Q3 2019 Earnings Call
Ladies and gentlemen, please continue to hold your conference call will begin woman Charlie.
Ladies and gentlemen, thank you for standing by and welcome to the higher cars earnings Conference call.
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I'll now like to hand, the conference over to Speaker today, Joe Denardi CEO . Thank you. Please go ahead Sir.
Thank you operator at this time I'd like to welcome all to our third quarter 2019 financial results Conference call.
On this call is copper did you hire cars Chief Financial Officer, we're excited to update you on our progress over the past quarter end and provide you with some insight into our vision for the future of transportation as a service and how we plan to monetize that vision today and in the future.
Before we get started I'd like to take this opportunity to remind you that during this call will be making forward looking statements within the meaning of federal securities laws regarding her current Inc.
Forward looking statements include but are not limited to statements that express the company's intentions beliefs expectations strategies predictions or any other statements relating to its future earnings activities events or conditions.
Statements are based on current expectations estimates and projections about the company's business based in part on assumptions made by management.
These statements are subject to known and unknown risks and uncertainties that could cause actual results could differ materially from those projected or implied during this call.
Particular, those described in our risk factors included in our documents the company files with the Securities and Exchange Commission.
In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control.
We should not rely on our forward looking statements as predictions of future events.
All forward looking statements that we make on this call are based on assumptions and beliefs as of today and we undertake no obligation to update them, except as required by applicable law.
Our discussion today will include non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for core in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings release and supplemental materials, which was furnished with our Form 10-Q filed today with the FCC.
And May also be found on our Investor relations website at higher plan or car duck.
We reported another outstanding quarter in Q3 with revenues, increasing 38% to $3.7 million from $2.7 million when compared to the same period last year.
Your new drivers out into the platform rose, 54% to 3716, and the third quarter up 29 team as compared to 2014 16, new unique drivers added in the third quarter of 28.
And the same time period, new driver leads to the platform have grown to over 123000 per quarter with a new lives over 51000 needs in September alone.
Creates a tremendous opportunity for us over the next couple of quarters to match drivers with cars Qunar platform.
As we announced a couple of weeks ago, our ability to match drivers with cars has recently began to pick up substantially although we had substantial year over year revenue increase of 38% in the quarter longer lead times for our commercial program was primarily primarily the reason for the slight dip in sequential revenue from the second to the third quarter. In addition to.
Seasonality and some internal restructuring of the sales.
We expect to see a substantial uptick of cars rentals and such when revenue from that activity in Q4, and continued sequential and year over year revenue growth throughout 2020.
[noise] ideal initiatives and OEM pilots are now showing the momentum that we expected in congratulations to the team for thoughtfully executing on our plan, we expect to be Onboarding and OEM dealer pilot for the exclusive dealerships I'm a large global car manufacturer soon.
It would include several dozen dealerships initially and has the capacity to bring a large number of cars onto a platform over the next several quarters.
We used to target low double digit digit cars per dealership and our expectations with the addition of these multi rooftop large commercial dealerships and Oems. We're now moving that number two high double digit too low triple digit cars per dealer shed for these large dealership partners and our core geos.
And low to mid double digits for dealerships overall this should change the rate that we scale cars on the platform dramatically.
The same time, we value all about dealership partners large and small because each group bring something special to this market did you give me some sense of the increase in commercial bookings the number of cars that were renting on our platform <unk> commercial partners increased 85% from Q2 Q3 2019.
In addition from September 2019 to October 2019, commercial bookings grew 98%.
Continuing to build capacity and scaling dealer relationships with the main themes of our dealer initiatives in Q3, and our 2019 second quarter call. We noted 170 commercial accounts had listed approximately 2300 cars on the platform.
Happy to report that today, we have increased commercial accounts by more than 50% to approximately 300 accounts, representing approximately 4300 cars listed on the platform.
4300 cars represent the total cumulative cars listed to the platform without accounting for attrition due to vehicle sales attrition rates of this vehicle population are expected because dealers move inventory in and out of the platform due to sales maintenance pricing and natural de listing a cars from out of market Geo locations.
