Serve Robotics (SERV) 7 Nov 242024 Q3 Earnings call transcript

Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2024 Financial Results and Conference Call. [Operator Instructions] And now I would like to turn the call over to Aduke Thelwell, Head Communications and Investor Relations.

Thank you, operator, and good afternoon, everyone. third conference Robotics Serve to quarter call. XXXX Welcome CEO Ali Kashani; me today our Co-Founder, Serve's are Read. With and and CFO, Brian

call, be statements found in both present our earnings If of we call earlier non-GAAP in to today's today. Certain filed GAAP can measures. reconciliation needed, are GAAP measures non-GAAP this release financial a During and may forward-looking statements.

these to not undue reliance we except risks any materially from Actual undertake statements on may do we obligation statements. place forward-looking forward-looking not make and should as update law. You forward-looking required any statements, differ today, by

made For cause issued in We with in recent it Form materially haven't website ask to differ Ali. more risks as and if factors those other information please financial press updated Investor press over our this documents most presentation filings quarterly you the about afternoon, release our the Relations that me described today to hand and that, actual we let results our review earlier refer uncertainties and statements, the forward-looking may XX-K corporate well to to we published to release as already. With from SEC. and you

our We've in to of short. last right. we've been up August, on busy. you catch All Aduke. that I Thanks, to try been it keep Since lot a like making call progress would today. I'll

towards progress our about scaling. talk let's First,

city under today. our reach million I the $XX Uber, L.A. once on are of utilization. in deployed deploy with by the to our agreement to track are reveal and revenue We XXXX us of robots annual X,XXX $XX next want run And towards beyond end pushing to million rate full expected robots

So stay tuned.

it to Aviation quarter's start-up, the our Magna that dive And through you Brian partnerships Inc. on including are update pass Vebu, with last new Wing into financing are then our to robotic Shake We'll about acquiring some you financials give Next, and moves. making, International. and work to the talk going with our also strategic I'll kitchen moves about walk Shack also of today's and announcement we a quick recent we

happy report track with plan. to to expected new to this planned early L.A. our And of end. on jump our third-gen while XXX around the delivery our hit end market By that QX, cruising are to we initially are we next robots. these That's QX let's double announced fleet. by recently and the of now them the of So XX in. I'm we as of we L.A. We of outside first will year, enter them robots to set our sidewalks year's rollout deploy year. on track by we going still have next are end

on Now side. manufacturing the

delivered first already to they performed third-gen with Our L.A. off a were lines ahead These well assembly are the testing. ones units certification rolling our schedule delivered and have in weeks facility. few robots of

we neighborhoods the new number to of platform. X into new there going start restaurants be Westwood. I are Our serve serving. XXX have expanding Downtown depots that still approach Sawtelle neighborhoods couple are our secured in we L.A. next batches areas, delivering effectively ensure phased With doubling visiting we and last and weeks, on exploring that including new coming scaling smoothly. in robot to year, we and these We'll QX the to deploying in we of week over more was that delivered, that robots is are L.A., next

weeks also and months, coming extend fleet service other the we grows plan over into our to neighboring areas. As the

Now for the big reveal.

example. run to occur $XX is aiming utilization, in XX of a Aviation expected It's they Dallas-Fort a we innovating hub $XX be Expanding Wing Our to ramp planned, each expected million city X robot line in the after of up robots the which delivery, permit take pilot let to with months. Worth dense XXXX, city on there Metro. full months. recovery are once of rate million By partnership is as with first would edge. cities track The as annual well. cost to deploy to revenue first all to could for and is going about within hit get year-end to our beyond to the XX outside L.A. commercial market for booming X,XXX us full Dallas be also sight an drone new we to

Now made. let's the recently dive into some strategic announcements we've of

Shack off we a Shake kicked Shake Shack. our in off, robots deliver partnership with to Back orders First August, L.A. in

this optimistic Uber's of national a serve came our as other expand also new robots. for as with This that show partners. We to value how enterprise Uber, can partnership model through particular Serve. is a This for of nice we cities be can relationship are valuable which actually reminder will the relationships

