term in mainly Ben. investment, equivalents, $XX.X short-term and now, back and the was XXXX. And I cash, it by sheet, to This from to will $XX year cash, operating a decrease $XX.X million end with investment million deposit, in

Ben Volkow

Bonnie. you, Thank

call, with transformation. in play market today's any uncertain despite quarter or was economic which of in rate headwinds larger highlighted adoption, new the creation a As with growth and Otonomo, QX for continued comes strong

the reduce to be actions continue taken prudent over into this come course We expect play costs year with XXXX. the that expenses to of will and

than of in In QX. to XXXX last the revenues Our XXXX more quarters. acceleration we revenues period, strong to Xx same momentum today. about expect into coming XX% and recurring accelerated recurring quarters, growth of this grown continued strong that translate from the signal to are the we in we have three and in have revenues the to poised end XX% a continue bookings have In we

we data road quarter-over-quarter in the the derived vehicle equally in onboarding growth and a see our and we cars of insurance segment, the development excited our sets, in from X.Xx to now where broader are with products of demand focused questions. the about product connected fleet new progress We car in is connected ranging the business for data safety. main with connected In position strategy to segment, the beginning persistent Operator, number segment, as the and and ready are unique traffic data see player the off. to take we planning curated go-to-market pay

Operator

session. Nichols B. At [Operator Riley. question will begin from we Josh question-and-answer this the comes And Instructions] Thank first time, the you. with

Josh Nichols

was a Thanks about detail, a quarter the Yes. the my what for was. targeting wondering little you half look halfway know But the of some Is was like to the flow is bit more were weighted. that cadence in clearly, I if beginning fourth through to of what with the provide expected year, the question. I just could level softening and taking on revenue be higher outlook that, this juncture. broader XQ? I'm we're from at right, at curious you to expected there's materially been XQ up be back going economy. the

Ben Volkow

good question. a Josh, it's

we I But the challenges and are that add a will we from be very Definitely, won't and how forecast year. not providing at QX. strong finish quarter. -- continue this have, we that in we time, the that believe All is had the same we can bookings encouraged just of to anticipate a up any what shared wrapped previous growth market. at are of year, the are the we time, stronger We we in or until We expectation, end the the strong quarters. there we in terms can backlog so But the excited, that share forecast we for very see not of

Josh Nichols

like quarter, to where last for guess to least quarter-to-date? to is first it for or guidance the the like willing of you're is like I quarter, it at what similar or quarter we've fair not half Yes. seen say give

Ben Volkow

right market. again, You figure what or from we see of not the and cannot are of in like stronger are be, like QX was of just growth. how quarter. the also that macro us we the focusing the revenues, affecting We're bullish But but encouraged what Yes, building will work in I is a everyone lot not [ph] chamber strategy the revision the the that just if because very so we limited strong the say. not we half can exclusion continue previous compared provide first QX or we in booking, yet and revenues, very the feel quarter weaker? comment -- on on ones, this else. think to is the It's to got definitely recurring We on we but

Josh Nichols

that you more So about as we prudent on macro little decision, Fair probably more KPIs talked opposed enough, focused good have. Can you've term that's right? bookings about balance? to bit backdrop previously, those the the about are a I like revenue. admittedly given think, near being cash that you a talk

to basis? what's million So the a a that going good going non-GAAP of terms we to operating had baseline Is forward? that XQ, that as like of expectation cash is $XX.X around in loss go-forward a use or bit, burn come for little in your

Bonnie Moav

Yes.

for Bonnie. you So the this Hi. question. is Thank

we of for quarter, rate. cash cutting always our quarter QX to non-GAAP cutting in We some next cost of per our to continues is indicative this additional for non-GAAP indicative say single start be will savings in did to save, initiatives that started that rate. but that not year, cuts, some impact X% we pretty are reduction burn also as can and play decrease factor in digit flow with did looking that next year. the see do the X% the that QX, we as those you will rate. early in to well We help cost this full XXXX. early We good full labor and yes, believe cost now infrastructure to cash year managed will will that see range us in And the burn we burn in some in So, force cut the that third-party the the the

Josh Nichols

over of partnerships, Great. real are these you Thank helpful. or revenue that these earlier think six say, detail guess, these? the the new signed, months, of the opportunity on or be trajectory exploratory that you is would a you if providing company revenue I two the for near-term opportunity could touch any And the one kind the there the, for there. provide to most that agreements if on agreements more XX next

