HC Liquidating (HYREQ) 11 Nov 202020 Q3 Earnings call transcript

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

Third Quarter 2020 Earnings Conference Call.

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

conference open the your presentation the will for be questions. Following was recorded This release XX, call close conference Instructions] today. today, the accompanying at market of is conference press [Operator earnings being November the the XXXX, this issued and HyreCar's today Scott Joe Furnari; On Brogi. is and our CEO, call CFO, I to Furnari. turn over like would call now the Joe

you, and welcome conference everyone, to XXXX Thank call. our third quarter

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

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

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

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

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

quarterly to our turn to Now results.

The And the a our of serve the The our is face the performance a third post-COVID by HyreCar environment. bold quarter in business of a face as efforts in continuation business in team our of model validated world. adversity. an business results model statement unprecedented of the

the growth days in company over the we different of with through rental world. the quarter, days HyreCar the over our expand to the COVID The XXX,XXX rental by to effort proved late identifying platforms, to grew service March in We our rest team delivery right and see in expects conscious and growth services remain the by of be XX% approaches even for delivery to XX% steadfast Our sequentially, to results expanding XXXX, in and speak sequentially themselves. opportunities persevere saw new move delivery emphasis platform city and an and state increase and by reopening, XX% will year-over-year. Revenue over and on continue fully rapidly year-over-year. the over to that XX%

on have increase drivers in slowdown. strong routine. foresee and on their adopted into platforms attention TAMs continued helping One heavily are strength delivery day sequentially XX% comes rideshare of third a growth customer demand. driver delivery of services revenue was environment. Increasing driver quarter. We recover consumers delivery unique as rates, from platform, and income our both exploded. the supplementing growth. primarily have new are been up XX% changing main driver year-over-year COVID-XX seeking picked as a services as behavior for our daily The quarter demand driver in sources during robust delivery to an their continued the And the vehicles rental has customers in key growth the Mom-and-pop result third X,XXX car demand In

Uber example, rate means XXX% and year-on-year. past grew business up that and Strong an Grubb platform larger run to quarter billion sustainable Hub's economics third in driver accelerate. delivery growth strong, this a pools. now XX% continue driver will is demand For quarter to year-on-year remain $XX and the larger environment Eats revenue was creating

we're Additionally, restaurants U.S. only Eats of innings the XX% in Uber early this of penetrated the has growth. in

move the expansion allowed us rides fare and their Car delivery are XX% rideshare a our cars new service In it the partners QX this world, better of strong, platform in COVID decline supply ride on TNC for combination of and our than the today. even to So validate higher of month as business to into the Hertz of to delivery sharing gating in package what growth hire and as making is main that the the cars our states normal helps seeing is food bigger economics to continue factor platform. we delivery matter had reopen bouncing COVID, the anticipated. remaining we back ninth is promise than results businesses.

while that So time increase have unclear, can I to the we this later, will we discuss significantly grow availability of on the is platform. strong for for outlook our as the our cars used COVID demand partners so

operations from free cars expanding are are of customers, New their the some existing on sourced listed significantly. platform being whom

will into With dealerships. of supply and lot of rentals. are supported driving creating seen which their gig has franchise is car use start to toward fleets effect will sales used manufacturing a more for to This prices shortly. for up cases new cars Once ramping the have and coming prices and first-half vehicles car dealers online, Expectations alternative fewer rebound business. are that have car dealer car start in listed XXXX. normalize vehicle used high prices, start used hit However, independent the core should used there

Car their Rental from partnership, rental the Brett Car how The in driver uncertain Holdings, amid our of policy great constrained, seen Family the was more announced agency participated Hankey the integrate with vehicles. Show, case to are International larger car with business highlighted fleet agencies to the we're of of partnership with who the run cars today. from companies. have companies environment the cycles. rental we While seeing operating Brett we $X.X ability in that billion. dealer moved demand. example is including a discussion benefits longer cautiously study Rental, respective panel existing more to Midway's from has an can car growth agencies benefit robust interest is to want Lippel, operations partnership at featured by This late a rental need utilize they the procedures HyreCar over held stock And within specialty August, Group and profitable In We President. with a rental and and and assets pilot combined in recently our Midway

rentals Our of the that partnerships daily team X,XXX XXXX. onboarding the active X,XXX can current rentals quarter been an on we and active expand believe platform, fourth from has of now count, daily rate the additional new number our to of cars between