We together miles. are By automate delivery and to drones, covering way we robotic open partners one U.S. Dallas-Fort sight. we Aviation. delivered of beyond day. that and most opportunities long-distance portion for short combining robots millions ideal believe large that and hundreds merchant metros efficient up and from this partnership really their up is both drones kind. Successfully multi-modal is Wing deliveries done announced robots teaming a This are This Next, up Worth has showing packages cleared first deliveries has of deliveries be deliveries, food, thousands our and the of of for of is to of companies. will line our deliveries. let's about books for library October Wing of one every this an and to the worldwide with addressing talk works can operations Wing medications that model both coffee a for drone X

is I this We've well. As can national some believe only that's on working robots unlock. can I working like help chains to and robots to us tell conversations as for and my excited our team, what drones see potential this with thing it together. I'm cooler been partnership than time the accelerate

delivery think get But scale. the silos of all to is that automated weeks. to last in well to aligns waiting our now XXXX to that for. we years news finally puzzle one have few future been we getting Dallas-Fort plan pilot scale. forward been to are to This start-up for pieces coming by And and all work the bit tech working of Worth Dallas expect ready of the the about their share putting Wing in launch full we've bring together the every I their QX this in in with and expand

robots. work our with largest Magna talked a hadn't assembling update Magna quick and collaboration International. about software We moving into phase. with one is of manufacturers auto about services Magna the our a our is new Finally, also before, this but they're new world's

quarters, the Over a non-recurring them, revenue we've software up contract X from with services which mostly past recognized QX. in wrapped

hundred year. the Now should second revenue relationship generate a Magna to few work we've to testament revenue with create it's leadership thousand next in a is tech to and phase, which Magna last thing. relates And field. All right. The the One software products. non-recurring, while our licensing the entered new in our

acquire signed agreement have to We Vebu, Inc. an

developed them from by has that about recent You was prep might robot and time avocado know with Autocado, Chipotle. Vebu the in collaboration headlines

chains kitchen expand team onboard tech time the to food We are Vebu Big automation. start-ups. into limited have to bringing with work

competitive shop the to the is us robotics, labor for a are Serve partners. Vebu valuable for curbside tech, same which their and kitchen would both AI offering the problem, which is shortage, make needs. This and a them one-stop is and with same advantage. solutions So solving and similar

integration relationship national our deepen accelerate our we with will footprint, this So delivery And chains. expand them. with our it can as

Another before also stellar a name backers. of Vebu. us. Founder, He was founded this Vebu's one team Serve's benefit in Buck earliest Robotics Jordan, and automation big is food and Miso from Buck his joining is

And we Board. Uber, spun joined he soon out after our of

more names deal, Over And an putting customary in of and top the revenue direction. On closing team, but To us Due all a brings we potential flow often the exciting flow opened the a milestone in tech, a at all I'm Chipotle. be won't update pilot, is really to a a smaller after and acquisition that together goes forward. believe honored the subject experienced industry. pilot Vebu's balance sheet I expected it in there's chains team has conditions, of some can us we and feel not it the brilliant I you all-stock product, potential he deeper the can I ramp with remains and share Stage-Gate biggest because will with if about for that disclosing sum doors up to of Autocado growth move a Validation it's fresh cash is and well to also in partnership and out to wait terms stream. food revenue new of revenue. with an to size same strategic the stores the and to national you We stream. their potential is founders fund this team assemble many be this years, as it process, cannot up, could roll which Autocado acquisition cash it transaction. is bring excited here. the sufficient revenue cash

So recap. let's

on twice bit we a year's our originally are at planned. fleet deployment. looking had end, of By we are schedule X,XXX size ahead We robot the this a

L.A., a is Downtown L.A., with teaming hope we which there up. new with area Angeles will future We've and quickly the where robots drones are in to our We collaboration Westwood. and expanding pave service also way a in Then Shack partners. Los got national and for Wing partnership are expand Shake Sawtelle

expect strong allowing for be with bring together. This full underway. we Dallas-Fort delivery first There services into Vebu to potential which Worth going this the transaction expect able lastly, And fold with then bringing Wing restaurant to a Vebu by be speed path expansion us more revenue growth Magna, our are also up the we QX software offer about pilot XXXX. will thanks initially the big partners, once We the and is and a phase partnership closes. Together, cover scale solution for our at Wing running of weeks, excited area our the the new complete to is and small a in to us both with to profitability. potentially coming to and deepen to up the and and a to relationship range them expected also distances for end of time,

