Wejo Limited Q4 2022 Earnings Call and Business Update

Because we have already booked $10 million of contracted revenue for the year, which is represented by our next four quarters of backlog run off.

After completing a few state dot's deals, we now better understand the sales cycle for public sector contract Awards and we believe we will win a substantial number of awards in 2023. Additionally, we have a strong pipeline, which on a probability adjusted basis represents another 30% to 40% of our 2023.

Revenue goals, our pipeline is made up of a rich opportunity set and our new and existing marketplace products as well as automotive SaaS deals that tend to take longer to win and onboard but add significant revenue once they are one.

While we are off to a great start in 2023 and feel confident in our annual guidance. There are a number of factors that may impact, our revenue performance quarter to quarter, including the timing and amount amounts of large insurance contracts and SaaS deals as we gain clarity on contract structure and timing, we may adjust or tightening the range on our revenue.

Guidance as we progress throughout the year.

At this time, we have taken significant steps to manage our cost base and to be as efficient as possible about a week and a half ago, we announced that we are reducing costs in our workforce facilities and other areas and that we are very focused on driving contribution margin grow along with revenue growth. This enabled.

US to further improve our 2023 adjusted EBITDA loss guidance by about $15 million to the range of $45 million to $55 million.

This positions <unk> to have positive adjusted EBITDA. Following the first half of 2020 for capitalizing the business is a critical goal and reach out and we are targeting being fully capitalized by mid 2023, but more than enough capital to get to our expected cash flow breakeven point in mid 2024.

While we build towards our long term capital strategy, we have been raising smaller amounts of capital and continue to work on our capital bridge to get us to the expected closing of the pipe and the <unk> business combination currently expected in June we are exploring several different paths with investors and we'll continue to update the market as.

They develop.

With the <unk> business combination the pipe and raising bridge capital we are targeting a raise of over $100 million net of transaction costs based on our progress to date and developing a pipe and the <unk> Trust at $57 million. We believe we are more than halfway to this capital raising goal is.

As previously stated the <unk> trusted subject to redemptions, although we believe our novel strategy will result in fewer redemptions than is typical in the market.

We're very focused on building a profitable high growth business and reaching cash flow breakeven by mid 2024, assuming revenue and cost reduction goals amounts our progress in 2022, along with recent announcements about our reduced burn underscore that focus.

We also believe the full capitalization of the business will unlock significant value for our shareholders and now I will pass it back to Richard for his closing remarks.

Thank you John as I mentioned at the start we continue to expand our platform throughout 2022 and I believe the momentum we gained as posture will carry us into 2023.

We just that's an inflection point and the best in us.

Well positioned to capitalize on the significant market changes facing pointed us enhancement of our platform through scalability will enable us to accelerate our expansion into new markets.

We expect that the more reusable apart from becomes the faster more profitable we can deploy it in new areas of opportunity the.

The network effects more products stations across more verticals float tails for broader base of customers and more customers buying more product concepts will enable greater revenue.

That's why we are guiding to a tangible net revenue growth in 2023 at the midpoint of our guidance.

We believe the scalable recent reasonable platform will enable operational efficiencies, while also helped lower our cost structure and drive better margins.

Before we close out this earnings call I'd like to reiterate some key points that John and I have made these included we've already secured $10 million in backlog for 2023. This puts us on target to achieve net revenue in our guidance range of $20 million that you made in 2023.

We have been raising small amounts of capital on a working capital bridge to get us to the expected closing of the pipe that Teekay <unk> business combination.

We are on track to close the business combination with Teekay being late second quarter of 2023 this year.

<unk> already retained $57 million and interest and we are well on our way in raising a pilot with a newly announced $20 million strategic anchor investment.

Thank you for joining us call, John and I will now take questions. Thank you.

Thank you, we'll now be conducting a question and answer session.

<unk> joined us via the audio break and we'd like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is another question in queue.

You May press star two to remove yourself from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the starkey.

Moment, please while we poll for your questions.

<unk>.

Minor if he would like to ask a question. Please press star one on your telephone keypad.

Our first questions come from the line of Jeff Mueller. Please proceed with your questions.

Yeah, Thanks, a lot Jeff Mueller Baird.

The 20 million it sounds like we'll get more detail later on who the investor in his butt with anything further you can say it with time is that a new investor to huizhou is it a existing commercial partner or not.

And then just what is the investment contingent upon.

Yes.

So it's a it's a new investor.

And you know.

We will we've got other conditions are really.

Something that were not yet publicly disclosing but theyre generally around the relationship that we have and also assuring that weekend a raise of an adequate amount of capital.