include XX,XXX rideshare quarter fair drive partnerships, as couple exit New of long during way believe America, the some groups so COVID, on approximated with the the XXXX. relationships of almost in that vehicles. with the of the out delivery, these profitability initiatives profitable in grow near-term, automotive first largest toward directionally notable us A of makes active we quarters in Hertz into the rentals and today. came inventory can and we XXXX fourth new the we couple and we're both to and daily and working partnerships to of with will X,XXX replacing that Getting go growth a

their clutch HyreCar plans First an believes of restarting onboard lead the its is mobility mobility their to subsidiary, team technology retailers. which dealers will pause to to more their supply partnership with vehicle Cox with Automotive integral platforms. COVID Cox partnerships can be part and HyreCar Automotive

we of revenue to they to vehicle. a shortly complimentary put earn announcing Second, to position wish streams, current us buy partnership HyreCar indicate a visitors that leveraging vehicle. leads HyreCar's national platform. buy plan in customer will platform XX% This will to a be monetize partnership

Third, vehicle our we're about electric excited new initiatives.

neutral by XXXX. to to made have share objective Uber's it our be We goal carbon

with put since now, into Bill And help that drivers. topic another was fund in finalizing on industry, effect that go key others Jan to fleets companies independent expected to are partnerships of them employees to certainly contractors EV as Assembly to and In reclassify We our XX hire exceptions. X, larger event will few response, DoorDash, the political X, major significance a that last of XXXX, markets. Prop independence required these macro Lyft, Uber, flexibility preserve partners our and

benefits populous passed California said, flexibility. what important this We has want, and in the what voters echo majority that now in the the settled healthy to XX state Uber vast been Prop are the of drivers To new productions in California margin. with a pleased question country. same listened most with

expected getting people in productions Lyft that safety minimum make standard, to that from value to preserving to favor right through drivers gig Brogi, be guaranteed Chief altogether of Uber better, are flexibility increased and drivers feel now Prop they approach. right deserve. over We forward, in Officer walk all our rid that, work insurance, the Scott? gig adding balance is the so that call strongly Going believe the much, to more. to I'd adding of and to like expect delivery and contributions, benefits said an key the between a be quarter. earning turn this accident while California healthcare workers details it financial to employment it only that the With protections XX some We struck system. Scott not Financial

$X.X to you slightly higher June in Thanks, months HyreCar per saying $X.X rental grew XXX,XXX million XX% core seasonal ending for to days revenue three Joe. XXXX. as XXXX, primarily third in XXX,XXX time the done reduced approximately to veterans to unit increase days annually pricing. on freedom. rental well $XXX,XXX grew military and million quarter protect increased this third days, quarter, at I'd the three by XX, up we XX, quarterly days as thank all The controlled months and to improved than increases in Net over driven approximately And third start Adjusted and million to the all the by XXXX, three the the burn, Rental third some for of from from to negative quarter. in XXXX. in XXXX, our the $X.X prior cash costs quarter, sequentially to September once like was $XXX,XXX move XXXX, from by $X.XX XXX,XXX from year, levels ending XX% of rental quarter. in closer months EBITDA less million, the due for profitability members ending revenue have XX% sequentially XX, again Costs $X.X million you to June XX% XX, ending higher in to of our for shifts share from quarter quarter September and or Veterans $X September XXXX sales of was we the as million XX, revenue all continued our negative increased and $X.X Day, expenses. this $X.X to XXXX, car million supply. ending primarily second for to the from quarter support of insurance the to ending September prior XX,

the million June XX% XX% the slightly the ending for quarter gross XX, a prior As profit the second was profit $X.X ending period, million from up increasing ago from September third XX, ago June September third the XX% Gross quarter in XXXX, ending XXXX. significantly in million, quarter, down ending for result, in the margin And from was $X.X XXXX. $X.X quarter, XXXX. XX, for and XX, doubling year quarter year from

for adding as efficiencies controlled. target our for gross realize Operating scale. profit months the stock-based insurance as to range the XX%, ending we totaled after approximately in in quarterly three moving non-cash towards we $X.X same the $X to back period lower September to the operating expenses expenses XXXX, decreased improve to as products our forward. increase expect expenses from be to $XXX,XXX well million of margin of processes start prior million, OpEx and year, million end $X.X $X.X to compensation, continued million toward quarter, Cash of the We XX, continue million third $X.X

