Earnings Call Transcript - MCOM Q3 2021

Operator, Operator

Thank you for standing by, and welcome to the Helbiz Third Quarter 2021 Earnings Conference Call. Currently, all participants are in listen-only mode. As a reminder, today's program may be recorded. I'd now like to introduce your host for today's program, Gary Dvorchak with the Blueshirt Group. Please go ahead, sir.

Gary Dvorchak, Host

Thank you. Hello, everyone, and welcome to Helbiz Third Quarter 2021 Results Conference Call. With us today are Founder and Chief Executive Officer, Salvatore Palella; and Chief Financial Officer, Giulio Profumo, who will review the operating and financial highlights. We issued our financial results press release today after the market close. It's available via Newswire and on our website at investors.helbiz.com. A replay of the conference call will be available later today on the Investor Relations page of our website. Please note that our press release and this conference call 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 that these statements will prove 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 that are described in the safe harbor provision for forward-looking statements in our filings with the SEC. I will now turn the call over to Salvatore to begin. Salvatore?

Salvatore Palella, CEO

Thank you, Gary, for the call. Thank you. Thank you, everyone, for being on this call. I'm really excited and happy to share with you our first-quarter results. I think this is a great opportunity to share some achievements and to ensure that you all understand what the company is focusing on for the next quarter. We are pleased to share our Q3 results for the first time as a publicly traded company. Our operating and financial results demonstrated the early traction we are experiencing. We added more cities in both the U.S. and Europe, growing our user base and trips substantially. Mobility is our main business, and we are delighted to share the opening of more cities and a substantial order we placed a couple of weeks ago for around 25,000 vehicles, which will be ready to be on the street by Q1. That means the company was able to raise capital of around $60 million, including the IPO, and to not have issues regarding the supply chain. This means that our scooters, bikes, and also part of the moped fleet will be on the road by the beginning of next year. This will substantially increase our revenue and will be very important for opening new cities, especially in the United States, where we have decided to invest more and open as many cities as we can. Our team is continuously working on opening new cities. We are pleased to share that in the last couple of months, we have opened in California. We also plan to increase our city presence, not only in areas where we are limited by the weather but also in states like Florida and California, where weather is not an issue for our business. Helbiz is not only about mobility. As you guys know, Helbiz has grown to become a lifestyle brand, and we decided to enter two different businesses this year. One is food delivery through our Ghost kitchen, the largest ghost kitchen in Europe. We are excited to include food delivery for all our users and also free for our Helbiz Unlimited users. We'll come back to this point. Our kitchen will now also open in Rome. Last week, we announced an important partnership with the former Alitalia, now called ITA Airways, and we are going to open a Helbiz Kitchen in Rome in the next 60 days. With Helbiz Kitchen, we are looking to expand in the United States and are considering many opportunities in the U.S. I'm sure that in the next couple of weeks, we'll come back to this point, and we will make sure that Helbiz Kitchen will also have a presence in the United States. Helbiz is not only about media and kitchens. In June this year, we decided to launch a media division that is crucial for our business and especially helps our users to engage more with our unlimited subscription. Helbiz Media has launched an OTT service called HelbizLive. HelbizLive will be our brand for the OTT service that is included in the Helbiz Unlimited subscription but can also be subscribed to separately in cities where we do not have a presence through mobility or kitchens. Helbiz Media was able to close key partnerships recently, with Amazon, for instance. Starting December 1st, we will be able to showcase all our content on Amazon Prime Video Italy, alongside important leagues such as the Serie B League in Italy and the NFL in the United States, where we're able to bring content to Italy. We’re also confident that Helbiz can collaborate with other major leagues to ensure we can bring content to Italy and other countries where HelbizLive and Helbiz Media operate. Helbiz Unlimited is at the core of these three different verticals because, through one subscription, users can enjoy unlimited mobility, unlimited orders from Helbiz Kitchen, and unlimited access to all HelbizLive content. We are expecting significant increases in the coming months, and we have already seen growth in Helbiz Unlimited subscriptions. I think this is incredibly important because it highlights our strategic goal: to use micro-mobility to attract users and then offer as many services as possible using the same brand and lifestyle. But now let's dive a little deeper into this quarter's numbers, and let me turn the call over to Giulio. Giulio?

Giulio Profumo, CFO

Thank you, Salvatore. We delivered a strong performance for both the third quarter and the first nine months of 2021. My discussion today will focus mainly on key highlights from the third quarter. Please see today's press release for additional commentary on our financial performance. For the third quarter, we reported revenue of $4.7 million, up 134% against Q3 2020, and up 57% from Q2 2021. Similarly, we saw a significant revenue increase for the first nine months of 2021, which represents a 103% growth compared to the same period in 2020. The increase in revenue was largely driven by the expansion of our fleet and the opening of numerous new cities across the U.S. and Europe. Notably, we also experienced an increase in ride volume and trip duration as several key markets eased COVID restrictions and riders sought socially distant ways to get around. The recently launched Helbiz Media was also a strong contributor, generating over $650,000 in the quarter. With the proceeds from the PIPE, the warrant exercise, and convertible notes, we are increasing our investments in our business. We have been spending heavily on city expansion, fleet expansion, and our kitchen and media initiatives. Being technology-driven, we continue to invest in R&D to enhance our platform. We are also heavily investing in sales and marketing to raise awareness of our various business lines. Looking at the balance sheet, we ended the quarter with $8 million in cash. However, since the end of the quarter, we have raised additional capital through warrant exercises and a convertible offering. As of today, our cash balance is over $30 million. In total, we have raised around $60 million in recent months, leaving us well-funded to drive our growth going forward. Looking ahead, we expect our growth to come from executing our current strategies, increasing our penetration in existing cities, and continuing to expand into new markets. We anticipate growth to accelerate in 2022 now that we have new vehicles ordered, which should arrive just in time for our busiest season in the second and third quarters of 2022. Lastly, we believe that seasonality will not impact us as significantly if we meet our expectations of launching additional cities in Florida and California in the near term. With that said, let me turn the call back to Salvatore for some final remarks.

Salvatore Palella, CEO

Thank you, Giulio. I think the quarter was a significant success, and we are confident of achieving another goal for the next quarter. I want to take this opportunity to clarify that we are not expecting any supply chain issues because we were able to place our orders timely and establish strong relationships with our suppliers in China and globally. We are also working diligently to ensure all our cities operate at full capacity with the full complement of scooters and bikes and mopeds where available. Let me also share some information regarding Helbiz One. Helbiz One will be our retail scooter, and we are pleased to announce that last month we began taking preorders. Preorders have started to arrive, and we are excited to confirm that we will be on track for deliveries by the end of Q2. This is an important achievement for the company as it adds a crucial revenue stream from our retail business. I believe this will be essential in attracting customers who use shared mobility while also appealing to those wanting to purchase scooters branded with our company name. I want to take a moment to congratulate all the project managers and the team for their hard work toward making this goal a reality. I also extend my gratitude to our employees for their dedication, and I want to thank our users, partners, and shareholders for their support and confidence in Helbiz. Thank you for your time today. We greatly appreciate it. We won't have a Q&A session, but we encourage everyone to reach out via email at [email protected] with any questions you may have. Thank you again, and we look forward to the next quarter.

Operator, Operator

Thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect.