Q4 2024 Urgent.ly Inc Earnings Call
Operator: Good afternoon and welcome to Urgently's fourth quarter and full year 2024 conference call. As a reminder, today's call is being recorded, and your participation implies consent to such recording. At this time, all participants are in a listen-only mode.
Good afternoon, and welcome to urgently fourth quarter and full year 2024 conference call.
As a reminder, today's call is being recorded and your participation implies consent to such recording.
At this time all participants are in a listen only mode.
Operator: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
A brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please.
Speaker Change: Our star zero on your telephone keypad.
Jenny Mitchell: With that, I would like to turn the call over to Jenny Mitchell, Vice President of Finance Strategy and Investor Relations. You may proceed. Thank you, Operator.
Speaker Change: With that I would like to turn the call over to Jenny Mitchell Krebs.
Speaker Change: President of finance strategy and Investor Relations you May proceed.
Speaker Change: Yeah.
Speaker Change: Thank you operator, good afternoon, everyone and thank you for joining us for urgently financial result conference call for the fourth quarter and full year ended December 31st 2024 on.
Jenny Mitchell: Good afternoon, everyone, and thank you for joining us for Urgently's Financial Results conference call for the fourth quarter and full year ended December 31st, 2024.
Jenny Mitchell: On the call today, we have Urgently's CEO, Matt Booth, and CFO, Tim Huffmyer. Following Matt and Tim's prepared remarks, we will take your questions.
Matt: On the call today, we have urgently CEO, Matt <unk>.
Tim Hoffmeyer: And CFO Tim Hoffmeyer.
Following that in Tim's prepared remarks, we will take your questions before we begin I'd like to remind you that some of our comments today may contain forward looking statements that are subject to risks uncertainties and assumptions, which could change.
Jenny Mitchell: Before we begin, I'd like to remind you that some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions that could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. Description of these risks, uncertainties, and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent annual report on Form 10-K for the year ended December 31st, 2023, our quarterly reports on Form 10-Q, and other filings and reports that we may file from time to time with the SEC.
Tim Hoffmeyer: Should any of these risks materialize or should our assumptions prove to be incorrect actual company results could differ materially from these forward looking statements description of these risks uncertainties and assumptions and other factors that could affect our financial results is included in our SEC filings, our SEC filings, including our most recent annual report.
On Form 10-K for the year ended December 31st 2023, our quarterly reports on Form 10-Q, and other filings and reports that we may file from time to time with the FCC. Additional information will also be set forth in our annual report on Form 10-K for the year ended December 31 2020.
Jenny Mitchell: Additional information will also be set forth in our annual report on Form 10-K for the year ended December 31st, 2024.
Sure.
Jenny Mitchell: Accept as required by law. We do not undertake any responsibility to update these forward-looking statements.
Tim Hoffmeyer: Except as required by law, we do not undertake any responsibility to update these forward looking statements during.
Jenny Mitchell: During today's call, we will also discuss certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our earnings materials and press release, which are available on our website at investors.gaaredrently.com.
Speaker Change: During today's call. We will also discuss certain non-GAAP financial measures a reconciliation of GAAP to non-GAAP measures is included in our earnings materials and press release, which are available on our website at investors don't get urgently that dot com also a replay of today's call will be posted on website with that I will now turn the call over to him.
Jenny Mitchell: Also, a replay of today's call will be posted on the website.
Matthew Booth: With that, I will now turn the call over to Matt. Thanks, Jenny. Good afternoon, everyone. And thank you for joining us today. I'm pleased with our performance during the fourth quarter, where we delivered revenue of 32 million, which was in line with our expectations. And notably, our fifth consecutive quarter, where we delivered on our revenue guidance commitment. We also continue to make improvements in both non gap operating expense and non gap operating loss. Over the last 24 months, We have moved the company closer to non gap operating breakeven. We've had meaningful success reducing expenses and improving margin.
Matt.
Matt: Thanks, Jenny and good afternoon, everyone and thank you for joining us today.
I am pleased with our performance during the fourth quarter, we delivered revenue of $32 million, which was in line with our expectations and notably our fifth consecutive quarter, where we delivered on our revenue guidance commitment. We also continued to make improvements in both non-GAAP operating expense and non-GAAP operating loss.
Matt: Over the last 24 months.
Matt: We have moved the company closer to non-GAAP operating breakeven, we've had meaningful success, reducing expenses and improving margin I want to mention a few statistics when comparing our December 22 year to date numbers with our December 24 year to date numbers.
Matthew Booth: I want to mention a few statistics when comparing our December 22 year to date numbers with our December 24 year to date numbers. We had a 57% improvement in gross profit from $20.1 million in 22 to $31.6 million in 24. a 29% reduction in non gap operating expenses from 68.8 million and 22 to 48.8 million and 24 and a 65% improvement in non gap operating loss from 48.6 million and 22 to 17.2 million and 24. We are very pleased as we continue with our tech enabled services and other strategic initiatives to improve margin and set the company up for sustainable and profitable growth going forward.
Matt: We had a 57% improvement in gross profit from $20 1 million and 22 to 31.6 million and 24.
Matt: A 29% reduction in non-GAAP operating expenses from $68 8 million and 22 to $48 8 million and 24.
Matt: And Ah, 65% improvement in non-GAAP operating loss from $48 6 million and 22 to $17 2 million and 24.
Matt: We are very pleased as we continue with our tech enabled services and other strategic initiatives to improve margin.
Matt: Set the company up for sustainable and profitable growth going forward.
Matthew Booth: Turning to 2024, at the beginning of 2024, we announced our strategic priorities for the year, which included expanding our B2B incident business through securing renewals, expanding relationships with existing partners, and developing new customer partner opportunities, all while delivering outstanding customer service. Improving operational efficiencies, which included the integration of autonomous driving margin expansion and driving towards non gap operating break even and finally improving our capital structure. I'm excited to provide you with an update on our accomplishments and the meaningful progress we have made in executing against our strategic initiatives to position urgently for sustained profitable growth to capitalize on the near and long term opportunities ahead.