This is also an advantage for dealers because it helps them place cars with drivers and bring new cars onto the platform.
Last quarter, we mentioned in marketing and car supply focus in five core geos.
These top five key Geos now have thousands of new cars listed in tranches, enabling us to match drivers and large geography knows as an example, our top dealerships now have over 450 cars listed or approximately 45 cars per dealer group.
In aggregate, we have approximately a 125 commercial accounts that have listed 2200 cars in these regions or an average of 17.5 cars per account again. These 2200 cars represent the total cumulative cars listed to the platform without accounting for attrition attrition rates of this vehicle population are expected because dealers have.
Move inventory in and out of the platform due to sales maintenance price and natural de listing cars from out of market Geo locations.
The current pipeline is even more robust with an additional 50 opportunities in these regions with an initial listing projection of over 1800 vehicles.
To put these numbers in context, given our current revenue take rates in demand velocity, we're well on our way to 10000 daily active rentals, which would represent approximately 100 million revenue run rate I cannot say exactly when we will have the 10-K 10000 daily actives, but with more dealers adopting and transportation as a service mentality.
And pending OEM pilots, becoming official we're very optimistic that it will come sooner given the rate of change of cars being added to the platform.
We're also seeing utilization improved as dealers become a large part of our vehicle inventory utilization will become even more important keep you had to track in the future because we found that dedicated commercial supply on the platform is being rented greater than 90% of the time, whereas individual or peer to peer supply is under 75%.
If you went through that for this utilization include owner response time to booking requests availability for acute exchanges competitive pricing in car quality.
The shift in mix of inventory continues to weigh more heavily towards dealers and suites, we expect overall utilization rates to increase.
Well these cars represent future revenue growth, obviously, there's still a major asymmetry between the driver leads were generating and the cars listed on our site. So we continue to increase our investment in people and systems and in our commercial intuiship initiatives in order to close this gap between supply and demand as we scale or inventory to meet demand.
Our partnerships group has focused on accelerating the OEM pilots currently in progress and addition to the two pilots already running with Oems, We expect to add a third OEM program in Q4.
Feedback has been positive with low churn from the dealer side, our integration of the new dealership portal and related technology tools combined with the Onboarding a veteran automotive sales executives to our higher card team has created an environment, where dealers and Oems can officially onboard vehicles enough to the higher car platform.
The success of our dealer initiatives to date is providing that the higher car platform helps dealers and Oems to collaborative we partner with a transportation as a service provider to leverage this monumental shift in the transportation industry.
That is affecting their core businesses in a win win business model for both.
We will continue to operate with a focus on profitable growth, but also make the necessary investments the management and the board feel are needed to grow revenues and scale with our partners.
We are focused on specific investments that didn't we need to be made today in order to capture current and future revenue opportunities like our commercial initiatives.
For example, as our company grows we're putting an increased focus on customer relationship management and customer service to ensure that our customers get the best service from us while at the same time, increasing customer retention satisfaction.
The success of these initiatives are evident in first call response rates above 80% as well as reflected in our current customer reviews and brand ratings across a number of third party rating platforms.
We're also improving and investing in our technology platform to help us respond to our commercial partners.
Needs and putting together specialist onboarding teams. So that we can work on learning from our new partnerships to.
Delighting, our partners and customers and learn to scale. This as we grow our employees are also getting exposure to new business models and get a new opportunities to learn and grow.
We will also help us retain or people who are key to our company success, we are focusing not just on growth, but sustainable growth and also customer satisfaction.
Last note on competition, we compete against vertically integrated asset heavy models that had a high cost structure relative to where I said my model a scalable growth based on more of a SaaS echo system.
They deserve all competitor located near US recently reduced their workforce by 40% and the C level executives were replaced.
This gives us increased confidence and our asset light business model has a partner with commercial dealerships, where we help them build their business and become larger and more profitable even as we build our business to scale in a fiscally prudent manner.
I'd now like to turn the call over to Scott Brown, our Chief Financial Officer to walk through some key financial details from third quarter of 2019 Scott.
