HC Liquidating (HYREQ) 14 Aug 202020 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the HyreCar Inc.

Second Quarter 2020 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, August 13, 2020, and the earnings press release accompanying this conference call will be issued at the close of the market today. is Joe today Scott and call Brogi. our HyreCar's Furnari; CEO, CFO, On turn to call will the I now over Joe Furnari.

Thank and welcome conference thank you, second and XXXX call. you, quarter to operator, our everyone,

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

risks materially statements are cause the predictions based results included but that and include, These in not risk Securities and files to uncertainties management. other in company's those are or assumptions from particular, Exchange business our company's with beliefs, statements documents Commission. the These statements during statements conditions. that to those express about in limited actual projections earnings, Forward-looking unknown that subject on future this differ part made factors strategies, or intentions, our expectations, and any or to estimates activities, implied projected on in call, relating and its company to, by described the based current could the events expectations, U.S. are known statements

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

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

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

a was because quarter So, the unique tale stories. of second it was two

QX last because a included the of seen on lowest delivery first this on and April for that days of and by we March. delivery opportunities on decline April. the platforms the other snapback the XXXX web rental and by rebranding portals, to and in had emphasis new has business to And see rental to rest by second will week the lockdowns started almost of of company rentals reopening, to in have COVID return service retraining weekly emphasis We growth our XX%. expanding messaging, day our government-imposed the weekly support weeks in HyreCar world. in highest one saw to active remain due sustained week rapidly This the see rate and effort delivery week have our Because focusing not approaches And COVID. in since week XX,XXX in established rental an growth that was of release, can the delivery a and you of in ended June, March, of expects now continue rebound April. The approximately continue we creating since leadership the conscious marketing to in and XXXX, and that Subsequently, nimble we even approximately coverages July business app It history. with XX% the over -- COVID-XX. The counts week face is with spend of are retooling on persevere growth a side, expand best model day engine quarter to that team a shareholder the see of our on confidence the lowest increase company XX,XXX, off to of and this an fully responded sales of delivery. city identifying the a mid-to-late the we to investors grow COVID rideshare forward additional the platform differing for drops as to continue fluke. state effort, through at the delivery with side, late to and the should earnings One our since This environment and that optimistic number services staff, cautiously scripts, in has talk from with its our with rental day growth becoming week uptrend. the growth. now XX,XXX and new first going rental for days insurance give started in April of due post clear grown in months slowdown can the affirming any our consistently rental

is As clear move is of delivery Hyre economics COVID, declines and delivery become to making than even XX% allowed combination What business is into The emerging. for fifth states plus our partners their TNC to at and anticipated. we are what businesses. a package has we HyreCar's new normal into month strong food level, service better the fare regardless platform that of the our expansion rideshare economy of there seeing happens the in macro has had than a bigger rideshare remaining reopening

just XX% year-on-year. QX, ended X% quarter and we sequentially down up For over the

that grow quarter. quarter third growth to and teens to again sequential the to $X.X COVID, expected $X.X million in between and return fourth revenue million the to saw before we revenues mid-to-high be expect in We with

So driver when quarter. the this paired up strong unique increasing with car drivers of we continue the rates in new had pick supplementing revenue We demand helped which retention June, drivers seeking from customer X,XXX over for services a in during delivery month delivery see vehicles slowdown. rideshare because heavily recover to income are second

reopen, up. also move will pick As believe to we we to and driver forward start rideshare start states demand

favor to for call, Hyre's business. other and Malaysia, are personal the forms avoid For bodes order of in above recovering example, points in well In opting of continued to conference floated customers transportation, and core rideshare were crowds, levels. of they rental ridership in from Uber's out U.S. has Kong seeing which Hong transportation public and ridership pre-COVID

On the car are customers. platform from existing on the new front, sourcing cars predominantly

most franchise cars and slowdowns As dealers plating independent from have of registering because closures. new have DMV seen