Matt: Turning to 2024 at the beginning of 'twenty, four we announced our strategic priorities for the year, which included expanding our b to B incident business through securing renewals expanding relationships with existing partners and developing new customer partner opportunities.
Matt: All while delivering outstanding customer service.
Matt: Improving operational efficiencies, which included the integration of autonomous driving margin expansion and driving towards non-GAAP operating breakeven and finally, improving our capital structure.
Matt: I'm excited to provide you with an update on our accomplishments and the meaningful progress we have made in executing against our strategic initiatives.
Matt: Physician urgently for sustained profitable growth to capitalize on the near and long term opportunities ahead.
Matthew Booth: First, I will review our efforts to accelerate profitable growth. 2024 was a big renewal year for us. An annual roadside contract is between one and five years in length, the typical length of three years. As a result, one third of our revenue on average is up for renewal each year. However, in 2024, we renewed nearly one half of our run rate revenue with an activity across both OEM and pre-customer. Notable renewals include a two-year renewal with a global automotive OEM known for its focus on safety, quality, and innovation. Under the renewed contract, Urgently continues to power the automotive OEM's warranty-based roadside assistance program, as well as its post-warranty roadside assistance membership plans in the U.S.
First I will review our efforts to accelerate profitable growth 'twenty 'twenty four was a big renewal year for us and annual roadside contract is between one and five years in length. The typical length of three years as a result, one third of our revenue on average is up for renewal each year. However in 2024, we've renewed nearly one.
Matt: Half of our run rate revenue with an activity across both OEM and fleet customers.
Matt: Notable renewals include a two year renewal with a global automotive OEM known for its focus on safety quality and innovation.
Matt: Under the renewed contract originally continues to power the automotive Oems warranty based roadside assistance program as well as its post warranty roadside assistance membership plans in the U S, Canada and Mexico.
Matthew Booth: Canada, and Mexico. a three-year renewal with a customer partner that operates a global automotive fleet management company or urgently provides the fleet management company's roadside assistance program. a two-year renewal with one of the largest worldwide vehicle rental Connected Assistance Platform will continue to run the vehicle rental company's roadside assistance program, enabling exceptional mobility assistance experiences, including knowledgeable support for electric vehicles. We renewed all but one of our contracts that came up for renewal. We previously announced this in January of 2024 and on subsequent earnings each renewal underscores our clients satisfaction and trust in our mobility assistance We believe securing our revenue through renewals sets the foundation for revenue stability, which will help to drive further growth.
Matt: Three year renewal.
Matt: Well the customer partner that operates a global automotive fleet management company. We're urgently provides the fleet management companies roadside assistance program.
Matt: A two year renewal with one of the largest worldwide vehicle rental companies urgently as connected as to whose platform will continue to run the vehicle rental companies roadside assistance program, enabling exceptional mobility assistance experiences, including knowledgeable support for electric vehicles, we renewed all.
Matt: But one of our contracts that came up for renewal. We previously announced this in January of 2024 and on subsequent earnings calls.
Matt: Each renewal underscores our clients' satisfaction and trust in our mobility systems platform, we believe securing our revenue through renewals. That's the foundation for revenue stability, which will help to drive further growth.
Matthew Booth: We also remain focused on building upon our existing customer relationships to expand our product offerings within an account. Expansion activity for 2024 included providing incremental call center support, offering differentiated bands of service through VIP offerings, and supporting our customers as they expanded into new products and vertical markets. One example was a two-year renewal with a global automotive OEM known for its precision engineering and commitment to deliver unparalleled driving experience. The renewed agreement includes the expanded relationship geographically from the U.S. to include the Canadian market.
Matt: We also remain focused on building upon our existing customer relationships to expand our product offerings within an account.
Matt: Expansion activity for 'twenty, 'twenty, four including providing incremental call center support offering differentiated bands of service through VIP offerings, and supporting our customers as they expanded into new products and vertical markets.
Matt: One example was a two year renewal with a global automotive OEM known for its precision engineering and commitment to deliver unparallel driving experience the renewed agreement.
The expanded relationship geographically from the U S to include the Canadian market. In addition to the contract renewals and expanding services with existing customer partners. We are also focused on signing new customers. One. Such example was a new customer partner agreement that represented a significant expansion into a new market with a direct to consumer.
Matthew Booth: In addition to the contract renewals and expanding services with existing customer partners, we are also focused on signing new customers. One such example was a new customer partner agreement that represented a significant expansion into a new market with a direct-to-consumer subscription and insurance aggregator. This customer will launch in 2025. In addition, we recently signed and launched a multi-year customer partner contract with a prominent recreational vehicle lifestyle brand. That serves outdoor enthusiasts across the US and Canada. We signed the contractor in the fourth quarter and launched in late December. We believe our positive momentum with contract renewals, expansions and new customers further validates the strength of our technology and the outstanding level of service we provide to our OEM customer partners and their customers.
Matt: Subscription and insurance aggregator this customer will launch in 2025.
Matt: In addition, we recently signed and launched a multiyear customer partner contract with a prominent recreational vehicle lifestyle brand.
Matt: That serves outdoor enthusiasts across the U S and Canada, we signed the contract during the fourth quarter and launched in late December.
Matt: We believe our positive momentum with contract renewals expansions and new customers further validates the strength of our technology and the outstanding level of service, we provide to our OEM customer partners and their customers.
Matthew Booth: We believe delivering exceptional service, visibility and transparency to our customer partners to be a key differentiating factor for us in the market. We pride ourselves on our outstanding customer service. We are proud to have achieved our customer service scores of 4.5 out of five stars in 2024. And we have consistently maintained the service level.