from in to or share period loss share million, ending decreased per $X.X per same $X.XX June ending and $X.XX as $X.X share improvement from XX, year, year, negative million, per or per the net was or September XX, September a ending per Adjusted well or the negative prior share in net million, negative quarter, dramatic last June $X.X per negative or million $X.X XXXX, XXXX, from of a share Our less for for three $XXX,XXX the June $X.X decrease $X.XX totaled $X.X negative the had from $X.X prior ending the million, months million a decreased negative as share, $X.XX sequentially XXXX, ending September million quarter the of XX, EBITDA quarter prior September XXXX. XX, Cash from loss the XXXX. prior than XXXX, on XX, we on XXXX. of $X.XX XX, $X.X also $X.XX million XX, or

cash simply cash is the Over prior $X insurance operating PPP based new quarters, the and second our two the program in Much automotive done unlike approximately XXXX. is enjoyed by the only without of Apollo past the we was flow, program quarter, of support this improving with million, of on this decreased a result quarter.

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

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

Thanks, Scott.

platform, created secure platform. a that opportunity. The capitalize moving We've to we're car QX delivery our shown are TAMs for enough and COVID dawn shows, and speed delivery nimble on warp message, hopefully news can is rearview only this factor represents environment, has where is COVID-XX now delivery predominantly the drivers. that, mirror. move in put as growth business big demand and and our Q&A. HyreCar in merging our created gating that in recent rideshare. the as Operator? partners let's summarize that to validation HyreCar's rideshare, optimistic But, of now confidence a starts driver that model our now collectively With tailwinds at The platforms our on as business and scale. our for of are is as an can expanded was return, to vaccine opportunity performance driving on So of at TAMs supply, the expansion an just this fleet remain day, too with new combination rideshare We a we so the will that business has future. any to to

comes Securities. first question [Operator Mike from Northland Grondahl with Instructions] Our

Your line is now open.

afternoon. Hey, my if Scott, little clarify good Joe, bit could and a just is question first Hey, Joe. you

adding cars, where of two to from? talked coming you those X,XXX times which Could And I on think about talk have how kind platform. about you up? is those you the expect are you ramp what

world, Hey, Mike, would I year, yes. this pre-COVID think been we right. In a have there

initiatives year, on at dealerships we're and life then a we all our I the hibernation, that a as were got think we into beginning seeing of the support tremendous hit, those went in ramp there. were little for and dealer COVID and of while

in looking large markets, have disappeared at for add from And kind and players so ninth as we're of distribution inventory fleet looking of a moving along have and COVID, month, scale operators who of idle at been some fleet they're has looking by we're this have lot fleet and the that affected you sitting, leaving they're are scale, Hertz. channel that these to who

that fill to And stepping in so hopefully we're footprint.

platform, what so XXXX looks you're to the amount or those cars so excited that And I'm bring about like. talking can two one of operators about

cars I revenue those Is next you you that then the guess six take follow-up. I a bit, then think X,XXX if normalized million? or do And cars And $XX ramp? next think to the little give X,XXX year, How million over it's over $XX annual about kind could months? of, on a

partners. giving we Right. But And We're not talks in be with I to want there, just these guidance right. clear.

supplier to increase mean, planning real many month, have year, year. to next in supply late are of of on possibility very to they a QX expecting incrementally. that QX over the that is it it cars. feather internally coming really So that And ramps this we start we start so month in I

on, of five through lot see but a probably in it next realistically of the feathers that I coming we're quarters. So anticipating kind

Got you.

else that anybody is XX,XXX of And Fair? kind from Okay. car filling void, left or Hertz

sure Avis has where market, right know, really are of the in now, cars. come to in You I'm terms they not

starting but kind is are I right and of we're with up, some now what now on market flattening reopening. they now pick I it's rethinking seeing ridesharing of ridesharing. think that super was the out think focused the city in And states to

But - think Getaround. that's Avis that's then HyreCar. much I pretty it is and and so there, it's And but

you So what and - right to start now, ready forward. when we We're we're move at scale. there the is ready now greenfields at to look adding fleet have with to opportunity competition, and our

for So to be partners do help able we're to us looking that.