Thanks, Joe for the three and nine months ended September Thirtyth 2019, net revenue increased 38% to $3.7 million and 65% to $11 million, respectively, when compared to the equivalent periods last year and down modestly sequentially.
Some $3.8 million in the prior quarter.
Revenue growth in the third quarter was primarily driven by increased booking revenue that rose 4.3% during the quarter as net rental days increased to approximately 146000 in the third quarter from approximately 140000 in the second quarter.
For the reasons the Joe mentioned.
Revenues were also impacted by a reduction in incentives that we benefited from in prior quarters.
We continue to see the higher take rates.
Net revenue margin associated with the two new service two years, we rolled out in Q2.
And in October we reached an all time high with more than 60000 rental days, an annualized rate of over 700000 rental days.
Gross profit increased 61% to two $2.3 million for the three months ended September Thirtyth 2019 from $1.5 million for the same period the prior year.
And increased 1% sequentially from $2.3 million in the prior quarter.
The two additional service to years 80, 20 standard tier and the 70 525 premium tier have dramatically improved our net revenue margin.
Operating efficiencies due to increasing scale continued to favorably impact our direct costs.
As a result, our gross profit margin improved to 63% for the three months ended September Thirtyth 2019, as compared to 54% for the same period, the prior year and 61% the prior quarter as we had a full quarter of the new revenue tiers impact this quarter.
We expect further margin improvement as we realize continued economies of scale and new affiliate marketing opportunities within the digital economy ecosystem.
Operating expenses increased to $6 million for the three months at September Thirtyth, 2019, and 87% increase as compared to $3.2 million for the same period, the prior year and $3.7 million in the prior quarter. This was primarily due to increased staffing expenses.
Marketing and insurance pitch insurance payments to support business expansion.
This quarter does include approximately zero point $7 million and noncash stock based compensation up from just zero point $1 million in the prior year.
Our net loss increased to $3.6 million work 24 cents per share for the three months ended September Thirtyth 2019 from $1.8 million or 15 cents per share in the same period the prior year.
And from $2.1 million or 17 cents per share sequentially from the prior quarter.
After adjusting for the higher noncash stock based compensation in this quarter, though in adjusted net loss of $3 million or 19 cents per share resulted versus $2.1 million or 17 cents per share the prior quarter.
Cash totaled $13.1 million at September Thirtyth, 2019, any increase of $8 million from $5.1 million that the prior quarter ended June Thirtyth 2019, and an increase of $6.3 million from $6.8 million at December 30, Onest 2018.
This increase was primarily the result of the completion of our secondary offering in July 2019.
We believe we're now well position to expand growth by investing into dealership opportunity to drive pilots with car manufacturers and mobility companies into formal strategic partnerships.
While investing in topline growth and continuing to make progress towards cash flow profitability.
Now I'd like to turn the call back to Joe to wrap up.
Thank you Scott. So in summary, we are continuing to grow rapidly and this growth is fueled by macro tailwinds pushing individuals toward a new future.
And it is called transportation as a service, we see higher car perfectly positioned to enable drivers Oems auto dealers and fleet operators access to the transportation as a service opportunity and for a hall to earn revenues from participating rather than disintermediating the traditional players.
Feedback from our OEM and dealership initiatives has been positive. So we're doubling down on efforts to build scaling capacity into the platform to accommodate our vehicle suppliers.
Driver demand continues to be robust and providing a consistent value add experience for our driver customers has been a key focus.
To conclude I believe higher cars, reaching an incredible inflection point and I look forward to continued operational execution and shareholder value creation over the long term with that I'll turn it over to the operator operator.
Thank you Sir as a reminder to ask a question you need to press star one on your telephone.
During the question first the penalty please standby will come from.
Sure.
I sure. Our first question comes from Michael Dahl from Northland Securities. Please go ahead.
Hi, Yes, thanks, guys [laughter] couple questions just to understand the dealer commercial accounts and whatnot.
You gave us the 300 commercial accounts and they have 4300 cars listed on the platform.
How does that compare to the 170 a had.