However, a plans recently to expand car who partnership discussions and with up we this see the in of XX pickup past we as ramps demand months. tenfold a onboarded rental have begun over car to cars is couple rental agencies, site our fleets regional quarter. with rental to One agency, large listed Southwest a coming

needed. companies fleets have they onboard to important partners. than dealer dealers want fleet and In much types that addition, complement and in are grow These traditional to of larger sorely have partner cars companies we regions begun our where

accordingly rental a fleet expense a dramatically cash more sure us by including to the full We in larger expect of insurance reducing has A adjust cuts I paid halt at cost from to costs damage due this quarter, new big payments resulted Ultimately, be an million, reduction with to moved in The QX, an get In increase in incidents, our these was costs to toward the decrease growth from enhanced make our quarter, runway insurance the to fixed vendor the premium agencies monitor of streamlined markets. coming levels QX continued Apollo new during reserve extent become component up program management. of reduction number reduced profitability weeks with realized. and in see of will have claims to million, physical to will stepping are eye prior will were even $X.XX lower of hiring partnerships our claims risk believe respectively. continue allow and a OpEx and reduced be our and XX% claims sales the renegotiation contracts. of insurance We'll underwriting they insurance XXXX. as we've XX% relationships profitability. liability KPIs variable payments. spend to $X.X in announcing and and and as and and Operationally, our the a

growth. turn result we a background telematics billing I'd driver plan everything model, to On Officer, the and With into solutions, and relative steps time, our payment risk enhance in to like profitable criteria, optimizing new some sustainable tapping multiple tools. model. quarter. multiple walk optimize to have to damage our rental through management the front, and that, call claims physical should Scott? Chief Over details to financial Financial investigation to Brogi, over The the the check expense outsourcing claims our these fraud now underwriting measures business our key taken active of including Scott from is from claims

And thanks completed June rental second our annually of in XXX,XXX days, to million the which the within revenue resulting second in by Yes. ending a revenue pricing Net movement XXX,XXX This from we with as million and decreased over new $X.X have net ending improved quarter just enhanced XXXX. from million primarily EBITDA XXXX, from the $X.X was significantly in $X.X the increased June the in three year a for HyreCar the to was XXXX. towards of new loan for Thanks, million primarily improvement rental was ending $X.X reduced expenses second quarter second sequential sequentially PPP well the $X.X costs program from XXX,XXX $X quarter. lower $X.X our in quarter I'm sequentially the The program, for our March XXXX March profitability ending XX, cash June of terms. in down insurance by and first our million months the but X% prior quarter, extended reducing first sales rebounded pleased runway. ending program both sequentially which days this increased $X.X quarter negative $X.X insurance and the in million from driven XXXX, the the quarter increase driven months in XX% million months to board. negative XXXX, quarter XX, XX% from XX, for insurance XXXX, increases the by XX, our improving we three by across grew to prior ending X% and quarter. XX, in June as million Apollo liability quarter XXXX, from XXXX, as the from million burn Cost three and Joe. to with XX,

of $X.X XX% year-ago months was three totaled and to processing Much in Accordingly, marketing our profit a margin to ending legal for payroll CRM was year-ago XX% XXXX, million XX% technology XXXX. and ending pool primarily March increased for lieu increase in noncash compensation. from from XX, XX, this with the prior align increased to solution better but cash cash in Operating and $X.X settle for flat to significant in of we continue and prior to freeze also operating June in prior out to technology ended a availability going-forward $X.X stock-based result, in Sequentially, savings XX, XXXX, onetime achieved rolled per business margin enhance million million, quarter as second and March $X.X nature quarter between increased, quarter nature June to we the $X.X As to for negative and profit or expenses quarter, first three loss base. basis, the the first share levels. ending hiring expenses sales our the June quarter for $X due increase loss option marketing but net to and first $X.XX XXXX, in of million expenses quarter share the solutions, this ended we of employee and the to due a June gross million up XX%. expenses the approximately approximately Gross $X.X our in quarter expenses March due a new a the XX, XX, significantly Adjusted was XX, the $X.XX expense million year our share profit the prior the million ending million XX% for as XXXX, the or merchant from insurance, negative gross per we million quarter expect period and On from was higher $X.X the XX, second period from same XXXX. XXXX. improved the sequentially $X.X million ending in period XXXX. increased although year of months administrative General reduced $X.X per for support up to $X.XX same net incentives. to or

year, negative or $X.X from per below was sequential adjusted negative million the $X.X on we $X.X our per expenses in of prior XXXX. the negative us a less payroll or anticipate from big $X March than ending banking million Although XX, the last forward, a XX, going was Cash $X.X loan with part million quarter share March And million this in PPP totaled forgiven. to significant $X.XX on this We XX, $X.X had June allow EBITDA was in of Chase, insurance through decrease and partner, $X.XX proceeds received the XXXX. loan share improvement $XXX,XXX it on loan prior burn program of JPMorgan to quarter spent we be million than of XXXX, allowed A Apollo XXXX. more cash million XXXX alone. payroll the will the ultimately will us intended, maintain XXXX. cash we This XX% new April build from improvement as

grow. discipline are a so have XXXX, payment will as We we accruals maintaining our we balloon reserves in early on and

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

Great. Thanks, Scott.