I take that use quarter robotics insights. earnings expand with core last Brian, humans. All plan robot right. then master and over forms for verticals, tech and the own shared third the with aligns you into this with it please new to call, first, other with me. our power on food financials co-exist of delivery our All finally, That's

delivered XXXX. We performance our we $XXX,XXX Ali. talk XXXX. in flexibility increase a our to taken Thanks, Delivery total we've quarter contributed revenues quarter. and the same look of increase QX, walk a delivery steps attributed insights revenue and through was $XXX,XXX increase I'll forward from and improvements with third of solid to the prior Today, enhancements transformative as financial fleet, directional financial year. The about our branding provide revenue XXX% over the period software during prior operational the the being increase XX% existing both benefited improved delivery of to for which utilization a and from quarter

impact, improvements their in expansion. fleet dollar marginal While for critical are prepare these as we

third an hours, increase we XX robots daily to average XX% These prior active quarter-over-quarter same and quarter-over-quarter supply period produced the to a daily the increase compared During quarter, same compared year. XX% increase XXX prior period and XXX% robots, had year. the increase of XX% a representing active

third we quarter, which last quarter. our services quarter As saw $XX,XXX a the contributed software reduction in during communicated revenue,

software Magna anticipate the first additional this, recognizing a half complete, services is of From our under providing recently dollars we look few revenues of While further forward XXXX. services hundred to agreement. signed in with we contract initial the thousand

Stock-based prior $X.X expenses for benefits had year. $X.X million $X.X the the prior third $X.X quarter, $XXX,XXX, and compared million and third software branding the margin third and the margin prior will Our the quarter to in year-over-year quarter revenue year. Operating same reflecting same gross same compensation was cash was to of primarily moment. I the million quarter million services repayments higher On income period $X.X following the delivery reduction margins to prior The due year In of reported and recent in ago $X.X raise during the we quarter in of capital That interest a the respectively. interest the the debt of compared in in to million period $X.X $XXX,XXX. improved to for quarter the prior quarter compared previous prior period XX% in compares decline and and million year. were million a third a transactions expense revenue. cost compared to basis, the our a the was quarter explain gross higher in $XXX,XXX in balance

compared million shrunk in third $X Our net quarter. the to million loss the prior to quarter for $X

our cash and financial to Turning flexibility. position

free calculated operations For $XX.X and cash the negative costs. cash as included quarter, flow, million million expenditures, capital $X.X third approximately manufacturing in flow was used related minus to

was cash position our overall by bolstered equity However, X transactions.

transactions NASDAQ exercisable transactions delivered warrant and of August were These proceeds for our XXXX company, consisting placement to quarter. the pre-funded the executed in transactions but warrants purchase July premiums price. were million April Our net warrants associated not favorable offerings, shares $XX.X and and of common for exercises to stock stock. at of generated common only private substantial listing liquidity These

of warrant proceeds exercises. addition, also $XXX,XXX In received additional we from

with us support providing positions $XX.X rollout XXXX. Earlier strong repaid of million, a with weighted anticipate term capital balance further fully a the September exercise today, of reducing loan, XX, us As in new company's capital were as which balance in our X,XXX secured balance of XXXX, flexibility a our to of sufficient We $X.X This the provides X robot cash ATM program, XX. raising. approximately outstanding with there we outstanding we on X.XX. average established price warrants September to million

not While with for new our we a indicate change view balance and the prudent that us our in marketplace. capital important needs if we do sheet provides optionality current immediate as projections forward opportunities this any or step capital, see need