Mid August with 2300 on the platform are we talking about apples and apples there.
Yes that is apples to apples, Mike and.
Wanted to maintain those those numbers and I wanted to explain those numbers. So number one those numbers are.
Commercial accounts and all time listed cars.
And so I was very specific in saying is a 4300 cars from 300 commercial accounts that have been listed all time on the platform. There is a significant amount of churn in there because those dealerships commercial accounts are selling cars, they're in their taken those cars had a fleet for maintenance and then.
There there either put him back on or if they didn't sold they don't come back on and they and they come in a replacement. So there's a significant amount of churn them.
Apples to apples that is the.
We've had a tremendous growth there.
In a in vehicles listed to the platform.
Got it so just to be clear since August you've added 130.
Commercial accounts and about 2000 cars growth kind of under our cumulative measure correctly.
Got it in then.
And I would one last point on that Mike is that the bulk of those cars started coming on in at the end of September really in September yeah, what inventory that we thought was going to start hitting the platform in late June early July really started to materialize in the latter half.
<unk> for that quarter. So you really starting to see a snap back and or a follow through of all of that inventory coming along into October and that's why I'm really really excited about Q4.
Got it got it and then.
In your additional third quarter highlights you.
You guys talk about number of cars rented on our platform from commercial partners increase.
85% from two Q.
Just a weak Q.
Just help me understand that a little bit deeper invent the commercial bookings grew.
98% from September to October .
I guess break that down for me what do you mean, there yeah. It and so that's part of the shifting the mix conversation that that we're having which is moving the inventory away from peer to peer more towards commercial and the amount of cars coming on our really kind of replacing the peer to peer.
Here cars and so that's the kind of that the shifting and and the turnover of vehicles on the platform. So when we say 85% crop growth sequentially from Q2 to Q3 means that those cars are commercial cars that are being booked in Q.
Two over Q3, and you're seeing a tremendous snap the a false flow through from September to October a 98% growth and that that kind of supports the the statement that I said earlier about cars coming on in the latter half of Q3 and you've seen the flow through into.
Q4.
So it is your dealer or commercial account business now like.
I, 80% of the business peer to peer is down to like 20, I mean, it seems like it shifts dean.
Really to the dealer side is that fair.
Yeah, I mean, it's trending 70 30 now.
And we see that continuing to grow even more into Q4 in 2020.
Okay, Hey, just two more I just want to stay on this.
Dealer or kind of.
Track, if you will so.
Your your five core Gi Joe's those five cities you focused on more and more.
Can you repeat Joe what you said there I.
I think you said there were 450 cars.
Right.
Oh Gee go over those numbers again, because it was pretty quick and the opportunities you have there and then I have one follow up.
Sure so at the top dealerships in these five d. So that's just the top 10 right Yeah, and that's just really our top 10 dealers.
They have about 400 that'd be cars approximately in those top five goes and so that's a equivalent about 45 cars per dealer.
Sorry go ahead, the top 10 dealers in those five Geos have 450 cars lives.
Or about 45 per dealer group, that's what you were saying okay Yep.
Yeah, and then what were you seeing about 125 was it dealers total that have 2200 cars cumulative yeah exactly so a 125 commercial accounts have listed cumulative to 2200 cars approximately 2200 cars in that region.
And then when I look at the pipeline going into Q4 and into 2020, you're looking at it rather 50 dealer groups.
With a potential to put on another 1800 vehicles 1800, plus.
Okay, Hey, My last question and then I'll jump back into queue is.
You made reference to 10000 deeley active in.
Don't have like timeline on that <unk>.
And I get that its lumpy, but what do you do you We act IV.
Hey at the beginning of November .
So we can at least see where your today with daily actives and how far we might think 10000 as a way or how long.
Yeah, I would go back to what Scott was saying about more about that the rental days and how are trending in rental days, we look at what we did it was about 100 and what 45000 rental days in Q3 trending trending really well just on a run.
Three basis, a year over 180000 rental days in Q4.
So do you think about it like that and then you can always with those rental days you can always back into what the average daily. After it is if you like take an average of GMB per day.