It's touch COVID Q&A. important the rental large rideshare disruptions. to we like So market it was to emerging, on was note before the thing over already as experiencing to turn that last I'd

As because space. accelerated also delivery the to new in demise models competition economic deliver ill-equipped continued space to Meanwhile, rideshare the business and these the now, to environment. the asset-light, pandemic results COVID platform-agnostic model adapt rental accelerated, companies' were of it the HyreCar's

a the number will demand with creating mode, rideshare As of reopening, perfect recovery increase economics remain while model. states into HyreCar's country delivery tailwind a for moves strong,

which delivery There that and With to core and future, is strategy business with both excited for from these delivery value with stakeholders. are for shareholder is change kitchens solving delivery the service all all-electric long-term in the highly now partners. it. of to established goods, HyreCar get our Q&A. logistics expand a purpose-built rideshare, approach from and reshaping move and cloud I both emerging I integrate are in driving acquisition delivery-only options mobility-as-a-service we that, COVID areas. in is and structural consumers' benefiting team to the vehicles, rental many rideshare Our in is is the business becoming see industries populated let's the last-mile permanent, to restaurants our tailwinds platform our for about When building Operator?

[Operator Instructions].

comes Our first Securities. from question Mike with Grondahl Northland

the in Congratulations revenue on Nice costs. trends and quarter.

other is I company, the you they what that, I rental amount question alluded, regional X with you it mentioned of share cars. you targeting first companies a kind can grow you just, think car Any of Southwest after X The cars and maybe start regions can can more think color there? was Or on with give maybe to?

Yes.

officially, first in, thanks haven't calling good off, hear well, your Mike. It's we hear So for to voice here.

rental that agency So But with we yet. agencies, car large think in yes, haven't few the small we're officially quarters. significantly announced scale next can in the very pilots this We here one running Southwest.

here. use a specifically, our rideshare the also gig, insurance in So have offering I'm call are we These the partnerships of of about we is that past that. case validation flexibility about and delivery, part excited we what said business model, what both core for that turnkey of solution platform and

excited as pilots share weeks more I'm to those official. become coming So in the

share you A will think the the the or to the savings there unit it economics of simple per of June insurance Got car Got kind anything started it. through contracts? XX? And on way understand can roll it. I because is that just economics

you've Apollo, Mike, your And think kind excess as is have with a historically. then strength of of voice. the new got to Yes. layer you the has the basic Lloyd's as Yes. insurance in lot we've it's program, liability lines I London, an coverage excess what and hear of mean of the as said, I Scott. it's Joe about talked yes, great subsidiary

lines fleets those are plans that power for supply of car are aggressively providing on so increasingly now. our kind And XX% our what north of really entity And in very they the particular, of excess protection that. in came

side. And us to granularity XX% basis a now So price blend geographic it you're more really of at a advantages on if drive as continue of together, gives kind have pure at, do car terms some in cost institutional looking more a supply drivers. nice age as states we as well you we those the advantage. of from things then least But

how levers us gives look interesting business forward. now really some drive it the to So going at we

any Got rideshare a much just Does you does your And that recovering lastly, it. state-by-state of opportunity? pre-COVID on that's XX%, XX%, gradually. how on you you if we bigger and delivery, the the it. like think thoughts know delivery, is sense TAM just opportunity up and that rideshare Got you then any take and layer had addition then TAM, know of

Yes.