$XX.X partners credit million. with Our under remains commitments available equipment total signed at financing

to opportunity significant alleviated upfront capital for due as requirements our drawn continue going As net financial facilities. The we for will to solutions presents result important under for which organization. Form the financing afternoon. The announced recently And earlier, discussed to this a steps our no these of amount effective Vebu, filing position the concern Ali explore our fleet, our has these the our of robots. we of have for acquisition of been compelling today, that XX-Q is doubt our of secure

we information the as not to initiated yet releasing completing transaction, preparations process. While are work ensure financial smooth a towards have we we integration

important this operations minor in cash brings Ali consideration, is be We structured which no our management of It's relatively a we to transaction the our acquisition our primarily focused deliver have Autocado capital transaction value quarterly to plans as for to costs. to balance and phase. Post on readiness to pilot production additional cash anticipate this duration driven upfront with balance modest noted, sheet, to closing, and capital we a disciplined this headcount long-term growth the an the approach As note to and no use, is expect seek through that and all-stock a Vebu operational shareholders. increase strengthening we sheet finance acquisition. sufficient a fund to by sustainable remain committed

Lastly, XXXX. I'd like towards some directional to as we provide insights look

to deployed full $XX utilization. Our financial robots outlook reach of run the annualized revenue once continues are $XX to million rate million and project a in

branding the the and and delivery area streams, metro expansions ongoing in year. geographical expansion Angeles, growth Dallas-Fort the revenue by the scheduled Worth throughout QX in Los into end cities anticipate of we Specifically, resulting additional from

robots As the of previously second in majority contract half we the indicated, be of towards the expect to Uber X,XXX our XXXX. And be year. half revenue of latter will weighted related to therefore, the the our deployed

customers strong our growth, seeking fleet our pipeline, branded advertising to expanding campaigns. for expand to revenue from exploring we meeting For demand are resources leverage

non-recurring should revenue considered near-term. be Software service in the

specific contracts updates appropriate. software provide will We as on

that, turn additional underscore of the consistent Our let's are commitment strategic our with software disciplined few is to with These hundred ongoing XXXX. previous expected thousand statements a dollars newly to in questions. it revenues to growth. With and first over agreement in half generate signed Magna services updates

move addressing now engagement. questions. via who and your like by I'd e-mail. start us all thanking to will questions the investors to into We analysts submitted appreciate We

So addition X,XXX take XXXX, robots total Latimore to Mike end or this have of By in levels? Brian, question first you to you at this one? the from in would is do XXXX first like Northland. robots X,XXX to expect

Yes, for sure.

the be To robots robot and XXXX. we all mean active robots that, So end entire X,XXX be are by that the year at it times. of fleet a clarify to have in clear, the will of yes, X,XXX aiming to service total doesn't

could larger that. maintenance on you managing we expect, As have fleet, to have a

use for the efforts. right in the will probably now the we're And high-single-digit thinking fleet We with R&D that some to respect robots. about percentages X,XXX

So I some color. that provides hope

take detail? of while Okay. He's manufacturing how This And the how do discuss generation Rommel was from more advantages next robot you you halved, the could might in question is functionality to cost want generation revenue Aegis. Dionisio at this much was asking, Specifically, increased? Ali, third one? improve?

Absolutely.

robots have basically Also, what twice They Xx about is day have as deliver compute basically increase. much third-gen sensors our the what current more generate the achieved that better drives -- about same than robots. revenue that So and in the cost improvements per They power, they that have battery. can I'm they the items what XX% That's robot decreasing the about speed. that these more revenue more which while means is more what have robots, efficiently. all at proud time, the particularly in of we half. can fact the But is

off components shelf certain This used made made now the removes we've overhead. to being in-house. are So be that

now from lower that view design cost, have parts of a point and are so We for optimized costs. better robots manufacturing

also lastly, are that a forces previous We that mentioned forward all also Moore's expect are and bring have down from earlier. improve costs. I the because to and and and continue And moving remove also also trends larger we reduce performance further, so going of building us off designs at are that these those builds, and the we batteries cost I just because terms components have both scale will than LiDAR scale that improved Law like robots in cost helps all components shelf which further our of GPUs.

Okay. All right.

to to stores delivery? for into from do question. you year Brian stores And why? So opting of number and year-over-year? from Another in and multi-part Alliance are up that's many the How robot a how this Kinstlinger Ali, at uServe's What robots want one? does regions a signed question quarter-over-quarter a is your compare uServe goal reasonable Global. this take now current

Absolutely.