Got you it, then do just maybe as lastly, X,XXX you for layer add cars, need to those much expenses? in

want to we're where my that then of done regional that of at to a going neutral. our be now a those then, lot and sitting we've we've internal they looking is on our supply be - bring From my but all vehicles. traditionally We're What regional New Maybe maybe opportunities a hire owned I and shifting managers presence high to And in think, we're from regions, past, Angeles, geographies. one. minimal. staff a managing perspective, doing those put Dallas, what presence. we'll could shifting kind in to in move Scott to and presence, and guys of Orlando, to kind core vehicles, give the Los now right of managing give from don't in Atlanta, first, should level to That's account should of if York, a our look I then shift our had regional in

Mike, Scott, question. good And this catch and Yes, to is up good really again. it's

we to quarter. lower we this are $X.X I think, that managing million stay we've the $X range at as of were to OpEx million. kind quarterly And within about, really talked bands of end

little cash about a over expenses, $X.X talking million. operating So

growth that so but we we the it we increase some I the we're OpEx. to can those limited for Thanks see add really a question. look huge a so, don't And to to from markets, will the as get looking geographies, of that think key in extent

guess Sure. speaks And you strong. Well, to cars think operating breakeven. verify, said just pretty just leverage I that I X,XXX is to is

it pretty quick? get you So when interesting, above gets that,

kind we about we came back mean, talked official COVID from rentals, always I of when equation. Yes, XX,XXX weekly

would because So the a you quarterly expenses X this operating XX% $X.X give to get if have that still the see as you million operating a in we there's in GAAP weekly math, the to breakeven - we still And I cash going that do that you and holds about at XXX,XXX million XX,XXX and that expenses is margin level rentals think quarter. rentals, about revenue quarter.

Thank you, guys. Got it.

Mike. Sure, Thanks,

with John comes Our next Lake Street question Markets. Godin Capital from

is line Your now open.

for Hey, and nice guys, congrats the quarter. thanks taking questions on my

First, are when you're talking of with discussions big past having been volumes kind of get new with evolved as of have as the over need quarter? those to cars the fleet perspective, have what guys as the they of you see, on, the And from some adding their operators, the milestones far over kind them, to just how higher hump, key up platform? to

in Well, were profitable, T&Cs. fleets, pre-COVID, the right, running directly larger it's know they the they cars into

they're volume scale. for just and drive, So, can assurances we looking that

So that's one.

tools account we're then service them managers their to for operators, that. service. and of white a And current larger they're scale as And inventory. the giving can glove fleet them new type the that profitability products the of provide fleet showing for HyreCar With at can we to and roll specifically, started business, to looking milestones, by providing also we've kind by dedicated we do out that

relatively know you've going you as level have then steady? what did mentioned data integrating platform. in goes, Has look some it that I and Any forward? and as Got potentially far data on like your it, more there? any granular that noticed been guys driver update pricing pricing changes

rates, Well, increased normalized. daily at as they've look I slightly our of kind

site bumping XX% and prices, a May but saw did utilization we're as and site. on to April XX% we on the so the up utilization Here up against dip dipped, now in

in So pretty slightly prices normalized to and pre-COVID have slightly QX, levels. COVID close ticked up but levels,

in risk that weighted, account we're insurance there's population on John, have adjustment is, that a thing should our then pricing data, fee we this schedule some and that Yes. driver. doing be more discreet to we maybe see add that to age the through state-by-state for to And also only if actually riskier I'd basis, now is a and poring Scott,

of see. we I and some, car see So, to heading you refine model right make getting may supply really into tweaks XXXX, think some wants our kind the sure commercial drivers that we're it, that continue our as to to

Thank guys. it. you, Got

Thanks.

john. Thanks,

Our Group. next Vander Maxim from comes with Aarde question Jack

Your open. line is now

Joe. Scott, Hey, quarter. Hey, solid Great.

on for Just a Midway. get of question with the hoping color Joe for I'll questions me. with couple start to a some partnership additional

You but helpful guys did commentary, provide ups just few follow more a to that. some

on to share sure moving I'm platform in your be active to might X,XXX Any what by can locations the there? increase So or that quarters, target target. as Midways eight five comments relates a the it But maybe you the or rentals upcoming, which target. is embedded X,XXX, within maybe four comments on percentage any

focus with need who it's built, shifting we all there that's early that peer-to-peer, the built car needs supply. that where vehicle days, We've of step integrate specific their accommodate a taken to was still like win specific originally companies to dealer for our cautiously numbers. renting HyreCar for because be it to to business. moving Yes, rental an There's platform aren't additional platform said, HyreCar procedures, used to really been policies, we was procedures, originally

in some technology implemented. to that needs be there's And so there

us some in he's So, this on Midway because over talk deal. I'm you time us. buying there. to mean, give really Brett at and But And purpose they're I excited for all when

can't excited the specific you give on now. looks right I that So what percentages like. But I'm

