Q2 2022 Helbiz Inc Earnings Call

Thank you for standing by and welcome to the L. This second quarter 2022 earnings conference call.

Currently all participants are in a listen only mode.

As a reminder, today's program will be recorded.

If anyone objects. Please disconnect now I'd like to introduce your host for todays call.

Gary defaults, yet managing director with the Blue Blue shirt group Mr.

Mr Deforest.

<unk>. Please go ahead.

Thank you operator, and Hello, everyone. Welcome to <unk> second quarter 2022 results conference call with US today are founder and Chief Executive Officer, Salvatore Palila, and Chief Financial Officer, Julio Pro forma.

We issued our financial results press release today after the market close it's available via newswires and on our website and investors that held as dot com a replay of this conference call will be available later today on the Investor Relations page of our website. Please note that our press release and this conference call will contain forward looking statements that are subject to risks and uncertainties.

These forward looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors <unk> can give no assurance that these statements will prove to be correct. We have no obligation to update these statements I will now turn the call over to Salvatore to begin.

Yeah.

Thank you Gary and good day everyone.

Thank you for joining today's call to review our business performance and financial results for the second quarter of 2022.

I will provide a business update before turning the call over to Julia for the financials.

To start off I want to make you all aware that we have focused our wealth team from top to bottom to drive.

Operation as quickly as possible.

We spend a lot of effort and money over the past year building out infrastructure, we introduced mainly attractive products and therapies and in general are prepared for export as well.

These are quite large investment, which you have seen in our operation expenses and capital spending.

With this foundation in place.

Now is the time to convert our investment into profit.

We directed our teams to shift their mindset to cost effectiveness and efficient use of capital and a bottom line focuses.

Our immediate goal is to drive margin expansion operating leverage conserve cash and invest smartly and effectively.

In the second quarter, we saw initial sign ups effects.

Our core mobility segment cost of revenue declined 70% versus last year.

We believe we can continue to scale mobility by growing revenue rapidly and expanding gross margin while controlling operating expenses.

These will be primarily.

Upon which every employee of Elbit, we'd be judge starting from June .

Our focus on cost and margin does not the credit from our effort to drive growth.

In that regard performance in the second quarter was quite solid.

Revenue of $4 $4 million was up 46% year over year, and 32% compared to the first quarter.

Revenue growth was driving both by increasing license and driving in our core micro mobility business and by our entry into media and food delivery last year.

As our core business mobility saw solid growth in the key measure of quarterly activity platform user and trip.

The growth reflects the rebounding travel and important seasonal factor the right of the warm weather.

Our team is doing a remarkable job of navigating a complex regulatory environment.

We are working closely.

With CD officer to ensure that we provide a safe reliable service.

June 32020, we all.

The licenses in 38 cities in both the U S and Europe .

To sustain these high piece of expansion, we have build our fleet and operating teams in.

In Tampa, Florida, we were selected as a new vendor to replace an existing operator.

Expanding fleet niche again in Miami, Florida.

Florida are on plan.

We also received an expansion for our license in Washington D C and continue to be the only operator in my in looking abroad. We recently expanded our global presence in Australia.

We are partnering with Logan CD Council of the Queensland.

Clinique cities <unk> operation.

We are also starting a program with a larger a leading lockout holiday rental operator to offer our scooter to their guest in.

In Italy, we are partnering with universal feature to acquired local rider with a file activation with the new minions movie.

Even with the near term goal of scaling the profitability operation we have locked in yard in domestic long term opportunity, we signed a letter of intent to acquire yields and other leading micro mobility company in the U S and Egypt is underway, we will update the market as it progress.

Also looking longer term just last week, we introduced taxi highly two hour.

This therapy.

And then our mobility offering to our customer for example.

Them to realize even.

Even in that way.

The opportunity here is in order of magnitude greater than screwed along and.

And it's capital light.

It doesn't require us to invest in vehicles you will.

You'll hear more about these as one new product as we rollout in the coming months.

On our technology front, we are investing for future develop.

It's new technologies in early July we introduced how let checker, our SaaS available in real time, how letter.

<unk> function helmet checker, it's part of the healthy side of course, but also can be licensed by others in our industry.

As an industry leader, we are motivated to promote safe riding of all.

Micro mobility vehicles.

Finally found growth we're building our liquidity.

In July and August we completed a $5 million financing.

That is part of a plan that green bond issue that could be up to $50 million.

Our bonds are considering green and and can tap a wider pool of investors due to the sustainability initiatives that we launched last December those guidelines reflect year, our commitment to ESG sites.

Infection.

Now, let me turn the call over to our CFO <unk> to discuss our financial performance for the second quarter Julia.

Yes.

Sorry about the OTA.

Our detailed financials can be found in our earnings release and 10-Q filings. So we will concentrate on discussing the drivers of financial performance keep in mind that all figures given are for the second quarter of 2022.