Ben Volkow

I'll excited Salesforce The the This Otonomo really share that Digital we very the partner definitely telematics connected on data. opportunity in address ongoing. here. -- to inside, six to Ben. - with with also is is October car real the get we powering better announced I vehicles platform timeframe SAP partnerships a see to and is newly So we that to and today's and we Similar partnership SAP, covered And is industry. vehicles connected DVH the the it. transparency I and also, there share the software announced them try pilots approaching real that revenue Hub ongoing is hi. Salesforce with are can should anticipate ongoing, months that can call say, Vehicle The automotive that here, thing. organizations addressed of trials product feedback within discussed. the new Also very, two the in SAP. XX here the they revenues out and with I paid and value enabling pilots connected -- are data. in

and the right the terms in things. for this hope predict are I excited answers to very all are we this started bring that the those always year. So revenues this business and has real revenues. coming -- of partnerships case, in this we foot Not will question. to materialize what In real the on

Josh Nichols

don't to the hog I Q&A. want Yes.

final a me. just question for So

once revenue, you're basis getting being the profit you cloud If infrastructure adjust to on cost look revenue, close also those but company's costs, breakeven. but you the a storage gross at for

know storage to revenue infrastructure cost the a positive cloud on this the cloud bit. storage be $XXX,XXX adjusting negative you level revenue at to are were you COG, I what expecting costs. I down go up also for costs both, year. but so a the sold basis I little that continue said, to or like think But going to are goods

Bonnie Moav

I years us think two breakeven. So the we've to around take that in years past to three shared it will

we other this what can't a the stand the you depends other revenues will share on will map. lot behind a revenues we point of what is -- on I grow. as of us number can lot that that we a products of have with at years road think breakeven, up make things and I

So an that I can't give you to answer accurate question.

Josh Nichols

back you. Thank hop queue. I will Okay. in the

Bonnie Moav

Thank you.

Ben Volkow

Thank you.

Operator

Thank you. the Instructions] Wilmerding comes with next question And Harry & from Company. [Operator Needham

Ryan Koontz

Hi, sir.

Sorry, Needham. Can with this is Ryan hear you Koontz me?

Ben Volkow

Ryan. Hi,

Ryan Koontz

ask in the Hi, to the terms correct? new Is penetrate like for relationship. dealerships. about Ben. sounds Salesforce It wanted Salesforce that to is a I this market of

Ben Volkow

agree. I

they get business there, think what some think it more I few are much to limited going are the to I that but they doing in planning months. next compared was

Ryan Koontz

Got it.

market. remain I big near-term as your fleet kind your and So more be prime think revenue pipeline, to assume hopefully picture more not And those them and next could I to here insurance you the think focus you of much XX powerful look kind one with great. data go your at a regards gives months that two, your of and for the agreements do product That's which pipeline? the -- after company between material that

Bonnie Moav

matured. have mature and already obviously, company its insurance with acquired more the segment, more relationship that flow existing companies. insurance the So We ongoing

drastic revenues significant do have an and connected of the most coming this them in And for in we We growing the throughout and fleet beams see our generating numbers a new year. we from QX XXXX. in remains increase this percentage a is us. like see the for obviously, fleet, market will very So

in fleet are we and in to grow I to that definitely bring insurance next our to growth there continues continue will it year the generate think So is XXXX and lead that anticipating results.

Ryan Koontz

you're costs kind it. of keeping on all I your like history And of commentary a around Got lastly, back you're not assume That's helpful. circle there. the ingesting. data cloud

of really on financially you're that -- collecting probably than process your the on focused paying advantages Is rather basically for and that the are very you. all processing cars, wouldn't all history correct? would for data be which customers data You're

Ben Volkow

for In a No, that's data use for not some cases more data. always case. longer. Historical the we scenarios, maintain value real-time is than some data the

just cloud, much understand of the real months For historical they example, It's go months ago today, usually and what in or DOTs in we ago. not data, also changes happened happening do, will six to time, not lower what's the fee. can okay. to it like nine second that, they or the but maintained in take because The cities data want what millisecond. that need Having a to to said it's access cost a out take archive not

associated some it current way we historic the data in it costs. a we maintain our impacting hope and in low So a it way answers to cases, maintain not I but the is in cost question. that

Ryan Koontz

much. very It does

So, Thank me. it you. thanks. for That's

Bonnie Moav

Thank you.

Operator

Thank closing you. to Volkow, like any And this for concludes the return question-and-answer session. CEO, Ben to I floor comments. the would

Ben Volkow

call. Thank you our Thank you, us next forward everyone, in We for joining you. to look today. seeing

Operator

you. today's Thank Thank for has now conference attending you The presentation. concluded.

now may lines. disconnect You your

Otonomo Technologies (OTMO) 16 Nov 222022 Q3 Earnings call transcript