We believe delivering exceptional service the visibility and transparency to our customer partners to be a key differentiating factor for us in the marketplace, we pride ourselves on our outstanding customer service.
Proud to have achieved our customer service scores of 4.5 out of five stars in 2024, and we have consistently maintained service levels. In addition, our product and technology teams are innovating to positively advance the motorist experience.
Matthew Booth: In addition, our product technology teams are innovating to positively advance the motorist experience. I'd like to highlight some of these key technological investments we've made in the last year. First, we've enhanced our platform logic related to vehicle drop-off location to allow our partners to define and configure drop-off location parameters using a larger set of variables such as vehicle year, dealership, and proximity. On the customer support side, we enhanced our computer telephone integrations with additional intelligent call routing and auto population of customer data in the customer support screens. Both features help us to reduce handle time.
Matt: I'd like to highlight some of these key technological investments we've made in the last year first we've enhanced our platform logic related to vehicle drop off location to allow our partners to define and configure drop off location parameters using a larger set of variables such as vehicle year dealership and proximity.
Matt: On the customer support side, we enhanced our computer telephone integrations with additional intelligent call routing and auto population of customer data and the customer sports screens. Both features help us to reduce handle time.
Matthew Booth: We also improved our dealer tech dispatching logic, which now better enables our customer partner dealerships to set and define their own service area. Finally, we developed AI-driven dynamic pricing technology, which makes it possible to reliably predict and optimize job prices for roadside assistance services, leading to higher quality customer experiences. For this effort, we were recognized this past October with the Auto Tech Breakthrough Award for Overall Transportation Tech of the Year. I couldn't be more pleased with the progress and momentum we have made to drive growth back into the company, fueled by the full year impact of these new customer launches.
We also improved our dealer tech dispatching logic, which now better enables our customer partner dealerships to sat and define their own service areas.
Matt: Finally, we developed AI, driven dynamic pricing technology, which makes it possible to reliably predict and optimize job prices for roadside assistance services, leading to higher quality customer experiences for this effort. We have recognized this past October with the auto Tech breakthrough award for overall transportation Tech of the year.
Matt: Year.
Matt: I couldnt be more pleased with the progress and momentum we have made to drive growth back into the company fuelled by the full year impact of these new customer launches. We believe we are positioning ourselves to continue this momentum in 2025.
Matthew Booth: We believe we are positioning ourselves to continue this momentum in 2025.
Matthew Booth: Our second priority was to drive operational efficiencies across the business towards achieving non-gap operating great I'm proud of the steps forward we took last year to optimize our business and drive margin expansion. First, we took actions to enhance our partner mix by exiting unprofitable contract. In addition, we increased pricing to better align with the value we are delivering. We also advanced our technology platform upgrades to increase visibility and efficiency in the marketplace. hand launched capabilities to further optimize the match of service providers to the service. We've achieved meaningful progress in this area as evidenced by the 160 basis point year-over-year improvement in gross profit margin in 2024 as compared to 23 and the 11.3 point improvement in gross profit margin compared to 2022.
Our second priority was to drive operational efficiencies across the business towards achieving non-GAAP operating breakeven I'm proud.
Matt: The steps forward, we took last year to optimize our business and drive margin expansion.
Matt: First we took actions to enhance our partner mix by exiting unprofitable contracts. In addition, we increased pricing to better align with the value of your delivery. We also advanced our technology platform upgrades to increase visibility of inefficiency in the marketplace and launched capabilities to further optimize the match of service providers to the service.
Matt: We've achieved meaningful progress in this area as evidenced by the 160 basis point year over year improvement in gross profit margin in 2024 as compared to 23, and the 11.3 point improvement in gross profit margin compared to 2022.
Matthew Booth: Controlling operating expenses is also a critical step in navigating the path to achieve non-GAAP operating breaking. In 2024, we finalized the transformation of our customer service operations by optimizing the staff balance between nearshore business process organization. and Ozturk also. We continue to leverage technology and process optimization to our service model through the activities such as streamlining alerts, proactively identifying high risk jobs and enhancing telematics integrations to drive additional refinements in this area. We also consistently look internally at the business to find opportunities to create additional efficiency.
Matt: Controlling operating expenses is also a critical step in navigating the path to achieve non-GAAP operating breakeven in 2024, we finalized the transformation of our customer service operations by optimizing the staff balance between nearshore business process organizations and onshore call centers we.
Matt: We continue to leverage technology.
Matt: And process optimization to our service model through the activities such as streamlining alerts proactively identifying high risk jobs and enhancing telematics integrations to drive additional refinements in this area.
Matt: We also consistently look internally at the business to find opportunities to create additional efficiencies.
Matthew Booth: As an example, in September, we completed the divestiture of the autonomous business unit, the flow as part of our strategic effort to divest non core assets and dedicate our resources to advancing our core business. We also evaluated all areas of the organization to right size teams and best support our current portfolio of customers. To that end, we achieved an 18% year over year improvement and non gap operating loss for 2024. and a 62% year-over-year improvement and non-GAAP operating loss during the fourth quarter. And we are targeting non-GAAP operating break-even in mid-2025, which will be a significant milestone for the company.
Matt: As an example in September we completed the divestiture of the autonomous business unit the flow as part of our strategic effort to divest noncore assets and dedicate our resources to advancing our core business.
We also have value added all areas of the organization to rightsize teams and best support our current portfolio of customers.
To that end we.
Matt: We achieved an 18% year over year improvement in non-GAAP operating loss for 2024.
Matt: And a 62% year over year improvement in non-GAAP operating loss during the fourth quarter.
And we are targeting non-GAAP operating breakeven in mid 2025, which will be a significant milestone for the company.
