Q1 2023 Otonomo Technologies Ltd Earnings Call
Speaker 1: The this.
Speaker 2: Good morning and welcome to the Autonomo First Quarter 2023 Ernie's conference call. All participants will be in a listen only mode. Should you need assistance please signal conference specialists by pressing the start key followed by zero. After today's presentation there will be an opportunity to ask questions.
Speaker 2: To ask a question, you may press star than one on your touch tone phone. And to if you're your question, please press star than two. Please note this event is being recorded. Thank you all for joining us today. Welcome to Autonomous First Quarter 2023 Earnings Call. Before we begin, I would like to remind you that our discussions today will include four looking statements that are subject to risk and uncertainties.
Speaker 2: relating to future events and the future financial performance of autonomous. Actual results could differ materially from those anticipated in the forward looking statement. For looking statements made today speak only to our expectations as of today, and we undertake no obligation to publicly update or revise them. For a discussion of some of the important risk factors that could cause actual results to differ materially.
Speaker 2: Please download one from the investor relation section of the company's website. Following the call, a replay of the webcast will be available on autonomous investor relations website. Please also note that we will present non-gap operating loss on today's call, which is a historical non- GAAP financial measure.
Speaker 2: Because this financial measure is used in autonomous internal analysis of financial and operating performance, Autonomo believes that it is provides increased transparency to investors of manage and view and economic performance. Autonomo also believes that the presentation of the measures allow investors to more effectively evaluate and compare the performance of Autonomo to that of its peers.
Speaker 2: Although Autonomo presentation of this non-GAP measure may not be comparable to other similar title measures of other companies, a reconciliation of this measure to its most directly comparable GAAP financial measure is included in our earnings release.
Speaker 2: Today we are joined by Mr. Ben Volkow, CEO and co-founder of Autonomow and Ms. Bonny-Mov, TFO of Autonomow. Ben will start us off with an update on the current state of the market and the business. Next, Bonny-Mov will give us an overview of the company's financial results. We will then open and call to a live question and answer session.
Speaker 2: With that, I would like to turn the call over to Mr. Ben Vokow. Ben, please go ahead.
Speaker 3: Thank you.
Speaker 4: Hi everyone, and thank you for joining Autonomous Q1 2023 Financier Results Conference
Speaker 4: Before I get into our Q1 results, let me first update you on the progress. Regarding the merger transaction with Elgin3, it was announced in mid-February. We couldn't be more excited about the merger. It is highly complementary and synergetic to a
Speaker 4: for faster assistance with spawns.
Speaker 4: Value creation across the mobility ecosystem will affect OEMs, transportation, insurance carriers, fleet companies, and mobility assistance service providers.
Speaker 4: As we shared in the past, we expect the combined company will be extremely well-capitalized.
Speaker 4: We revenues north of 185 million dollars in 2022.
Speaker 4: More than 100-parts-shift agreement across the automotive OEMs transportation, insurance, fleet and rental sectors, and 36 registered and pending patents. With over 1.7 billion connected vehicles, expected to be on the road by the next decade, the combined company will serve markets totalling more than 100 billion dollars in value.
Speaker 4: As we shared before, this old stock transaction is expected to close in the third quarter of 2023.
Speaker 4: Since the announcement
Speaker 4: The teams on both sides.
Speaker 4: We could not have been more excited about the synergy that joins value proposition and the strong return to our shareholders, we believe will come out of this merger. I will be happy to address your questions regarding the merger at the end of our preferred remarks today. Another change that happened in Q1 was our decision to start the process of sunsetting our connected
Speaker 4: which includes services relating to aggregate build data.
Speaker 4: This decision has owed us to dabble down our efforts and focus on the fast growing and larger markets of our business.
Speaker 4: As a result, the fleet and insurance service related sectors that many analysts
Speaker 4: believe are representing the largest time in the market and where we have been putting a lot of effort in the last quarter has received even more focus.
Speaker 4: At the same time, they aggregate connected vehicle data market.
Speaker 4: that represents smaller turn.
Speaker 4: and his highly competitive was died down on our end.
Speaker 4: Now for more details on our Q1, I'll hand it over to athonormal CFO Bonimouave.
Speaker 1: pu.
Speaker 5: Breven use for the first quarter, 2023, reach 1.8 million, compared to 1 million for the first quarter of 2022.
Speaker 5: Both was primarily driven by the contribution of the flow-vergon youth, which was consolidated for the first time in Q2 2022.
Speaker 5: Before I move further into the numbers, I want to remind you that our non-GAAP operating loss excludes stop-based compensation expenses, depreciation, amortization of acquired intangible assets, contingent liability expenses related to the flow of position, and the
Speaker 5: and restructuring costs. Our GAAP financial results, along with the reconciliation between gap and non-gap results, can be finding out we're earning relief.
Speaker 5: I will now turn to the digital financial results for the quarter.
Speaker 5: Our gap operating loss for Q1223 was 17.1 million compared to 15.1 million in the first quarter of 2022.
Speaker 5: The increasing the gap operating loss was mainly driven by 2 million of restructuring costs, 3.4 million of transaction costs, 1.7 million operational loss related to the flow, which was not included in Q1 2022.
Speaker 5: 1.4 million expenses related to evaluation of contingent liability, cost set by reduction in operational cost related to the company's cost reduction initiative in the amount of approximately $5 million.