maybe is quarter actively into what Midway listed can you're were during of percentage small and qX, of how partnership try. contribute Sure, into announced if quarter if And can't August? that, your looking so, on then figured you actively fair. I'll that? overall third this that color if provide one number of third XXXX. opportunity Midway to As it the was and provide That's partnership helpful. you any So did for but that's the Did here, more just question that what that in revenue represents? this and cars I'm - maybe I

third like trends, the if to and quarter. in wondering, they revenue Just contributed directional

contribution. slight I wouldn't to you. for in slight, Yes, comparison of other out but fleets. some - I that have - outsized our it I other our broken of say by in I percentage, can't larger terms could some don't of

then margin, gross helpful. take third quarter that's like a you profit the take gross margin - obviously, quick question to financials-related take what appreciate you is you for I to dollars Okay, can Looks the bank, though. a bank, to that. Scott, And a margin the can't question. the can't

see profit to So dollars margin level XX% XX% it's good get to gross really to ramping up, did below of but XX.X% kind the target. the that

I You to with is think it lumpy, changes maybe always mentioned fall below specifically anything element mystery fluctuation will caused but what the seasonal just the some, with again, some just be that you it there and some cause there can XX% provide there? insurance of costs would or always that wondering,

like way ended a recently talked increased, Yeah, and I've was down, FinTech or It completely interesting. became stop. everybody I is read less there mean, I up think as thought reports serious. I few more actually accidents kind speed travel think traffic would we when accidents that that a couple about was was what that happening actually, saw And insurance things, of right.

we going think more get I that forward. are So to working normalized

liability - group. more process real in to new we It's think we as a both the for efficient. make up the that our future, look coming in have future here and the I the near-term announcements technology some focus be auto physical exciting damage will

basis. on We then have work of with some good excited quarter. to some expanding think there seasonality in I'm for So HyreCar haven't on. platform forward opportunities that did to area. about it, new to the continue but side it improve And going And then our really on start a we'll we that things I really subscription business are in talked this

talking to that that expect track get we've on been back to about. XX% we So,

of that's follow then, Got kind it, program That's the the XXXX? just of it to you just in up, to encouraging on comments that given how the that it increases related And with whatever cash the risk hand pay and Maybe there. in as early might impact balloon satisfy on payment upcoming maybe payment a then comments be maybe XXXX? And not? have okay, insurance counterintuitive? have a of bit, now early helpful. it driving is does Apollo amount accidents and your kind with of just on your you'll the or to increases that what And does reserves also, comments that level payment, balloon if

payments the Yeah, base direct just a of result actually period. in the rental the

that isn't type of say claims by impacted component. that having So you're in really the that

as said, a capital sufficient care keep So, we've have and that that basis, on we accruing forward. quarterly for take of on we been and to moving

quarter So we was that feel to only neutral, are think come things months, almost pretty a and good is actually. in to right testament now. I six quarter And the about where down that cash bit the last

is. feel that good we where So about

on business continued generation flow cash in and it it's quarter. that see upcoming rapid Okay, growth Well, to you're positive the track, momentum reach seems nice great. sufficient to the

So, it congrats, That's for guys. me.

so Thanks much, Jack.

Jeff. Thanks,

with comes Ladenberg. Our Jon question from Hickman next

now is line open. Your

during answered. number left. been QX? Hey, I July. in Seems Is most of just my questions have been rental since and of it's there the flat any like seasonality had asked two

wondering was a if I that just was So factor.

actually last Yes, good you've What we the and seen you August do this couple some John. and in question, in third softness see have of that quarter years, September.

QX is probably that the what those always you're that's one expectation quarters for been numbers. so strongest demand. seeing And has in of And

so, And quarter. in what fourth see you'll that's the hopefully,

the look going it then instead and much will mean QX quarters. indication, could stock-based compensation, forward, I past some of pretty us like give you Okay,

in at Yes, I think, kind to back normalized getting this time. we're a level point of more of

kind see is think basis. right to is a now state we I this see. and more what steady on So, That's back what forward a of to yes, going of we'll expect largely

one guy's the and first, the question more, so cars. back Okay, just about X,XXX to first

is feel it's of, kind the good enough you air if, a these about not in this when feel discussions mean that I question really You thing? not a of up

Yes.

talk do to We they've gearing talked to insurance commitments carriers, up this. have they're to,

about opportunity. Everybody excited. excited should I'm So this, this be

Okay, thank you.

Thanks, John.

to like the Joe I'd Furnari That concludes call answer session. today's turn closing for remarks. question back to and

you, Thank showing here. to future That's forward looking near the all you, in Thank results I had everyone.

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

You disconnect. may now