Matthew Booth: Our third priority was to improve our capital In February of 2025, we secured a facility for up to $20 million with MidCap Financial, which Tim will outline in greater detail in his comments. We appreciate the support of Highbridge, Onyx, and Whitebox Advisors as they extend their partnership . We believe their continued support is indicative of the confidence that exists among leading financial, automotive, mobility and strategic investors in the strong business that we've built. We expect these capital structure improvements will allow us to strengthen our commitment to our customer bar. Service Providers and Customers as we continue to transform the market with our market-leading digital platforms, products, and solutions.
Matt: Our third priority was to improve our capital structure in February of 2025, we secured a facility for up to $20 million with Midcap financial which Tim will outline in greater detail in his comments. We appreciate the support of Highbridge Onyx and White box advisors as they extend their partnership with us.
Yes.
Matt: We believe there are continued support is indicative of the confidence that exists among leading financial automotive mobility and strategic investors and a strong business that we've built.
Matt: We expect these capital structure improvements will allow us to strengthen our commitment.
Matt: Two our customer partners.
Matt: Providers and customers as we continue to transform the market with our market, leading digital platforms products and solutions.
Matthew Booth: In closing, I am very proud of the contribution across our team for what we have accomplished in the past year in securing contract renewals, launching new customers, optimizing cost, and driving efficiencies into the business, innovating our technology to drive exceptional customer experiences for both our customer partners and end users, and enhancing our capital structure.
Matt: In closing I am very proud of the contribution across our team from what we have accomplished in the past year and securing contract renewals launching new customers optimizing cost and driving efficiencies into the business innovating Margo technology to drive exceptional customer experiences for both our <unk>.
Matt: Customer partners and end users and enhancing our capital structure.
Matthew Booth: As we look ahead to 2025, our core priorities remain return to growth, expanding our existing B2B incident business through securing renewals, expanding relationships with existing partners, and developing new customer partner opportunities. Achieving non gap operating breakeven through our operational improvements, margin expansion and managed growth. continuing to transform this market with product innovations that drive differentiation, margin improvements and exceptional experiences for our customer partners and drivers.
Matt: As we look ahead to 2025 of our core our core priorities remain.
Matt: Returned to growth.
Matt: Expanding our existing b to B incident business through securing renewals expanding relationships with existing partners and developing new customer partner opportunities.
Matt: <unk> non-GAAP operating breakeven through our operational improvements margin expansion and manage growth.
Matt: Continuing to transform this market with product innovations that drive differentiation.
Speaker Change: Margin improvements and exceptional experiences for our customer partners and drivers. Thank you for your time and continued support I'll now turn the call over to Tim to discuss our financial results.
Matthew Booth: Thank you for your time and continued support.
Timothy Huffmyer: I'll now turn the call over to Tim to discuss our financial Thank you, Matt and good afternoon everyone. Today I will discuss our fourth quarter and full year 2024 results. Before I do that though, let's recap the recent updates to our capital structure. We are pleased to have completed our new credit agreement for an asset-based revolving credit. for up to $20 million with mid-cap financial. Which was signed on February 26th and was used to repay existing indebtedness to our first lien lender and will support the business as we continue to transform the legacy roadside assistance market.
Speaker Change: Thank you, Matt and good afternoon, everyone today, I will discuss our fourth quarter and full year 'twenty 'twenty four results before I do that though let's recap the recent updates to our capital structure.
Speaker Change: We are pleased to have completed our new credit agreement for an asset based revolving credit facility for up to $20 million with Midcap financial which was signed on February 26, and was used to repay existing indebtedness to our first lien lender and will support the business as we continue.
Speaker Change: To transform the legacy roadside assistance market.
Timothy Huffmyer: The facility also provides for an additional $5 million of borrowing as the accounts receivable borrowing base increases. Also, on February 26, we extended our credit agreement with Highbridge Capital, for 17 months through July 31st, 2026. Hybrid agreed to delay the repayment of certain back end fees under the company's second lien agreement in exchange for the issuance of approximately 1.4 million shares of common stock and an extension of its second lien term loan until July 31st, 2026. Also part of the extension includes either quarterly PIC interest or a quarterly cash interest pay. All based on certain financial measurements at the end of each quarter.
Speaker Change: The facility also provides for an additional 5 million of borrowing as the accounts receivable borrowing base increases.
Speaker Change: Also on February 26, we extended our credit agreement with Highbridge capital management for 17 months through July 31st 2026.
Speaker Change: Highbridge agreed to delay the repayment of certain backend fees under the company's second lien agreement in exchange for the issuance of approximately 1.4 million shares of common stock and an extension of its second lien term loan until July 31st 2026.
Speaker Change: Also part of the extension includes either quarterly pick interest or a quarterly cash interest payments all based on certain financial measurements at the end of each quarter.
Timothy Huffmyer: Overall, we appreciate the lender's support as we work through the new debt facility and term.
Speaker Change: Overall, we appreciate the lender support as we work through the new debt facility and terms.
Timothy Huffmyer: Now let's review the financial For the fourth quarter, revenues were $32 million, which was within our guidance range of $30 to $33 million, and a decline of 29% or $13 million from the same quarter last year. year-over-year revenue decline is primarily related to the non-renewal of one auto manufacturer customer partner. For the full year revenues were 142.9 million down 23% or 41.7 million from the same period last year. The year-over-year revenue decline was in line with our expectations and was primarily driven by the reduction in dispatch volume from the customer partner non-renewal that we had previously announced in January of 2024.
Speaker Change: Now, let's review the financial results.
Speaker Change: For the fourth quarter revenues were $32 million, which was within our guidance range of $30 million to $33 million and a decline of 29% or $13 million from the same quarter last year.
Speaker Change: The year over year revenue decline is primarily related to the non renewal of one auto manufacturer customer partner.
Speaker Change: For the full year revenues were $142 9 million down, 23% or 41.7 million from the same period last year the.