Speaker 5: In the first quarter, non-gap operating loss was 12 million compared to 12.5 million for the first quarter of 2022.
Speaker 5: The decrease is mainly driven by reduction in payroll and operational costs, following our cost reduction in the SHICS, often by operational costs related to the flow and transaction costs.
Speaker 5: Our cloud infrastructure is sensitive, considered primarily accruated to the third party cloud services, which decreased by 35%, from 1.2 million in Q1 2022, to 0.8 million in Q1 2023.
Speaker 5: The decree is also attributed to our cost reduction leadership.
Speaker 5: Cost of services includes purchasing of data of 0.5 million and increased of 46% year-over-year, which reflects the cost we pay to the OEM and other data providers for the data used in the product.
Speaker 5: For a $4 million, which is related to the cost of services provided to the flow customers and for $3 million, which was related to the restructuring. Our research and development expenses and our self-enmarketing expenses for the first quarter of 2023.
Speaker 5: worth 3.6 million, including 0.3 million, restructuring expenses, and 4.6 million, including 1.3 million, restructuring expenses, respectively.
Speaker 5: That expenses, including restructuring expenses, decreased by 31% and 25% respectively, year-over-year, may need due to the cost reduction initiative.
Speaker 5: General and administrative expenses for the first quarter of 2020 were $7.3 million, including $3.6 million transaction expenses and $0.1 million restructuring expenses, compared to $5 million in the same period a year ago.
Speaker 5: Net expenses, excluding restructuring and transaction expenses, decreased by 26%, mainly due to our cost reduction initiative.
Speaker 5: Turning to the balance sheet, we ended the quarter with 129.8 million using cash and cash equivalent, short and restricted cash, short and deposits and marketable security.
Speaker 5: A decrease of 10.9 million from year end 2022, driven mostly by cash use in operating activities.
Speaker 5: Operator, we are now ready to say question.
Speaker 2: Thank you. We will now begin the question and answer session. To ask a question, you may press star than one or you've touched tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. And to withdraw your question, please press star than two. And at this time, we'll pause momentarily to assemble our roster. Yeah, it will be the first to start after.
Speaker 6: and also the combined entity. Could you elaborate a little bit on the biggest opportunity for synergies or how a ton of mo could help urgently on those two specific end markets integrate the vehicle data that you guys have access to and the opportunity there?
Speaker 4: Yes, hi Josh, this is Dan and I will try to take it.
Speaker 4: I think that as part of the cost reduction, we understood that we cannot continue to run on many, many different segments and that we need to focus.
Speaker 4: And insurance in three, so I said not by us, I'm quoting McKenzie as McKenzie, is really maybe the two largest school of opportunities.
Speaker 4: And in the same time, it's also much more synergetic to urgently business, which we have in mind than the aggregate data.
Speaker 4: Autonomous with the flow technologies that we acquired is doing a tricky way on the insurance side and our fleet business which is organic is growing very fast.
Speaker 4: So all the right reasons were for us to focus on those segments.
I would add that the LGNP has its customers without streets.
such as with the one-run, the enterprise and insurance companies. So there's a lot of folks of synergy on that front, because the intention is really after the merger to come strong with a larger and unified solution of the urgency of normal.
And we are accessing the same customers, the same markets, and we've seen here, a one from one equals three, opportunity out here. In terms of specific use cases, autonomous vehicle is doing today, seeing around you and around it.
what the call fusion, which is using connected card data for insurance or accident reconstruction. And with the streets, we are helping them to get access to embedded the connected data and also get insights into fuel and EV usage, for example.
The intention later on is really also to use some of those capabilities.
And together we tell you to imagine a world where you can do predicting maintenance for different sweets.
and eliminate the need to send it to the rescue. Or imagine a world where you walk with them.
which is different situation and as part of the roadside assistance offering you can also stop the getchings like drivers calling.
the grades should be rounds free but I became the prize before exact lack only the School's
I hope this answers the question. It's not a particular ablution a bit more.
Thank you, and then just as a follow-up, I know the company has been aggressive with some of the cost cuts. Are those done at this point? You finished the quarter, I believe, with around 130 million cash.
and cash equivalents or expectations that you could talk about going forward through convening other reductions or what the cash burn may look like, I'm just wondering how that cash is trending since you implemented these cuts. Thanks.
Bonita, of course. Bonita wants to take it.
Um so we um
We did our cut costs in starting with a, putting the budget for 2020-03 and this is those with line with what we expected. So currently we are at the point that we believe that the current headcount serves the company at the best or at the focus area.
in other places like Lisa, of offices, and AWS costs and other costs that we can take measure to class. This is something that, you know, we've been
focused from day one. So we keep that initiative going forward as well.
So we keep that initiative going forward as well. Thank you. I'll have that in the queue.
Again, if you have a question, please press star then one. Our next question will come from Hansen Chang with Riva Ridge. Please go ahead.
Hi, thanks for taking my question. And I apologize if I missed this at the beginning of the call, but could you provide an update on the timing of the urgently transaction and when we can see certain regulatory filings like the proxy statement file?
So we urgently and ask for public S for two days ago on May 15. This is available for the public to review. Since you know, this is something that has to be approved by the S.
Good, thank you.
Again, if you have a question, please press star then one.
This concludes our question and answer session. Thank you everyone for joining us. We look forward to seeing you on our next call.
The conference has officially concluded. Thank you for attending today's earnings call. You may now disconnect.
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