Q2 2018 Revenues Increase 260% to $2.3 Million; Gross Margins Increase to 47.4%
Company Reaffirms FY 2018 Revenue Guidance of $10 Million; Expects to be Cash Flow Positive by Q2 2019
LOS ANGELES, August 13, 2018 – HyreCar Inc. (NASDAQ: HYRE), the carsharing marketplace for ridesharing, today reported financial results and provided a corporate update for the second quarter ended June 30, 2018.
Financial Summary:
1 Adjusted EBITDA is a non-GAAP term and excludes non-cash items and stock-based compensation. Please see “Use of Non-GAAP Financial Measures and Reconciliation Table” below.
2 Gross billings is a non-GAAP term and an important measure by which HyreCar evaluates and manages its business. The Company defines gross billings as the amount billed to drivers and other customers, without any adjustments for amounts paid to owners or refunds. Gross billings include transactions from both revenues recorded on a net and a gross basis. Please see “Use of Non-GAAP Financial Measures” below.
Recent Operational Highlights:
- Added 1,837 new drivers to the platform in the second quarter of 2018, as compared with 978 new drivers in the prior year period. HyreCar’s average daily active rentals increased 181% to 1001, compared with 356 in the prior year period
- Announced a partnership with a Transportation Network Company (TNC), HopSkipDrive, a leading ride share service for kids. This partnership is for the Denver market, allowing drivers to find and affordably rent large capacity vehicles.
- Successfully completed an initial public offering in June 2018, raising net proceeds of approximately $10.8 million, after deducting underwriting fees and offering expenses.
Management Commentary:
“Our record revenue of approximately $2.3 million in the second quarter of 2018 was a direct result of increased demand for car sharing services,” said Joe Furnari, Chief Executive Officer of HyreCar. “As we reach critical mass, we are also starting to see some operating leverage in the business, as evidenced by our 14x increase in gross profit during the quarter. Given this operational momentum, we expect to be cash flow positive by the second quarter of 2019.
“Our strong adoption to-date is a result of our unique marketplace platform, which matches drivers with car owners, while leveraging HyreCar’s proprietary insurance offering that ensures a driver is covered while ‘off the clock’ with a ride-sharing company.
“During the last month, we signed strategic partnerships with HopSkipDrive—which allows us to connect drivers in the Denver area with large capacity vehicles for child transportation. We then secured a strategic partnership with the National Independent Automobile Dealers Association, which has over 17,000 dealership members. Although these partnerships are in their early stages, we believe these relationships will contribute to our revenue growth.
“In summary, our model is being proven out in a meaningful way, with the ‘right solution’ at the ‘right time’ that alleviates the supply bottlenecks facing the ride-sharing market today. We look forward to continued operational execution and stockholder value creation over the long-term,” concluded Furnari.
Second Quarter 2018 Financial Results
Total revenue in the second quarter of 2018 increase 260% to a record $2.3 million, compared to $0.6 million in the second quarter of 2017. Sequentially, this represents an increase of 33% when compared to revenue of $1.7 million in the first quarter of 2018. The revenue increases were primarily due to the growth of the Company’s business, which resulted from the expansion of the sales team, increased marketing spend and brand awareness.
Gross billings (a non-GAAP term) in the second quarter of 2018 increased 185% to $5.2 million, compared to $1.8 million in the same year-ago quarter. HyreCar defines gross billings as the amount billed to Drivers and ancillary sources of income, without any adjustments for amounts paid to Owners, refunds or rebates. Gross billings include transactions from both our revenues recorded on a net and a gross basis. The Company believes the gross billings metrics is useful when assessing the health of the overall business. Please see “Use of Non-GAAP Financial Measures” below.
Gross profit in the second quarter of 2018 increased significantly to $1.1 million, compared to $72,000 in the same year-ago quarter. Gross profit margin in the second quarter of 2018 increased significantly to 47.4%, compared to 11.4% in the same year-ago quarter. Margin expansion was driven by a significant reduction in insurance premiums, a reduction in refunded revenue, and increased referral income.
Total operating expenses, consisting of research and development, sales and marketing and general and administrative expenses, were $4.2 million in the second quarter of 2018, compared to $0.8 million in the same quarter of 2017. The increase in operating expenses was primarily due to non-cash, stock-based compensation of $1.9 million recognized in the quarter and one-time professional fees associated with the Company’s recently completed IPO.
Net loss in the second quarter of 2018 totaled $5.0 million, or $(0.92) per share, compared to a net loss of $0.8 million, or $(0.19) per share, in the same quarter of 2017. The increase in net loss is primarily due to two non-cash line items: 1) non-cash stock-based compensation recognized in the second quarter, and 2) non-cash interest expense incurred in the second quarter from the conversion of the Company’s 2018 bridge notes into common stock during the IPO. Of note, non-cash stock-based compensation and converted interest expense in the second quarter totaled $3.7 million. A majority of the stock-based expense and all of the non-cash converted interest expense were one-time expenses related to the IPO.
Adjusted EBITDA (a non-GAAP term) in the second quarter of 2018 totaled $(1.3) million, compared to adjusted EBITDA of $(0.6) million in the same quarter of 2017. Please see “Use of Non-GAAP Financial Measures” below.