Speaker Change: The year over year revenue decline was in line with our expectations and was primarily driven by the reduction in dispatch volume from the customer partner non renewal that we had previously announced in January of 'twenty 'twenty four.
Timothy Huffmyer: Our decision to move away from less profitable revenue and lower volumes across several existing accounts. This was partially offset by account growth across several other existing accounts and the launch of a top five global OEM customer partner earlier in the year. For the fourth quarter, gross profit was $7.1 million, down $3.1 million compared to the same period last year. For the full year, gross profit was $31.6 million. Down 6.3 million compared to the previous. The gross profit decline correlated with the revenue reductions previously made. Gross margin for the fourth quarter was 22% compared to 23% for the same period last year.
Speaker Change: Our decision to move away from less profitable revenue and lower volumes across several existing accounts.
Speaker Change: This was partially offset by account growth across several other existing accounts and the launch of a top five global OEM customer partner earlier in the year.
Speaker Change: For the fourth quarter gross profit was $7 1 million down $3 1 million compared to the same period last year.
Speaker Change: For the full year gross profit was 31.6 million.
Speaker Change: Down $6 3 million compared to the previous year.
Speaker Change: The gross profit decline correlated with the revenue reductions previously mentioned.
Speaker Change: Gross margin for the fourth quarter was 22% compared to 23% for the same period last year gross margin for the full year was 22% compared to 21% for the previous year.
Timothy Huffmyer: Gross margin for the full year was 22% compared to 21% for the previous year. The increase in gross margin is primarily related to the mix of service dispatches and our continued technology optimizations, allowing us to better manage our service provider.
Speaker Change: The increase in gross margin is primarily related to the mix of service dispatches and our continued technology product optimizations, allowing us to better manage our service provider costs.
Timothy Huffmyer: Now, let's move on to operating. Reducing operating expenses has been a primary focus area for us this past year as we position the company to achieve non-gap operating breakeven. Operating expense for the fourth quarter was $11.7 million, a decrease of $22.3 million, or 65% from the same period last year. Operating expense for the year was $58.8 million, a decrease of $25.2 million or 30% from the previous year. As previously discussed, most of our operating expenses are headcount. So on this call, we will focus on this. At the end of the fourth quarter of 2024, we had 182 total employees, a reduction of 167 employees, or 48% when compared to the end of the fourth quarter of 23.
Speaker Change: Now, let's move on to operating expenses.
Reducing operating expenses has been a primary focus area for us this past year as we position the company to achieve non-GAAP operating breakeven.
Speaker Change: Operating expense for the fourth quarter was 11.7 million a decrease of $22 3 million or 65% from the same period last year.
Operating expense for the year was $58 8 million, a decrease of $25 2 million or 30% from the previous year.
Speaker Change: As previously discussed most of our operating expenses are head count related.
Speaker Change: On this call we will focus on this initially.
At the end of the fourth quarter of 2024, we had 182 total employees a reduction of 167 employees or 48% when compared to the end of the fourth quarter of 'twenty three.
Timothy Huffmyer: just after we completed the merger with. This number also includes the divestiture of 64 employees, which was in connection with the flow transaction as discussed last Additional operating expense improvements were made across the organization. Most notably, within our operations and support line item, and as part of the business and operational model changes, we started in 2023 and continued in 2024 migrating a portion of the customer support resources from the United States to business process organizations located in Central and South America. In addition, we implemented technological improvements and optimized business process. that resulted in the need for less resources.
Speaker Change: Just after we completed the merger with autonomy.
This number also includes the divestiture of 64 employees, which was in connection with the flow transaction as discussed last quarter.
Speaker Change: Additional operating expense improvements were made across the organization.
Speaker Change: Most notably within our operations and support line item and as part of the business and operational model changes. We started in 2023 and continued in 2020 for migrating a portion of the customer support resources from the United States to business process organizations located in central and South America.
Speaker Change: In addition, we implemented technological improvements and optimize business processes.
That resulted in the need for less resources.
Timothy Huffmyer: All of which contributed to a 3.1 million or 55% decrease in a 10.9 million or 45% decrease in operations and support expenses for the fourth quarter and full year of 2024 respectively. These technological improvements and optimization activities reduced our reliance on customer support representatives. who are employed through our BPO partners. At the end of the fourth quarter of 2024, we had 189 full-time customer support representatives compared to 404 at the end of 2023, which is a reduction of 215 customer support representatives, or 53%. Within our general and administrative expenses during the fourth quarter, we recorded a one-time business tax expense of approximately $800,000 related to a multi-year audit.
All of which contributed to a 3.1 million or 55% decrease and a 10.9 million or 45% decrease in operations and support expenses for the fourth quarter and full year of 'twenty 'twenty four respectively.
Speaker Change: These technological improvements and optimization activities reduced our reliance on customer support representatives.
Speaker Change: Who are employed through our B P O partners.
Speaker Change: At the end of the fourth quarter of 'twenty 'twenty four we had 189 fulltime customer support representatives compared to 404 at the end of 2023 which is a reduction of 215 customer support representatives or 53%.
Speaker Change: Within our general and administrative expenses during the fourth quarter, we recorded a one time business tax expense of approximately 800000 related to a multiyear audit.
Timothy Huffmyer: We did not anticipate this tax expense at the time when we previously provided our outlook on our prior earnings conference call. Also recorded in the fourth quarter was 500,000 related to the write off of contract fulfillment costs for software integration that had been previously capitalized. All associated with the termination of the previously announced top five global OEM contract in the fourth quarter.
Speaker Change: We did not anticipate this tax expense at the time when we previously provided our outlook on our prior earnings conference call.
Speaker Change: Also recorded in the fourth quarter was 500000 related to the write off of contract fulfillment costs for software integration that had been previously capitalized all associated with the termination of the previously announced top five global OEM contract in the fourth quarter.