Which I'm, we're very confident that both of those are going to be things that we can do.

We're very excited about where we're headed from a pipe perspective, we have a lot of very strong dialogue going on not just us some LOI button a lot of other good dialogue.

We're headed towards a good close of the two to be a business combination that apply once all the pieces fall into place.

Got it and then the 'twenty to 'twenty three guidance.

I mean, you gave us a lot of detail on whats contracted what's from pipeline et cetera. There was various references to some of the end market growth. The commentary as well can you. Just help me like are you expecting at all a meaningful contribution from like insurance or media measurement or is this mostly continued build out of track.

Thick auto SaaS and then it sounds like increased fleet contribution.

Yeah, we have very strong dialogue in the insurance sector and I know, we talked a lot about that last year, but we're down now to the detailed process.

Customer and obviously the beta relationship.

Negotiations, we have multiple customers on the insurance front and so we do expect that.

This will be the year, obviously, there's lots of details to work out as you as you basically introduce a new product.

Which we're in the midst of doing and are very excited about where that centered on the audience front. We have now as we talked about late last year and early into this year we added.

Millions of vehicles of data in the infotainment space, and which really gives us now the capability to really fully launched that there's great customer dialogue ongoing there's really interesting product developments underway as well all of which will go to support that revenue. So we expect that both of those categories will contribute means.

<unk> to our 2023 revenue.

Got it.

On NR or 107% is lower than I would think at this.

Scale level and with the land and expand motion.

Just can you talk through that like any offsets that I should be cognizant of like any SaaS agreement that there was one time revenue or just.

Just anything to bridge I guess, why it's not higher than 107.

I would say that is as we increase our SaaS offerings.

And our product set as you know.

Our first couple of years were really primarily a data licensing relationship.

The key to having a higher MRO are.

And we've done a lot of benchmarking and studying on this is really ultimately it's those capabilities that customers will expand on we do have a good expansion set with customers, we see that growing increasingly out.

And so what we do is we measure the beginning of the year customers on January one how did they do all year long did they increase decrease did they leave we have very few leaders by the way and typically it's because they've changed business strategy in a couple of cases, where they've gone out, but we are very very high sort of core retention.

And then we add add capabilities as we progressed, we believe that as we move forward on product development, you will see that number exit lives, but we feel good about that number as to where it is.

Okay, and then on the further reducing the burn rate and the announcement from last week can you just help me with where are you on actioning. Those expense saves just trying to understand how quickly you expect to get down to that $3 million or so monthly burn rate.

Yeah. So we're we've actually on the people side, we've taken the actions that we need it was a combination of contractors and existing employees. We've notified employees at this point.

<unk>.

I would expect that the full effect of that will be felt starting in the third quarter. We have also.

We're in the process of moving to a nearly virtual not 100% virtual but nearly virtual.

Office infrastructure, certainly, we're gonna have meeting space and capabilities for people to meet because that's important but the main infrastructure will reduce.

And then we really looked hard at the way that we are onboarding things like data and the impact that that has on cloud and just took another really harvest Rob.

We've also taken a hard looking at look at the way, we're pricing to make sure that we're pricing or the maximum effect.

And the market in all of those things really are either being implemented now or have already been implemented. So we'll start seeing the effects.

I would say by third quarter, certainly second quarter will improve a little bit in the third quarter will improve a lot and by the fourth quarter without combined with revenue growth will really see some significant improvement.

Got it and then I recognize that Youre prioritizing spend on <unk>.

Products and initiatives that are more like near term revenue opportunities, but just as you manage the expense base what are the more.

Kind of ambitious initiatives or beyond 2020 for revenue opportunities that youre prioritizing I guess, maintaining some level of investment.

Right.

So we continue to end to do modest investments in edge based technology and the processing of data. We believe the combination of edge based processing of data and the synthetic build of a data asset is kind of ASIC.

<unk> continues maybe highly relevant in all its nice of a specialist now AI is becoming more important. So we maintain some modest investment we expect that to have a benefit for US 20 at the end of 'twenty four and beyond say, what what we call neural edge.

We continue to do some modest investment in and I'm getting interesting inbound demand from Oems.

Got it thank you.

Thank you Jeff Thanks, Jeff.

Thank you there are no further questions at this time I'd now like to hand, the call back over to management for any closing comments.

Okay.

Thank you well fed joining us today I hope you are excited by it but what we've demonstrated is as a business by scaling revenues by cutting costs and sourcing capital in a tough environment. We look forward having further questions for me off this call.

Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect at this time enjoy the rest of your day. Thank you.