Got it Okay, Hey, I'll jump back in queue. Thanks.
Thanks, Mike.
Thank you [laughter]. Our next question comes from Mark Argento from Lake Street. Please go ahead.
Hi, guys. This is John on for Mark Appreciate you taking my question first drilling into the dealers they've done a little bit can you describe some of the attributes of these dealerships what's in your core Joe's and overall, where you're having success and and what's helping you drive that and kind of following up there.
How is the overall and the sales conversion timeline trending now that we have the sales team really ramped up thank you.
Yeah, Great question. So weve wasn't what we found recently is that there are hybrid dealers out there that have really embraced mobility by building out. This this alternative revenue arm have a dealership.
Well was traditionally a new and used car sales asinine products. So parts and services now you have this fourth revenue stream that is which is rental her more you know subscription et cetera, and so weve found these large dealer groups that already had the infrastructure in place that were already running vehicles.
For subscription through their courtesy car programs and so coming to them. The comment was Wow. This is higher car is the platform. What we thought this other platform was going to be and so there really excited about working with us and we're really excited about working with them because not.
Represents you know over a thousand cars over the next two quarters. So these type of these these larger regional hybrid dealer groups are what we've now started to really target here. In addition to the smaller this.
Our independence with a better adding the 10 to 15 cars, that's really the shifting the focus of the outside sales team right now.
Got it and any commentary on kind of overall conversion times you know now that the outside sales team is really ramped up how book running in terms of these dealerships that really understand the mobility space Hi. These dealerships were first contact.
Back to listing a car renting a car for the first time in under 30 days, whereas it's been 90 plus days with a dealership that has to be our has to be sold on on what mobility as a service or transportation as a services so lead times actually pick up as well so I'm.
Really excited about the velocity that outside sales team and our internal sales team has really started to exhibit here latter half for Q3 in early Q4.
Awesome. Thanks, guys.
Thanks Mark.
Thank you.
Next question comes from Jack vendor Art from Maxim Group. Please go ahead.
Hey, guys.
So in the past you've indicated that the average rental fees somewhere around $35 per day.
Given the positive trends report on the key metrics such as new commercial accounts listen vehicles. The new driver additions I just wanted to ask about that $35 day kind of charge is there any material changes in the average rental fee that you are being that's being charged especially given that dealerships.
I believe are more cost competitive.
Yeah, Jack rate question, it's Scott here, maybe I'll take that one yeah. I think you know as as we see these larger dealer groups start to move and on the platform as Joe is talking about we are seeing those dealers being.
Very aggressive from a pricing perspective, but I think by and large when you look across the platform that gross is still kind of in place. We are seeing a couple of key markets, where maybe people are nudging down closer to $30. A day, then $35 today, but not really a dramatic shift then.
And then with those protection plans that we rolled out in Q2, we still have a very strong net revenue margin coming from that so not need not be huge changes, but we are seeing dealers being a bit more aggressive.
Okay. That's helpful thing just to clarify that would you said the the floor of the price would be around $30 then.
Yeah, I think that's the general range is kind of that 30 to $35 gross daily price where were extracting our owner fee revenue share from.
Got it and then in the past you've also noted that I think the overall median rental term you're seeing is around 18 days.
I guess first question is is that still the case.
You know, it's ticked down a little bit I think we're probably going in that 16 day range right now yeah that that.
You know, we're still in kind of exploring what what that looks like I think when you have professional fleet managers on this site it makes it easier to rent cars.
In like three day like over the weekend versus all whole wheat, and so it's a little bit easier to have a user base type of driver come in and rent for two or three days and then come off versus the the peer to peer side, where you rented from an individual and it's a lot easier to take it for a weekly.
Yes, if you're a driver and if you're a vehicle owners because you don't have to worry about the key hand off so as we start to reduce friction Brad bringing on commercial accounts I would as I would assume you're going to see that tick down a little bit.
Okay, and then a that's helpful and then lastly.
You mentioned earlier that the the number of commercial accounts or commercial listed vehicles does not include a attrition. We were you referring to the commercial accounts through the commercialization vehicles.