Timothy Huffmyer: We also review non-GAAP operating expenses, which is defined as GAAP operating expenses, plus depreciation and amortization expense, stock-based compensation expense, non-recurring transaction costs, and restructuring. Non-GAAP operating expenses for the fourth quarter was $10.1 million, an improvement of 44% from $18 million in the prior year period. Non-GAAP operating expenses for the full year 2024 was $48.8 million, an improvement of 17% from $58.8 million in the prior year. This non-GAAP operating expense reduction is in line with our expectations through 2024 and more clearly shows the results of the operational efficiencies and leverage we've achieved along with integration efforts with the Autonomo merger.
Speaker Change: We also review non-GAAP operating expenses, which is defined as GAAP operating expenses, plus depreciation and amortization expense stock based compensation expense nonrecurring transaction costs and restructuring costs.
Speaker Change: non-GAAP operating expenses for the fourth quarter was $10 1 million an improvement of 44% from 18 million in the prior year period.
Speaker Change: non-GAAP operating expenses for the full year 2024 was 48.8 million an improvement of 17% from $58 8 million in the prior year.
Speaker Change: This non-GAAP operating expense reduction is in line with our expectations through 'twenty 'twenty four and more clearly shows the results of the operational efficiencies and leverage we've achieved along with integration efforts with the autonomy merger.
Timothy Huffmyer: Overall, we remain focused on optimizing our operating structure to drive further improvements in this. Gap operating loss for the fourth quarter was $4.6 million, a decrease of $19.2 million, or 81% from the same period last year. Gap operating loss for the year was $27.2 million, a reduction of $18.9 million, or 41% from the previous year. We also review non-GAAP operating loss, which is defined as GAAP operating loss plus depreciation amortization expense. Stock Based Compensation Expense, Nonrecurring Transaction Costs, and Restructuring. Non-GAAP operating loss for the fourth quarter was $3 million, an improvement of 62% compared to $7.9 million in the prior year.
Speaker Change: Overall, we remain focused on optimizing our operating structure to drive further improvements in this metric.
GAAP operating loss for the fourth quarter was $4 6 million a decrease of $19 2 million or 81% from the same period last year GAAP operating loss for the year was $27 2 million a reduction of $18 9 million or 41% from the previous year.
We also review non-GAAP operating loss, which is defined as GAAP operating loss plus depreciation amortization expense.
Speaker Change: Stock based compensation expense nonrecurring transaction costs and restructuring costs non.
Speaker Change: non-GAAP operating loss for the fourth quarter was $3 million, an improvement of 62% compared to $7 9 million in the prior year.
Timothy Huffmyer: This non-gap operating loss was higher than expected. and discussed during our previous earnings conference. primarily related to the previously mentioned business tax expense recorded in general and administrative. Additionally, our non-GAAP operating loss for the full year of 2024 was lower when compared to the non-GAAP operating loss in the previous year. Non-Gap Operating Loss for 2024 was $17.2 million, a reduction of $3.8 million or 18% from the previous year. During the fourth quarter and full year, we capitalized approximately 1.3 million and 5.9 million respectively in software, mostly to make enhancement to our platform by adding features and functionalities, which benefit all our customer partners.
Speaker Change: This non-GAAP operating loss was higher than expected.
Speaker Change: And discussed during our previous earnings conference call primarily related to the previously mentioned business tax expense recorded in general and administrative.
Speaker Change: Additionally, our non-GAAP operating loss for the full year of 2024 was lower when compared to the non-GAAP operating loss in the previous year non.
Speaker Change: non-GAAP operating loss for 'twenty 'twenty, four was $17 2 million a reduction of $3 8 billion or 18% from the previous year.
Speaker Change: During the fourth quarter and full year, we capitalized approximately 1.3 million and 5.9 million, respectively and software mostly to make enhancements to our platform by adding features and functionalities, which benefit all our customer partners. We expect this practice to continue in 2025.
Timothy Huffmyer: We expect this practice to continue in 2025.
Timothy Huffmyer: As of December 31st, 2024, we had 13.5 million common stock shares outstanding, which does not reflect the reverse stock split that our stockholders voted on earlier today. The reverse stock split is intended to enable us to regain compliance with the NASDAQ listing requirements. The final ratio and timing of the reverse stock split will be determined at the discretion of our board of directors. We intend to affect the reverse stock split on March 17th, 2025, by filing an amended and restated certificate of incorporation with the Delaware Secretary of State.
Speaker Change: As of December 31st 2024, we had 13.5 million common stock shares outstanding which does not reflect the reverse stock split that our stockholders voted on earlier today.
Speaker Change: The reverse stock split is intended to enable us to regain compliance with the NASDAQ listing requirements. The final ratio and timing of the reverse stock split will be determined at the discretion of our board of directors, we intend to effect the reverse stock split on March 17th 2025 by filing an amended and restated certificate of incorporation.
Speaker Change: Corporation with the Delaware Secretary of state.
Timothy Huffmyer: Turning now to our For the first quarter of 2025, we expect revenue to be between 30 to 33 million and our non-gap operating loss to be less than 1 million.
Speaker Change: Turning now to our outlook.
Speaker Change: For the first quarter of 2025, we expect revenue to be between $30 million to $33 million.
Speaker Change: And our non-GAAP operating loss to be less than $1 million.
Timothy Huffmyer: Additionally, we are targeting non gap operating break even in mid 2025. Our expected common stock shares outstanding at the end of the first quarter is $14.9 million. which does not reflect the reverse stock split previously mentioned.
Speaker Change: Additionally, we are targeting non-GAAP operating breakeven in mid 2025.
Our expected common stock shares outstanding at the end of the first quarter is $14 9 million.
Speaker Change: Which does not reflect the reverse stock split previously mentioned.
