Earnings Call Transcript - MCOM Q4 2021

Operator, Operator

Thank you for standing by, and welcome to the Helbiz Full Year 2021 Earnings Conference Call. Currently, all participants are in a listen-only mode. As a reminder, today's program may be recorded. If anyone objects, please disconnect now. I'd now like to turn the call over to your host, Gary Dvorchak, Director of The Blueshirt Group. Mr. Dvorchak. Please go ahead.

Gary Dvorchak, Director

Thank you, operator, and hello, everyone. Welcome to Helbiz's full year 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 newswires 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 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 in our filings with the SEC. I will now turn the call over to Salvatore to begin. Salvatore?

Salvatore Palella, CEO

Thank you, Gary. Good day, everyone. Thank you for joining us on today's call to review our accomplishments in 2021. The year was nothing short of spectacular for Helbiz. We entered the year as a private company and exited the year as a publicly traded company on NASDAQ, the first micro-mobility company to be listed in the U.S. with multiple lines of business and over 350 employees around the world. Our micro mobility offering serves 34 cities with 41 licenses globally with multiple vehicle types that meet the growing need of the urban traveler. We added important large cities such as Washington, D.C., Miami, and Sacramento. Our app is now a portal to multiple services that enable a modern urban lifestyle. Besides mobility, we offer food delivery and media sports entertainment with more offerings to come. All this effort is paying off. Revenue tripled in 2021. Let's review in more detail our accomplishments, starting with the foundation of our business, the micro-mobility sector. As I mentioned, we expanded our coverage notably during the year, and we are building our pipeline for future growth. Importantly, growth will not come from new cities alone. In the cities where we are operating, we are focused on expanding the vehicle fleet size as micro-mobility becomes more popular. We also expect to drive revenue growth through higher utilization in the form of longer rides and higher pricing as we have larger and more sophisticated vehicles to deploy fleets. Mobility revenue more than doubled in 2021. Along with these levels of growth, we expect equally solid performance in the coming years. Mobility is our foundation. We are not here to sit still. Customers access mobility through our app, and our app enables us to access our customers. Once the sticky relationship is established, there are all sorts of additional services we can offer our members. In 2021, we accelerated our efforts to offer more to our customers. The most important one was the media, sports, and entertainment offering, which our customers access today through our Helbiz Live app. We rolled this out last summer and it has been an immediate contributor. We are building our library of content, starting with live soccer games from the Italian Serie B league available to Helbiz Live subscribers. We partnered with ESPN to stream the NCAA Football and Basketball championships. Starting from the announcement last year, media made over 20% of our revenue in 2021, even though it was introduced only in the second half of the year. In 2021, we also operated our first experimental ghost kitchens in Milan. The ghost kitchen has a diverse menu that can be ordered via the Helbiz app and delivered by our riders using our vehicles. We have used the app since we launched to test and perfect the format, and we expect the kitchen to become a revenue contributor in 2022. Additionally, we are driving our plans to open more kitchens in the U.S. and Italy. As you can see, our app is evolving into something of a super app offering multiple services and enabling a modern urban lifestyle. There is plenty more we can do with it, from advertising to financial services. The growth possibilities are endless. Importantly, our growth potential is not limited to services. We are leveraging our mobility offerings to not only provide rides but also to offer our stylish scooter for retail sale. Late in 2021, we introduced the Helbiz One e-scooter, which can be pre-ordered now for delivery later this year. Helbiz is quickly becoming known for beautiful design, and we see the opportunity to leverage this emerging brand reputation into other categories over time. I now want to talk about the R&D capability we built over the years. Our mobility service, our app, our vehicles, and all other new services are built on a foundation of sophisticated technology developed in-house by our amazing team of almost 50 engineers and developers. This group enables us to win the highly competitive city licenses that fuel our growth. For example, we are integrating AI that enables enforcement for valued demand policies. Some cities require helmets to ride, and to enforce these, we developed our AI selfie analysis feature. We integrated geolocation technology to enforce parking policies. We can develop our sensors and software to ensure scooters have only one ride. We have developed the software to serve advertising both in-app and at parking terminals. Our R&D team is only scratching the surface of innovation that will drive our business for the years to come. Before I turn the call to Giulio for the financial discussion, I want to touch on our commitment to corporate responsibility. As a modern young company, we are committed to implementing all the relevant standards of the UN sustainability development goals. Our micro-mobility offering is a necessary step to reduce carbon emissions, urban congestion, and to make safe, convenient, and inexpensive transportation accessible to a wide range of people. We are committed to sustainability in our operations. For instance, we have partnered with Li-Cycle to recycle our spent vehicle batteries. We are in the process of implementing an ESG dashboard on our website so that you can continuously track our ESG performance. We are proud of our ESG commitment, and we want the world to be able to measure our commitment on an ongoing basis. Now let me turn the call over to our CFO, Giulio, to discuss our financial performance for the year. Giulio Profumo?

