micromobility.com Inc. Q1 FY2022 Earnings Call

Thank you, Chris. Thank you for standing by and welcome to the Helbiz First 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 you to your host for today's program, Gary Dvorchak, Managing Director with The Blueshirt Group. Mr. Dvorchak, please go ahead.

Thank you, Operator, and hello, everyone. Welcome to Helbiz's first quarter 2022 results conference call. With us today are Founder and Chief Executive Officer, Salvatore Palella; and Chief Financial Officer, Giulio Profumo. We issued our financial results press release today after the market close. It's available via Newswires and on our website at investors.helbiz.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 in this conference call 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. Helbiz can give no assurance of these statements proving to be correct. We have no obligation to update these statements. We will also discuss certain forward-looking non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. We urge you to review the discussion of our non-GAAP financial measures and the risks associated with our business, as described in the safe harbor provision and filings with the SEC. I will now turn the call over to Salvatore to begin. Salvatore?

Thank you, Gary, and good day everyone. Thank you for joining today's call to review our business for four months and financial results for the first quarter of 2022. Once again, growth was substantial; revenue tripled with both mobility and media contributions. We continue to invest to grow our business. To fuel growth, we essentially secured another $10 million of funding. In mobility, we won a license in Miami-Dade County. We're the first of any company to do so, and we are already operating there now. Across the U.S., Europe, and Asia Pacific, we are currently in discussions to bring our mobility service to new communities. License applications in several cities are in the final stage. We are proud of the partnerships we build with local governments and how our investment in our technology enables us to move quickly. We can satisfy specific requests from the city and at the same time, keep licenses while competitors lose theirs. Our agility enables us to regularly outmaneuver and beat our competitors for licenses. In addition to organic growth, we are exploring other ways to quickly grow our fleet and citizen service. At the moment, we are negotiating an M&A transaction with a potential partner also operating in the mobility sector, which could significantly increase our footprint and revenue. Because we're publicly traded, we can pursue opportunities like these using stock, which is often a better option than cash. During the quarter, we made strong progress in building our partner resources. Most importantly, our deal with Google Maps: in cities where we operate, Helbiz e-scooters will now appear as a transportation option. With a couple of steps, Google Maps users can find the Helbiz scooter and start their ride. Similarly, we have a deal with another platform so their users can see Helbiz as a commuting option. These partnerships introduce us to a wide group of users and help present us as an alternative to other modes of transportation, such as ride-share, which is solid progress toward our goal of fully integrating our sales into the way people commute through their city. As warmer weather comes, people are returning to normal lives of commuting to the office and seeing their friends. Because of this, we expect our services to become even more vital. That's despite the rising gas prices and other difficulties presented by inflation which should benefit our business. Recent conditions show the need for our vibrant micro-mobility sector and the growth potential that is present to us. To take advantage of this, we are now delivering new vehicles in many of our operating cities. The new vehicles enable us to maximize our licensed cars and serve larger populations. Finally, in media, we strengthened our partnership with Amazon Prime Video. In Italy, Helbiz Live will now be a subscription option in the channel section of Prime Video. We also added MLB, Major League Baseball, to our lineup, which brings baseball to Italy. Now, let me turn the call over to our CFO, Giulio Profumo, to discuss our financial performance for the first quarter.

Thank you, Salvatore. Our detailed financials can be found in our earnings release and 10-Q filing, so we will spend our time discussing the drivers of financial performance. Unless I note otherwise, all figures are for the first quarter of 2022 and all comparisons are with the first quarter of 2021. We started the year on a solid note with good performance across multiple operating metrics. Revenue more than tripled due to growth in Mobility and the contribution from the Media business. Mobility growth was multifaceted and generated 48% of total revenue. We continued the expansion into new cities in the U.S. and in Italy, growing our teams in every city and providing enhanced services. Operating metrics showed solid performance, with quarterly active platform users up 66%, and total trips up 58%. Pay-per-ride still dominates revenue, but unlimited subscriptions grew by 76%. Unlimited subscriptions are popular among customers who ride frequently and value our other services, such as food delivery and live streaming. Our marketing team is working hard to promote unlimited subscriptions because it represents a good value bundle for customers. Media has quickly become an engine of growth for us, making up the other half of our revenue for the quarter. Most media revenue again came from the commercialization of media rights, while Helbiz Live subscriptions accounted for nearly 20% of our revenue. We're building live subscription momentum through the unlimited subscription offering. Going down the P&L, cost of revenue was mostly media-related. Operating expenses reflect our commitment to invest for growth. The doubling of operating expenses was primarily attributable to the growth of the business. We hired more talent and spent more on marketing. We're also now incurring the costs of being a public company. Please note that we incurred $1.3 million in non-cash stock-based compensation expenses, which accounted for almost 6% of the total operating expenses. Our growth goals are aggressive, so naturally, we are focused on maintaining a healthy level of funding. In April, we secured another $10 million in funding through two convertible notes. With increased liquidity, we remain confident in 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. I want to update you on the financial lease agreement we signed in June 2021, a 12-month lease with a European financial institution for approximately 3,000 e-scooters. This agreement became effective on March 1, 2022, following the delivery of the vehicles to our warehouse. We now pay a monthly leasing fee for these additional vehicles in our fleet. Looking ahead, we see demand recovering to pre-pandemic levels. To fulfill this rising demand, we're taking vehicle deliveries now in many cities. We believe we're well-positioned to capitalize on the promise of the industry as the year progresses, with increasing adoption of our environmentally friendly transportation alternatives. We now expect 2022 revenue to more than double compared to last year. This improved outlook reflects growing ride utilization and city expansion. Now, let me turn the call back to Salvatore for closing remarks.

Thank you, Giulio. We are delighted to see solid revenue growth in our mobility business, and our unlimited subscription model is gaining traction. Our business is balanced and diversified across several services that make life more convenient and environmentally friendly for our customers. Based on the strong start of the year and the growing connection across all our lines of business, we are excited to increase our revenue expansion forecast for 2022. This concludes today's conference call. We are open to answer your questions and would like to communicate with you. So don't hesitate to send us any questions. Thank you for spending time with us today. You may now disconnect.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.