Operator: With that, we are now happy to open the call for questions. Operator, please open the line for Q&A. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
Speaker Change: With that we are now happy to open the call for questions. Operator, Please open the line for Q&A.
Speaker Change: We will now begin the question and answer session.
Speaker Change: You ask a question you May press Star then one on your Touchtone phone.
Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Operator: At this time, we will pause momentarily to assemble our roster.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Yeah.
Jim McElry: The first question today comes from Jim McElry with Chardin Capital Markets, please go ahead. Yes, thank you and good evening. I was hoping we could focus a little bit on, hey Tim, I was hoping we could focus a little bit on the revenue comments that you guys made. First you talked about The renewals renewing half of the run rate revenue. Can you characterize the pricing of those renewals? That is, they were at the same price or up or down? Yeah. I'll go and then Matt, you can add if you need to. Generally speaking, pricing's been holding pretty well.
Speaker Change: The first question today comes from Jim The Gallery with short and capital market. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Yeah, Thank you and good evening.
Speaker Change: I was hoping we could focus a little bit.
Jim: Hey, Jim.
Speaker Change: I was hoping we could focus a little bit on the revenue comments that you guys made.
Jim: First you talked about.
Jim: The renewals renewing half on a run rate revenue can you characterize.
Jim: Icing of those renewals that is they were at the.
Jim: At the same price or up or down.
Jim: Yeah.
Speaker Change: I'll go and then Matt you can add if you need to generally speaking pricings been holding up pretty well a couple years ago. We did include some C. P. I type price escalators in our contracts. So we do have the opportunity to revalue and reprice arc.
Timothy Huffmyer: A couple years ago, we did include some CPI type price escalators in our contracts, so we do have the opportunity to revalue and reprice our contracts as needed. So we feel pretty good about that pricing that we're not seeing. With those renewals, we weren't necessarily giving anything away and felt strong with the partnership and the value we were delivering that we could hold pricing pretty well. Yeah, I'll just, again, I'll just mention one other piece is a lot of the contracts that we're seeing these days are super starting to see segmentation in them. So might be the standard rate as Tim said, really is unchanged beyond the economic escalators that we have in the contracts.
Jim: Our contracts are as needed.
So we feel pretty good about that pricing that were not see you know with those renewals, we'd we weren't necessarily giving anything away and and felt strong with the partnership and the value we were delivering that we could hold pricing pretty well.
Jim: Yes.
Jim: Yeah, I'll just mention one other pieces a lot of the contracts that we're seeing these days are starting to see segmentation in them. So might be the standard rate is 10 sad release unchanged beyond the economic escalators that we have in the contracts.
Timothy Huffmyer: there are a handful that are coming in that have new programs like VIP programs in them that are typically priced a little bit higher. As we've mentioned in the script, we're seeing more and more of that across the portfolio where people, customer partners want differentiated programs for their drivers. We expect that trend to continue, if not pick up through 25. Right. Okay, that's helpful. And it's as regarding the expansion and the new customer activity, can you Help me understand how that gets layered in over the course of this year. Yeah, we go ahead. I was just going to add, I'm referring to, is it back-end loaded, or do we get a big jump, let's say in Q2, and then it flattens out for the rest of the year?
Jim: There are a handful that are coming in to have new programs like VIP programs in them that are typically priced a little bit higher as we mentioned in the script, we're seeing more and more of that across the portfolio where people customer partners want differentiated programs for their drivers.
Jim: We expect that trend to continue without pick up through 25.
Jim: Right. Okay. That's helpful and it's as regarding the expansion and the new customer activity.
Jim: Activity can you.
Jim: Help me understand how that gets layered in over the course of this year.
Jim: Yeah.
Jim: Uh huh.
Jim: Go ahead.
Jim: I was just I was just going to add I'm, referring to.
Jim: Is it back end loaded or do we do we get a big jumps, let's say in Q2, and then it flattens out for the rest of the year. So that's what I mean by by how it's layered in.
Matthew Booth: That's what I mean by how it's layered in. Yep, yep. Good question. So, we did announce a new customer partner in Matt's prepared comments. We actually launched that real late in the fourth quarter. So, that had very little impact on our results here that we've announced, but it is in there and it will be in the first quarter. And in this particular notion, there was a slight ramp. So, that's kind of ramping through the first quarter of 2025. And we'd expect that to be fully ramped here early to Q mostly. Matt, you can correct me if I'm wrong on that, but I think that's our expectations.
Yep Yep. Good question. So we did we did announce a new customer partner and are in Matt's prepared comments, we actually launched that are real late in the fourth quarter. So that had very little impact on the on the on our results here that we've announced but it is it is in.
Jim: In there and it will be in the first quarter and in this particular notion there was a there was a slight ramp. So that's that's kind of ramping through the first quarter of 2025, and we'd expect that to you know to be fully ramped here. It early.
Jim: Early to Q, mostly I'm, Matt you can correct me, if I'm wrong on that but I think that's our expectations now that's correct.
Timothy Huffmyer: No, that's correct. Jim, sometimes with our contracts, they just turn on and it's it's 100% on day one. And sometimes there's a there's a slow ramp for transition purposes. We got to work out technology kinks, sometimes things like that. So there's, there's different reasonings. And every partner is a little bit different how they handle it. This one was a gradual ramp here through the quarter. Tim, the guidance for Q1 is The guidance for Q1 is flattish with Q4. Is there a seasonality issue here, or is there... You know, just the way the contracts are getting layered in.
Jim: Jim sometimes.
Jim: With our contracts, they just turn on and and it's it's 100% on day, one and sometimes there's a there's a slow ramp for transition purposes. We've got to work out technology Kinks, sometimes things like that so there's there's different reasonings and every partners a little bit different how they handle it.
Jim: This one was a gradual ramp here through the quarter.
Jim: Got it okay.
Jim: Jim the guidance for Q1 is.