Giulio Profumo, CFO

Thank you, Salvatore. 2021 was a milestone year for Helbiz financially. From our beginning as a small startup, we gained momentum last year and are positioned for exceptional growth this year and beyond. I will cover the key highlights now. You can see all the details in our 10-K filing and earnings release. Full-year revenue nearly tripled in 2021, up 190%. This was driven by accelerating growth in our core mobility segment, complemented by our new media business. Mobility growth was largely driven by the expansion of our fleet and the opening of several new cities across the U.S. and Europe. Notably, we also experienced an increase in ride volumes and trip duration as several key markets lifted restrictions and riders sought socially distant ways to get around. For our mobility business, annual active platform users were up 80% in 2021. Annual active platform users have grown at a CAGR of 155% since 2019. Trips measured by the number of completed rides were up by 23% last year and have grown at a CAGR of over 300% since 2019. The performance drove mobility revenue growth by 135%. Important to mobility revenue was the growth of Helbiz unlimited subscriptions, which were up 246%. Our unlimited subscribers are sticky and for a monthly recurring subscription, they receive a package of clients, a limited access to Helbiz Live, and unlimited free food delivery. Complementing the strong performance in mobility was delivery and media. The new business lines were launched last year. Media started as a strong contributor at 22% of revenue last year. Media revenue was mainly composed of international commercialization and distribution of content to media partners. For instance, we generated revenue from the sale of the rights to broadcast the Italian League Serie B soccer matches globally. Now let's move on to the operating expenses. At this early stage of our growth, we're investing heavily in growing our existing services and developing new ones. You should expect us to continue to invest heavily in our businesses. Operating expenses were composed of cost of revenue, R&D, sales and marketing, and general and administrative expenses. Operating expenses in 2021 were $72 million, up 195% over 2020. We had substantial increases in R&D, sales and marketing, and general and administrative expenses. We recorded $7.4 million in stock-based compensation expenses associated with service-based awards and a one-time issuance of shares in connection with our business combination in 2021. Cost of revenue was also impacted by the launch of Helbiz Live, which accounted for 28% of cost of revenue. Content licensing was a major component. Research and development expense was up 76% to $2.8 million in 2021. Salvatore highlighted the many innovations developed by our R&D group, so this was money well spent. Sales and marketing growth was driven by heavy investments to promote awareness of our multiple business lines, and the increase in general and administrative expenses was driven by hiring professional services and fee-related personnel stock compensation. Turning to the balance sheet, we closed the year with over $20 million in cash. Importantly, we can fund our growth plans. In addition to cash, we have borrowing capacity and publicly traded stock that give us access to the capital markets. Looking ahead, I'd like to offer some guidance for 2022. Based on our existing city footprint, potential new city openings and a growing fleet with 25,000 new vehicles coming later this year, plus our outlook for the medium term, we expect solid revenue growth in 2022. Now I will turn the call over to Salvatore for closing remarks.

Salvatore Palella, CEO

2021 was a defining time in our company's history. Being the first publicly listed micro-mobility company established us as a leader in our industry. We expanded rapidly in mobility and set the stage for future growth with many license awards in new cities. We also gained early momentum in the new business lines, such as media and delivery, and look forward to continued rapid growth in 2022 and beyond. Our goal is to offer a platform of services that enable the modern urban lifestyle—mobility, delivery, financial services, media, sports entertainment, and more. We are investing heavily to build our leading position in our industry. If any of you have questions, please contact us directly. We are happy to spend time with you to increase your understanding of our business. Thank you for your time today. We really appreciate it and we're looking forward to reporting our progress in the next quarter ahead. Thank you.

Operator, Operator

Thank you. Ladies and gentlemen, this does conclude the conference call. You may now disconnect.