it is at big point. this that I think pretty

or chunk And were XX% Now were -- large as out specifically specific and that were calls, really what really of in cases, back. stuck in their delivery was -- a with we in And their you well. in It kind offset has rideshare their we Eats time. seeing changing. on we results Lyft rideshare, and scaled our see that was down what geos. delivery more supplemented don't that and drivers really percent Uber in But have rideshare. in Uber the business Uber And of some this of XX-plus decline has see for our listening driving

specifically, As around remarks, hospital delivery that. benefiting ordering we in their in those structural medical -- talked groceries, consumers from nonemergency change about the platforms that scheduled United a is the receiving clear transport from attending the and we States are very nonmedical medicine, are visits. their are specifically how And there benefiting very prepared because

demand providing our for our on more it's more opportunities platform. for So vehicles and our drivers

past expanded -- is four, has the it significantly in So it five months.

with Mark Capital Street Markets. question comes Argento our Lake next And from

quarter. environment. to given strong the Scott, Joe, see, Great

guide. solid wanted guide little QX, looks bit. a drill down It your pretty to for Just like

-- about on the potential OpEx drill costs and leverage the on a to thinking we're some the of line. little here down wanted Just bit

to you could those you the do towards terms What gross margins, profitability? had initiatives some better -- have of -- mean understand in said trajectory guys XX% help some of So I cost -- think And the us of cost think OpEx? what kind just you XX%. the costs, I to know that taken, of the maybe

it's Mark, Yes. question. It's Scott. great a

what excited we about QX. really we're were think do I to able in

have I think top without staff, having was there. adding got little we $X.X expenses, we're light get see leverage some of the us. we right? the We continue we're at on $X revenue stretch But And have quarter. looking platform, on technology were million, think for kind right? certainly, and So goal to side, side on we've opportunities to travel improve model we grow honestly, bit was which of think to drive growth to we things actually there. million the Admittedly, on under operating looking add talked it add now keep add, side a to about getting continue we lot kind probably under more OpEx as the able aggressively with to what example, like OpEx So we'll business good things that don't line. on continually we out of the for the resources improve to right to QX of to a of a the a

as probably of side but to growth don't we we'll return things those So increases being some of see normality, sense OpEx hopefully the start a as little bit see that significant. cost in to

can. that $X.X million kind of to to certainly close we $X and under as we're going to million stay do our as a quarter, best So,

sold. talked just insurance We processing to in the I with quarter, partner, program going renegotiated is actually, our about think third cost processing Stripe. the our of we've merchant certainly, on that contract merchant goods help

on. to we continue at forward, of be the the savings seeing going kind to And across we're platform. So, refine to look moving continue everything to X July those board

to us yes, us then can and So that help get faster. that range, for stay to in profitability I'd look

rentals think And do XX,XXX is of still weekly to you bogey kind the still breakeven? average that

some Yes, almost this, of our days. put I days mean And quarterly you just XX,XXX do. level would XXX,XXX about rental to numbers current weekly look rental if kind of on XX,XXX at from

over current would just at be in our revenue, million $X net even revenue. net per So $XX day quarterly that

$X.X deliver just operating reached talking near-term and we margin expense As profit level target in kind were exactly would the that mentioned, quarterly you we about. million it actually of GP quarter. XX% gross this that's And

still get we yes, our So is that believe to will target, us weekly and XX,XXX profitability. days rental

think or one kind chatter do bit. do Great. is me. something a of of then for California Uber the market. happens? Lyft you last out guys a And like little you What probability there? touched exposure to I pulling the have there of put Uber, know that And plan? know And a any contingency on much the way on been there's I how you potentially ban

propositions in is appeal the direct move one, hardball think shut playing of place. prop there. couple into think California, ballot, think I goes California. be find out and think I that in Uber specifically Uber a going don't here right they're the a to it -- Number if put it continues I stay thoughts legislation put and and business there's meantime, And for it with some would have -- and operation. the they going And Lyft don't that forward. that's passes. they Well, state of voter down of it's do I They the type Lyft contingency Prop the don't XX, I that to as usual. on a in that which

that Prop state in something see to big They've that on XX level go $XXX-plus be yes, is start and put that to going and getting we November. proposition on million So behind we a into, passed.