XXX than are range. shared last So currently, I we we had restaurants have the was that Angeles. believe XXX number serving Los in in quarter, the more we

the we total just So that's double. to our Los grown. expand expect in Angeles, number almost as already in And we weeks, couple next of

So we XXX a sense serving Angeles. kind the have what of about going look for expansion we to going we We rate of you would like. gives in restaurants is where Los be projections next that but will don't that just year, are have be to

recent Okay. one and via is it's a from to you All impacts or got in the such few election. of any quite about impact on any from as tariffs? Serve next question the we The election right. e-mail, local possible regulation anticipate shifts Do we that Brian?

Yes.

one. that tackle me Let

neighborhood and well operate the robots to from the see being sidewalks. on dialed has how that So obviously, policy policy, percentages years. regulatory over Regulation are don't play is But tariffs going ball allow team our the in a of election metro both a we recent a and legislation that's lot have proactively for from and as respect tariffs. our X the next a standpoint and we're color the as to favorably, passed to to with we the to out track crystal perspective. And going a

looking for there continue trends that we'll we're to monitor. So

coming is On materials provide are most supply of countries our the other China. chain but that would tariff side, our than I from global,

terms more to magnitude information respect as provide market. with to the there, we'll more So come concrete the

Okay.

the your and would Beyond Glenn to plans is you necessary robot? Ali, and also Mattson acceptance share of restaurants deployment Next scale to talk Can everything per getting this there's service. take at Can want from Ladenburg. robot, maximize on by procurement you one? customers into to them up? about question details you and revenue

Absolutely.

to Los is effective as kind expanding expansion in delivery the expanding one something we we the in. playbook we selecting set and doing Los were Angeles going So skill because insights. Once a historical starts neighborhoods Angeles. choose been the we around inside cities to have markets are platforms of the on of depots we born we by that pilots based outside unique with an and to, have have This and data. It data are we robots even largest and place we delivery familiar are secure the of really

that systems. find they And customers of field they're we robots. L.A. a X in about the the For And in as can won't low the wish expansion to cases, to have opt and In they a also customers work required recent of have can work. And need you place, team course, many integration outreach then place Uber not if point-of-sale and then find part robot, different something getting the and is charging be And so order is to managing that, secured. we but just example, restaurant who a that's QSRs new are we put be our that an is In informs that and a merchants partners really choose, case, Serve. are and kind obviously a informed customers restaurant then which once then by depots Again, onboard of though tip we very maintaining certain with they charge of out in operation they usually they also compelling. that we onboard. do like e-mail percentage. to like do that to same. them some our program, that a opt are ordering custom In out supported the if They get out they the may from simple provide cases, find program. place

we merchants pieces, you the So customers step generally use both and are these People opt-out low all robots the And ship then course, is have excited to areas. really of in rates. final operating once those robot. both find cases, the to

then resolve Ali, supply, of QX How up demand He also comments? you have take X,XXX says, could more said from is we these at and it's Richard the X question next full to you call, expect said should but the to it on year than The on utilization. see a utilization Shannon you Okay. we Craig-Hallum, robots.

Well, operations. takes of and setting area. and start few it you But need by -- a you that sometimes weeks a to in that a it. once securing us there are robots few efficient up do become addressing you go in between number steps demand Obviously, and months really that,

We have with get example, to, the for familiar map geography, the space.

Even are we collecting operating, more information, as we than new we new faster across are as for places. And information come others. are example, identify that routes

You But someone QSR, when a with thing and this you in integration X. more onboard. a don't additional that once a to can neighborhood of about that's go merchants, anymore. merchants of do see really them to operate do the the a have at also e-mail, that peak of require you is performance you process an onboarded future, more new some have nice with we And steps. of course, from day don't this and custom them be getting you Again, lot same

and even course, becomes over more get and at going efficient. And better process. it then this So are, better of faster to time, we

playbook, this think to can a in I subsequent faster. efficiency even folks lot doing delivery get of examples that for it can every and market and get you see of ride-sharing food peak better at are there kind where growth launch, including

learning of kind same the have to over expect get better and time. curve We

Okay.

million might $XX to in upper I to Does needs include fees? Another And happen -- Northland. to happens He between what this be what that X,XXX million says, generate you say revenue. for of of robots question from get think one branding end range? Brian, that Latimore you. $XX range the to Mike the could

Yes.