Commercial listed vehicles.
I actually retention of vehicle owners.
Is actually increasing I'm seeing that in our retention rates.
So that's a that's a positive and that's that's a testament to all of the backend kind of support system that that Henry and his team have.
Have help set up with the payout internal operations the restructuring of some of our sales agents are bringing on an outsider near shore call Center all of that stuff is kind of attributing to better branding metrics better customer retention, both on the driver and vehicle owners side.
And then yes, the attrition or the churn of those vehicles and becomes a car sales maintenance et cetera.
Got it okay. Thank you guys. That's all for me.
Thank you.
Our next question comes from Jon Hickman from Ladenburg Thalmann. Please go ahead.
Hi, I'm [laughter] it I know that the getting the commercial.
Side going with more and more commercial vehicles on the platform has been kind of a goal of yours for quite a while it seems like you kind of hit the secret sauce in the last.
Say two months or so can you elaborate on what changed or what's happened there to.
Really get Pinsight going.
Yeah, well, it's been a it's been a monumental.
Achievement from our outside and inside sales team to get this commercial initiative up and running.
We've we've had to set up captive financing partners, we've had to set up garage insurance policies, we've had to help the dealerships through entity formation.
Vehicle registration vehicles loaded to the side and then teach them how to.
Manage a rental car fleet, so that effort has taken a little bit longer than I'd expected, but I think weve. Yeah, you alluded to the secret sauce, I think we've hit the right.
The right type of dealer and not these are these are larger not hybrid type dealers that are that are used to running rental car fleets or that already had rental car fleets set up and so we're we've we've kind of really shifted the focus from a marketing from a lead Gen perspective.
To start focusing on those types of dealerships because those types of dealerships are embracing transportation as a service and they see the riding on the wall. So that's been the shift and from a more of a shotgun approach to more of a targeted sniper approach.
Okay.
So.
Sales personnel wise, how many people do you have actually in this effort.
Oh, it's about 30 35 sales agents right now.
And like six months ago.
Six months ago, I think we're probably around 2020 to 23 or so.
Okay.
Thanks, that's it for me.
Thanks, Jeff.
Thank you.
Our next question comes from Mike Grondahl from Northland Securities. Please go ahead.
Hey, guys just a couple more.
So could you see just a little bit more how that you have to current OEM pilots how are they going.
And then it sounds like you're starting a third OEM pilot this quarter.
With I think you said several dozen dealers initially could you just provide a little bit more color on the two and then the new one.
Yes. Good question. So the the pilot running with the large domestic their ask was earned to own program standardized earned to own or rent to own type program.
We are in process of rolling out that earned to own piece through dealer can act.
And so that's that's going to be that that's a big shonka or that was a big piece of what they were asking for so rolling that out in the next you know 30 days or so and making sure that that as successful as a key to is a key JP I to that to that pilot.
And Joe is that one of the two.
It does have the two lives today, yeah. That's one of the two existing okay. Yeah. That's one of them to explain the other one via the other one that was existing.
<unk> is still is still running I think that we have a handful of dealerships that are participating its been a little bit slower than we had expected.
And that's not because of the program I think thats more of internal internal restructuring that that had that specific manufacturer. So as soon as they get they get everything figured out on there and I think we're going to be will ramp that back up.
And then the third pilot that we're going to be launching in Q4 is actually really exciting we had them in our office a couple of weeks ago. They are looking to.
Essentially use our backend platform to renting cars through one of their high end dealership brands.
And I'm excited with that one because it's a dozen a dozen initially but really can ramp.
Quickly into multiple.
It's a little bit of different move away from the traditional car sharing for ride sharing highly renting to burn Lyft drivers. This pilot becomes more of a.
Renting of cars or an extension of a leasing of cars through through the through their high end dealerships. So I think margins are little bit better pricing power as a little bit better et cetera. So that's hum I'm excited about that and I think that I'm, hoping to.
Given the launch that in Q4, and then see where that goes into doing at the end customer that pilot is it just the person driving the car, but not in Overlift driver I didn't quite follow yet correct. So this would be customers coming off here three year leases.