Cash at June 30, 2018 totaled $11.9 million, compared to $0.2 million at December 31, 2018. The substantial increase in cash in the second quarter of 2018 was due to net proceeds of approximately $10.8 million received from the completion of HyreCar’s IPO on June 29, 2018.
Full Year 2018 Revenue Guidance
For the full year ending December 31, 2018, HyreCar reaffirms it guidance and anticipates revenues of at least $10.0 million, an increase of at least 213% when compared to revenues of $3.2 million for the full year ended December 31, 2017.
Conference Call
Management will host an investor conference call at 2:00 p.m. Pacific time on Monday, August 13, 2018, to discuss HyreCar’s second quarter 2018 financial results, provide a corporate update, and conclude with a Q&A from participants.
To participate, please use the following information:
Date: Monday, August 13, 2018
Time: 2:00 p.m. Pacific time (5:00 p.m. Eastern time)
U.S. Dial-in: 1-888-394-8218
International Dial-in: 1-323-701-0225
Conference ID: 2678779
Webcast: http://public.viavid.com/index.php?id=130686
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the call will be available through August 20, 2018. To listen to the replay, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally. Please use the replay pin number 2678779.
A webcast will also be available for 90 days on the IR section of the HyreCar website or by clicking here.
About HyreCar
HyreCar Inc. (Nasdaq: HYRE), is the carsharing marketplace for ride sharing through its proprietary technology platform. The Company is establishing a leading presence in Mobility as a Service (MaaS) through vehicle owners and institutions, such as dealers and OEM’s, who have been disrupted by automotive asset sharing. HyreCar currently operates in 34 states and Washington, D.C. providing a unique revenue opportunity for both owners and drivers. By providing a safe, secure, and reliable marketplace, HyreCar is transforming the industry – one driver, one vehicle, one road at a time. For more information, please visit https://www.hyrecar.com/.
Use of Non-GAAP Financial Measures
The information presented in this press release includes financial measures that are not calculated or presented in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures comprise Adjusted EBITDA and Gross Billings.
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) adjusted for interest and financing fees, income taxes, depreciation, amortization, stock based compensation, and other non-cash income and expenses We view Adjusted EBITDA as an operating performance measure and, as such, we believe that the GAAP financial measure most directly comparable to such non-GAAP financial measure is net income (loss). We present Adjusted EBITDA because we consider it an important measure of operating performance because it allows management, investors, debtholders and others to evaluate and compare ongoing operating results from period to period by removing the impact of our asset base, any asset disposals or impairments, stock-based compensation and other non-cash income and expense items associated with our reliance on issuing equity-linked debt securities to fund our working capital.
Our use of Adjusted EBITDA has limitations as an analytical tool, and this measure should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP, as the excluded items may have significant effects on our operating results and financial condition. Additionally, our measure of Adjusted EBITDA may differ from other companies’ measure of Adjusted EBITDA. When evaluating our performance, Adjusted EBITDA should be considered with other financial performance measures, including various cash flow metrics, net income and other GAAP results. In the future, we may disclose different non-GAAP financial measures in order to help our investors and others more meaningfully evaluate and compare our future results of operations to our previously reported results of operations.
Gross Billings
We define Gross Billings as the amount billed to drivers, without any adjustments for amounts paid to car owners or refunds. Gross billings include transactions from both our revenues recorded on a net and a gross basis. As a non- GAAP measure, Gross Billings is not recorded in our financial statements as revenue. However, we use gross billings to asses our business growth, scale of operations and our ability to generate gross billings is strongly correlated to our ability to generate revenues. Gross billings may also be used to calculate net revenue margin, defined as the Company’s GAAP reportable revenue over gross billings.
We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP.
Forward Looking Statements
Statements in this release concerning HyreCar’s future expectations and plans, including without limitation, HyreCar’s expectations regarding its revenues, operating expenses, gross billings and other financial results, the success of its strategic relationships and the continued growth of the ride-sharing market, may constitute forward looking statements for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 and other federal securities laws and are subject to substantial risks, uncertainties and assumptions You should not place reliance on these forward looking statements, which include words such as “believe,” “intend,” “may,” “potential” or similar terms, variations of such terms or the negative of those terms. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee such outcomes. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, as well as those risks more fully discussed in the section entitled “Risk Factors” in HyreCar’s prospectus, dated June 26, 2018, that was filed with the U.S. Securities and Exchange Commission under File No. 333-225157, as well as discussions of potential risks, uncertainties, and other important factors in HyreCar’s subsequent filings with the U.S. Securities and Exchange Commission . All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Note: The attached tables are an integral part of this press release without which the information presented in this press release should be considered incomplete.
The following table shows our reconciliation of Net Loss to Adjusted EBITDA for the three and six months ended June 30, 2018 and 2017:
The following table shows our reconciliation of our GAAP reported revenues to Gross Billings for the three and six months ended June 30, 2017 and June 30, 2018:
Media Relations:
Ronjini Joshua
The Silver Telegram
HyreCar@thesilvertelegram.com
Investor Contact:
Ted Haberfield
President, MZ Group – MZ North America
HYRE@mzgroup.us
www.mzgroup.us
HYRECAR INC.
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