Speaker Change: But the guidance for Q1, that's flattish with with Q4 is there that's right now the issue here or is there.
Speaker Change: Yeah, just the way the contracts are getting layered in can you help me understand that that progression yep.
Timothy Huffmyer: Can you help me understand that that progression? Yep. Yeah, so the main change there, Jim, and you'd have to go back to our last script, but we did talk about losing, and I mentioned it in my preparatory remarks, but we did talk about a contract that got canceled, and that got canceled in late fourth quarter. We had announced it in our November remarks, but that was a larger contract than the one that we that we just talked about, so there's a little bit of a difference there in the sense that I lost one that was larger, and I'm adding one back that's not quite as big, although my absolute number may be the same, but that's the primary reason.
Speaker Change: Yeah. So the the the main.
Speaker Change: The main change there Jim and in this you would have to go back to our last script, but we did talk about losing and I mentioned it in my prepared remarks, but we we did talk about a contract that got canceled and that got canceled in late fourth quarter, We had announced it in our AR and our and our November remarks, but that was a.
Speaker Change: Larger contracted and the one that we added that we just talked about so there's a there's a little bit of a difference there in the sense that I lost one that was larger than them, adding one back that's not quite as big Although my my.
Speaker Change: Although my absolute number may be the same but that that's the primary reason, we have a little bit of seasonality through the holidays and with with weather events and things like that but.
Matthew Booth: We have a little bit of seasonality through the holidays and with weather events and things like that, but all in all, that seasonality isn't really showing itself a whole lot in the first quarter. It's mostly the contract that left us that basically strategically decided to go in a different direction in the fourth quarter. Right, right. Okay. Thank you for that. Um, and one more question, if you don't mind, please. So you talked about moving customer service. to different locations and reorganizing it. And I'm just curious, How you tested that to make sure that it's still going to be able to provide the same level of service that and increased churn, let's say, 18 months or 24 months down the road.
Speaker Change: But all in all that that seasonality isn't isn't really shown itself a whole lot in the first quarter of.
It's mostly the the the contract.
Speaker Change: That left us are that basically strategically decided to go in a different direction are in the fourth quarter.
Speaker Change: Right right. Okay. Thank you for that and one more question if you don't mind.
Please.
Speaker Change: So you talked about moving customer service.
Speaker Change: To different locations, and Andrew and re or organizing it and.
Speaker Change: And I'm just just curious.
How you tested that to make sure that it's still going to be able to provide the same level of service that you.
Speaker Change: You're paying customers want.
Speaker Change: And what risk that might pose for a customer.
Speaker Change: Customer dissatisfaction and.
Speaker Change: And increased churn, let's say 18 months or 24 months down the road.
Matthew Booth: I'll take that. So Jim, we started that process, geez, 18 months ago, two years ago, Tim, it's been it's been quite a while since we did it. So most of the outsourcing and kind of balancing across domestic and nearshore operations has been in place for quite a while. Before we launched any of them, just to give you some background, we did some we did thorough testing to make sure the quality was where it needs to be. And we did note that our customer service scores have been 4.5 out of 5 stars and has been consistent across that time period.
Speaker Change: I'll take that.
Speaker Change: So can we started that process PS 18 months ago, two years ago, Tim It's been it's been quite a while to get it. So most of the outsourcing and kind of balancing across domestic and near shore operations has been in place for quite a while.
Before we launched any of them just to give you. Some background. We did some we did thorough testing to make sure the quality was where it needs to be.
Speaker Change: And we did note that our customer service scores have been four five out of five stars and has been consistent across that time period.
Matthew Booth: There's some places where, you know, new programs that we're launching, an example of VIP or other kind of customer-centric programs around the drivers that we decided to move some back onshore in strategic places, but we haven't seen a degradation of quality. We're very strategic about where we use near shore call centers. As an example, it may not be on the driver's side, it may be on the service provider's side or on the billing side or on the network side. As an example, we can get more leverage, so it's... You know, the impact has already been felt and it's already been worked through the system, but we don't believe we have a churn risk because of that.
Speaker Change: There are some places where new programs that we're launching an example, VIP or other kind of customer centric.
Speaker Change: Programs around the drivers that we decided to move them.
Back onshore.
Speaker Change: In strategic places, but we haven't seen a degradation of quality, we're very strategic about where we use.
Speaker Change: Nearshore call centers as an example, it may not be on the driver side. It may be on the service provider side or on the billing side or on the network side. As an example, we can get more leverage so it's.
You know the impact has already been felt and it's already been worked through the system and we don't believe we have a current risk because of that.
Jim McElry: Okay, very good. I appreciate your patience with me. And thanks a lot. We'll, we'll talk later. Thank you, Jim.
Okay very good.
Speaker Change: Appreciate your patience with me and thanks a lot.
Speaker Change: We'll talk later.
Jim: Thanks, Jim.
Operator: This concludes our question and answer session.
Jim: This concludes our question and answer session I would like to turn the conference back over to Matt for any closing remarks.
Matthew Booth: I would like to turn the conference back over to Matt Booth for any closing remarks. Great. In closing, We're very proud of the significant progress we've made to position the company for profitable growth, and we look forward to providing everyone with further updates on our progress on future calls.
Speaker Change: Great and clothing.
Speaker Change: We're very proud of the significant progress we've made to position the company for profitable growth and we look forward to providing everyone with further updates on our progress on future calls if you'd like to meet with management. Please reach out to us at Investor Relations have got urgently dot com, we're more than happy to schedule a call. Thank you again for your interest and urgently and for joining the call.
Matthew Booth: If you'd like to meet with management, please reach out to us at InvestorRelations at GetUrgently.com. We're more than happy to schedule a call. Thank you again for your interest in Urgently and for joining the call today.
Speaker Change: Today.
Operator: The conference is now concluded. Thank you for attending today's presentation.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: You may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].