And this manufacturer wine to extend.
Those those drivers into.
2020 2021 cars.
So it's a it's not a new berlitz driver. This is a driver where they are they were former customers are they are customers are that dealership and they're looking to provide a seamless brand experience into a newer model.
This is a way to kind of rent to own essentially for that customer.
Got it for that car coming off three year Lee.
Hi, no they're gonna be there would be leasing a new cars for cars that are coming out of three year leases.
Got it and the putting those new cars on your cap. So they have access new car inventory sitting on the lot they want to get those customers transition into those new cars. So this is a way using our program to transition them into new cars.
And then eventually they turn over they turn over and signed new two three year leases, but this is a good way for them to essentially have an extended test drive in vehicle.
Got it okay in he.
The technology platform.
That you have and you've been fine tuning and adding things to you know the last couple of years.
What shape. It is is it in is there a lot more to go or what are the hiccups you're still working on.
With the technology platform in a big part of the raise was too so that we can bring in technology personnel and so weve recently hired a.
A dev ops.
I did engineer Reid.
We're looking at a couple of Dev ops leads and we're building that team internally.
Because we do need to we need we need to build out our capacity there internally and so I'm excited because it's been a I think we see some light at the end of the tunnel there with with the hiring side of things in that it's good to work by accelerating our product pipeline.
Are those are the dealers.
The the larger dealers happy with the current technology Irds, you're more you need to do to help them.
There is more that we need to do to help them I mean, we've rolled out version one and yeah. There is there are some enhancements there being taken place.
What's good is that we have a great dialogue with the with those partners.
And we have a dedicated customer support rap you have an outside team you've got an inside team and all of them are soliciting feedback I think we've done a good job over the past couple of years of creating this.
Positive feedback loop from the front office staff that then.
Communicate those specs to the middle office.
Project managers project manager shut them into Deps backs dabs execute on it and then it gets rolled out and then we get we started that feedback loop all over again, so I think that's actually one of the real benefits of our platform is that we have that back and support staff. We have the front end support staff as very.
Unique in the industry.
And so that's how we're able to really kind of actually develop here.
Got it and lastly, you got a sentence in the press release. It says revenues were also impacted by a reduction in driver incentives seasonality and timing of commercial car supply on the platform.
Quantify each one of those roughly.
Quantify each one of those roughly.
I don't have a I don't have a real break down there.
I think you know what happened was that it was really the softness in the dealing hires.
Yeah, a tremendous amount of demand.
But if we if we had had the cars. We still would have we still would have grown and we would have hit our targets. It is just that that inventory came on a little then later in the quarter.
And so I don't have that really broken down I think you can look back at the core and look at the seasonality there.
To come up with those numbers and that's something maybe we can do it take away as a follow up to get to you.
Got it okay. Thanks, Thanks, guys.
Alright, Thanks, Mike.
Thank you.
I sure next question comes from Rich.
J.H. Darby. Please go ahead.
Hi, Joe Nice quarter.
I had question regarding.
The amount to pay for that potential drive it has to do now that you have the dealership.
Model going forward do they have to do any additional paperwork.
I mean, what they would normally do with you and now dealership or is it kind of seamless.
Hi, good questions question rich.
I you know, it's it's different in the sense that it's actually a faster key exchange or you're seeing that they are those dealerships have dedicated support staff that are there and available Oh, you know compared to for example, a peer to peer where you wouldnt see.
You wouldn't see that individual owner wouldn't necessarily be available during the day and so.
It's actually its reducing friction by bringing in these commercial vehicle owners to rank Carson drivers.
Okay. Thank you.
Thank you.
This concludes our today's session at this time I like to turn the call back over to Joe Denardi CEO for closing remarks.
Okay.
Great. Thanks, operator, and yeah. Thank you again for joining us.
I think we've kind of alluded to what we're seeing in October or what we saw in October and I'm really excited about what Q4 and 2020 is going to bring.
So look forward to continuing to update you on our progress heading into 2020, and thanks again for joining us that's it operator.
Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect today.