as all of ABX deal carve establishes making drivers So Uber and what way, they out right employees. which a a our prop comp care out is way of -- call and the it's workers' for that is the fund what is which drivers, to It's third W-X not as it. drivers Lyft just health do draconian and does

seeing our decline. of expanded platform the rideshare a perspective, into was reason because was from the we've part So delivery

current or you think all of it's If at revenue. and I XX% our of California, about look so ridership

anyway. I said driving our And so earlier, we Like about delivery delivery. already would of into for drivers that are expand XX%

pure-play gets or revenue better times those that a kind I lot But transition of of drivers XX% to the impact. time you So delivery. XX% think would into rideshare revenue XX%

low So in on about probability, my that. it's it's we're our still but thinking mind, a radar, and

question Jack next with Group. Vander And comes our Aarde from Maxim

Great quarter. results this

So kind you is for historical recent revenue of new formal guidance This some this, a some which formal, analysts quarters, suggests upon but surprise guess this you XQ. maybe to my you you've and provided or maybe comfortable touched provided of is added compared the level you some to in have business. increasingly your confident feel Can just to maybe ability about forecast? factors kind just of an your allowed managing talk what you key forecast specifically of comfort grown in

question. great Jack,

In forecast, look managing think been time, if weekly rate days from at consistent there. the through terms growth pretty bottom, of starting rental I the you a there's

portion a out analytics lot for built That's the of business. data the a well. as key for have technology of half the focus second We data,

user about side that little the base as So And in demand that. terms and seems user expanded have the the it and base to of of to I'm the more equation. we've excited delivery, platform created a stability

making comfortable now. forecast very right am I So that

days, the highlight? color some in up picking thought? or terms in faster a as geographies Awesome. of as any Awesome. And trend? then, the you weekly maybe that seeing trend you it you positive provide to than can your noticing you're positive how Scott, Are could rental surprise there, that's Maybe relates regions increasing increasing you maybe additional regions any when or there U.S. over are numbers a crunching

the in more real of which of is talked call, strength that mean, last the South. we actually about I sort Yes. the on earnings same think it's I

back strong. Texas, New more comfortable getting like Atlanta, actually there. in to are states fleet situation some we've providers, come with Florida seen then recently, addition And with to certainly York think, the start I California So big

for are across kind the now. us, of the key news latest So there. board we're it's board kind the for trends good seeing those kind markets But of but those that of across

and Got plans maybe a your dealership of tone Can Maybe your platform? the from the existing specific helpful. bit just about anything in maybe their and discussions new of what And Joe. on you listing for lastly partners? additional more you're hearing it. changing then maybe That's vehicles talk

second I’d little nicely then interesting a is market. kind regional is dovetails question, provide that which of color and York New Jack, really a into

have there's cars that larger been I that rideshare crushed taxi traditional and think a equivalent and And that's markets. there operators just of lot thousands sitting. in fleet of rental the furloughed the of

started And from smaller those to renting so they the there them on plates were platform cars program. renting outside what see to and call rideshare TLC actually players or drivers the TLC that the diamonds they to drivers officially the our we've of removing delivery

one And result, a as there. so fastest-growing our York New I is mean, probably geos of

And to expect trend continue. so we that

So seeing we're above now dealers having question, what is world then right some the the address prices pricing. the pre-COVID now. dynamics to or in COVID right second that dealer are There's trouble. interesting car prices Used are

used XX% cars COVID. be sell now so operating trade-ins, And scrambling the because are of all find top for the to because factories registering getting not which means to to capacity right And cars that, of and able shut they're DMVs they're because of like the to plating customers. those of trouble being new on cars cars down, so having they're at

core, business focus, groups, are they like we'd right core core as And are now. adding to them a they right not core, now many and so dealer as the although cars

And so York of fleet, underutilized. City well they amount that's as of the can rental smaller as with it's our New operators, being regional we've and why there good fleet, that some tremendous narrative where of site example players a now, larger the car rental have you a see fleet the partnered on

platform rented. get HyreCar the to on throw and Let's

the current the of the is So continue to year. their say would seeing fleet that a us solution larger second car of access trend through I and fleets rental and theme utilization as for half going of that's a turnkey

at the And I'd I'm conference questions to not this your time. back showing to any speakers. like further turn

everyone. That's you, thank great. Well,

now, in speaking it will next the We wrap you, on everyone. will Thank quarter. forward to up the we and but appreciate you line, looking being

and call. conference gentlemen, Ladies this concludes today's for participation. your Thank you

now a great may You Everyone, have disconnect. day.