All comparisons are with the second quarter of 2012, unless I note otherwise, we delivered another strong quarter and a solid financial performance. Despite continued headwinds from industry.

Fly chain issue was there any inflationary cost pressures.

Both year over years.

Sequential revenue growth that was an all time high in Q2 with strong growth in mobility operating metrics revenue of $4 4 million.

Was up 46% from one year ago, and 32% sequentially.

Mobility continue to show improvement with strong topline growth contributing 62% of total revenue growing 72% sequentially due to the growing fleet size and growing awareness coupled with the strong utilization due to the seasonal factor of warmer weather revenue, it's still dominate.

Did buy paper right.

Those patients are gaining traction.

Overall, the continued strengthening of the U S. Dollar had an unfavorable impact on revenue in constant currency and mobility revenue without being 8% higher in Q2 2022 than what we reported.

Across regions strong mobility revenue was driven by solid performance in the key metrics that measure usage.

Quarterly active platform users were up 90% sequentially and up 47% at year over year. The number of trips so were up 71% sequentially and 6% a year ago.

Looking at the other lines of business media.

<unk> to be an engine of growth contributing 34% of total revenue.

Most media revenue came from commercialization of media rights and Elbit lives subscriptions, we are building momentum in lives subscriptions through the unlimited offering.

Kitchen revenue nearly doubled sequentially as we continue to build awareness of this service in our initial test the market for Milano instantly.

Turning to the cost and expenses I want to reiterate <unk> comment that how big that is now a 100% focused on getting this to profitable operations all costs and expenses are subject to reveal.

We'll continue to invest in growth, but we're doing it more effectively and efficiently.

The first area of success is mobility cost of revenue.

Which decreased by 17% we're constantly looking for places to automate our operations. So that we can increase the efficiency and customer service, while decreasing cost.

Allows us to quickly identifying banchory to move the popular spots of vehicles, which may need a battery change. Meanwhile, total operating expenses are doubled versus last year, reflecting our rapid growth overall cost of revenue was 69% higher mainly due to the content licensing.

Spencers in media.

Setting the improvements in mobility.

Going forward look for much more subdued opex growth.

As we focus on leveraging the infrastructure, we have deals over the past year.

Digging into operating.

Expenses for the quarter R&D expense growth represents an investment in our in house engineering team to further optimize our operating systems and customer facing sales and marketing expenses grew from last year and demonstrating our commitment to advertising.

<unk> and business development, especially after the launch of media and food delivery offerings.

We incurred $1 million in noncash stock based compensation expense, which accounted for almost 5% of the total operating expenses.

Turning to our balance sheet and liquidity at the end of Q2 cash and equivalents were $2 5 million. During Q2, we used cash to invest in growth in particular, the purchase of new electric vehicles and to expand the operating fleet.

Our own Uct's keeping.

Keep in mind that our capital allocation approach is to prioritize investments in attractive markets, where we are positioned to grow we focus on initiatives that strengthen our platforms.

The geographic footprint and customer reach which in turn lowers our customer acquisition cost and increases the lifetime value of our customers. Our growth goals are aggressive. So naturally we are focused on maintaining a healthy level of funding.

In April we secured a $10 million of capital via two convertible notes and in July we completed a 2 million financing through an issuance of the notes and further raised an additional $3 million via convertible notes.

With increased liquidity, we remain confident with our ability to fund the business and pursue our objectives. We're always exploring cost efficient forms of capital to fund the business and opportunities to further optimize our capital structure.

Looking ahead, we expect third quarter revenue to be up sequentially as we benefit from the higher fleet utilization due to the seasonal factor of warmer weather.

The full year 2020 to reiterate our expectation for revenue to that book, we're solidly on track to achieve this goal now.

Now, let me turn the call to sell that order for some closing remarks.

Okay.

Thank you Julien.

Q2 was a pivotal quarter for analytics we.

We intensify our focus on operating profitability, putting every cost under the microscope to ensure that we are driving profitability operation.

Our revenue grew so extensively and we expanded our operating footprint.

With more license in the U S and our fixed sites grew as we deploy new vehicle.

We also started licensing our <unk> compliance technology, creating a completely new revenue opportunities.

Most importantly, we are building the foundation to capture the massive long term growth opportunity in front of us.

We also just announced that the help with taxi taxi hailing service within our App.

<unk> mobility offering in a high value capital lightweight.

When we look to the future we have never been more excited about the work that we can accomplish in the amount of time, we thank you for your interest and support and look forward to reporting our progress to you again in the months ahead now.

Now I will turn the call back to Gary to ramp up.

Gary.

Thank you all for joining the call. If you have any follow up questions. Please do not hesitate to contact us by email or phone shown at the bottom of our press release. This concludes today's conference call. Thank you for your participation you may now disconnect.

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