rates and on first question, will But take start run going million all revenue we're the ramp Let the $XX steps branding we as to yes, would about delivery and previous me respect the majority We kind elaborate that is delivery and to contribute that we're hit of expansion. in up about. with expect hit to services talking number. question continues it that to Alex's that the million the to $XX of

utilization increasing on down on comes to campaigns. then and those conversions our it ad think I robots branding our

figuring As the focused of we out on mentioned script, how metros the have each available capitalize branding can we advertising will these expand we and and into in and we to cities us. resources best revenue that's as

that's the we that's we'll think we've focusing So And our in And is not just software. definitely on. else piece non-recurring should be move There forward. talked those with clear, been a consistent address be attention basis software the to be something we that and then like here, about more I forward. that Magna, exceptions will be as we'll considered on one-off moving

The from sidewalk Would other are What answer you consolidation? Ali, perfect. next a from is robot expect Okay, Aaron Kessler competitive from seeing this you you one. standpoint at companies? question industry Seaport. maybe can

Certainly.

a general, we've specifically the lot seen a short or bets different in of different approaches think I are to long There delivery distance. few whether robots. over years taken with sidewalk

effort. of It sexy. addresses lot point, pain I a is major attracts very think robotics a

Over have some of the we are bets starting made see contrarian But to we've largely we market design validate now that here. I decisions the since and go-to-market days. lot taken the seen years, think early a

small initially lot with X-wheel And life, now capabilities, A we drivetrain we've operated. seen much of lanes. on let's remotely very more LiDAR, saw battery minimal short usually example, no like also are For focused using robots architecture, on, campuses. these say, folks robots bike

changing and even anymore. messaging the you're far they're see Now of autonomy with our emphasizing which to they realizing that because battery, I'm increasing bike I even X replacing of or amount have trying is than AI Also, to efficient along. way if lanes battery all similar battery seeing to not cover robots, that life folks wheels around anyone this X it's life pattern more day have wheels don't right focused on

starting of we these of lot are we've So where the the a pattern decisions bets being of early think proven lot right. and folks converging. in I pride I a take to obviously are see we a made taken decisions

the folks the more are face think when have forgiving market leading biggest the pack. different a some of folks a more like campuses at environment, we are enclosed and you may environment. And that may started with on spot then I That robots, in look for these urban focused really limitations. why lot environments there be

So this of do overall, convergence. I expect kind

deploy obviously as needed support. seems had well the for last the not forward that We've if to technology way will in product at acquisition AV sense thing the, like any made our are largest anything We teams be least more open largest, next mention there, just North America. not consolidation keep or our or is of of that year based we the robots, But expect from some one I largest eyes the the -- inbound if is date, the opportunities. out us. And that things fleets information we an by then interest when of for would end the moving haven't on that one seen X,XXX to we

like are in we position. a So feel very good we

Okay, great.

some what how that be? of the Serve's speaking last will Vebu Chipotle acquisition of is stage? about expect the question be moving Ali? gotten next relationship potential play what with the the and hour, you pilot So And a steps it's Autocado product the transaction. explain last acquisitions, Can Vebu will And composite out? e-mails we've you for in to the past

Absolutely.

out moment, our as at be their they our now. at there. What we to can the more is key and done Chipotle, of to solution be them looking have we good we collaborate holistic want pain that expanded thousands to we them, we feel delivery this we is our where have the of address And robots kind deeper -- a with similar our be insight and offer that with of acquisition going about is this and infinite kind out that excited technology folks to in and every be Autocado, the they're I and business completed. actually to have piloted technology need us. with hope Chipotle. Autocado side with products to relationship time when single restaurants, ton have that's that curbside about that But we've you one-stop are scale don't there, understand And are to a a at points so not-too-distant happening we really all explore being kitchens, diligence. automation them And we've by Vebu single and think and here. don't with kitchen right are. partnership objective and able the now footprint expanded type of their We to able joining can shop going So is they're share next the really that start-up that's year. a looking every also think like currently would is of future to a because The our a opportunity their team are I bandwidth more holistically, obviously, meet of they And can we launch

Okay, the we perfect. Those are all questions for today. have

continuing dialogue. So we for to over Operator, everyone to and thank look forward joining the you us, you.

Ladies thank joining. That and concludes today's for gentlemen, call. you all

disconnect. may You now