Market Overview

HyreCar Reports Second Quarter 2018 Financial Results

Share:

Q2 2018 Revenues Increase 260% to $2.3 Million; Gross Margins
Increase to 47.4%

Company Reaffirms FY 2018 Revenue Guidance of $10 Million; Expects to
be Cash Flow Positive by Q2 2019

HyreCar Inc. (NASDAQ:HYRE), the car sharing marketplace for ride
sharing, today reported financial results and provided a corporate
update for the second quarter ended June 30, 2018.

Financial Summary:

  Three Months Ended June 30,   Year-over-Year % Change
2018   2017
Revenues   $2.3 million   $0.6 million 260%
Gross Profit $1.1 million $0.1 million 1,391%
Gross Profit Margin 47.4% 11.4% 316%
Adjusted EBITDA (non-GAAP) (1) $(1.3) million $(0.6) million (134%)
Gross Billings (non-GAAP) (2) $5.2 million $1.8 million 185%
 
 
Six Months Ended June 30, Year-over-Year % Change
2018 2017
Revenues $4.0 million $1.1 million 251%
Gross Profit $1.5 million $0.1 million 1,275%
Gross Profit Margin 37.6% 9.6% 292%
Adjusted EBITDA (non-GAAP) (1) $(2.7) million $(1.2) million (118%)
Gross Billings (non-GAAP) (2) $9.6 million $3.2 million 200%

1Adjusted EBITDA is a non-GAAP term and excludes non-cash
items and stock-based compensation. Please see "Use of Non-GAAP
Financial Measures and Reconciliation Table" below.

2Gross billings is a non-GAAP term and an important measure
by which HyreCar evaluates and manages its business. The Company defines
gross billings as the amount billed to drivers and other customers,
without any adjustments for amounts paid to owners or refunds. Gross
billings include transactions from both revenues recorded on a net and a
gross basis. Please see "Use of Non-GAAP Financial Measures" below.

Recent Operational Highlights:

  • Added 1,837 new drivers to the platform in the second quarter of 2018,
    as compared with 978 new drivers in the prior year period. HyreCar's
    average daily active rentals increased 181% to 1001, compared with 356
    in the prior year period.
  • Established strategic partnership with DriveItAway, a leading car
    dealer focused shared mobility company, which enables owners of
    dealerships or fleets of vehicles to capitalize on the
    Mobility-as-a-Service (MaaS) market by connecting them with drivers on
    HyreCar's car-sharing marketplace.
  • Secured strategic partnership with the National Independent Automobile
    Dealers Association (NIADA) via the DriveItAway Partnership. This
    partnership provides NIADA's 17,000 dealership members access to
    HyreCar's car sharing platform and an opportunity to rapidly enter the
    MaaS market.
  • Announced a partnership with a Transportation Network Company (TNC),
    HopSkipDrive, a leading ride share service for kids. This partnership
    is for the Denver market, allowing drivers to find and affordably rent
    large capacity vehicles.
  • Successfully completed an initial public offering in June 2018,
    raising net proceeds of approximately $10.8 million, after deducting
    underwriting fees and offering expenses.

Management Commentary:

"Our record revenue of approximately $2.3 million in the second quarter
of 2018 was a direct result of increased demand for car sharing
services," said Joe Furnari, Chief Executive Officer of HyreCar. "As we
reach critical mass, we are also starting to see some operating leverage
in the business, as evidenced by our 14x increase in gross profit during
the quarter. Given this operational momentum, we expect to be cash flow
positive by the second quarter of 2019.

"Our strong adoption to-date is a result of our unique marketplace
platform, which matches drivers with car owners, while leveraging
HyreCar's proprietary insurance offering that ensures a driver is
covered while ‘off the clock' with a ride-sharing company.

"During the last month, we signed strategic partnerships with
HopSkipDrive—which allows us to connect drivers in the Denver area with
large capacity vehicles for child transportation—and DriveItAway—a
leading car dealer focused shared mobility company with strong ties to
Lyft. Through our relationship with DriveItAway, we then secured a
strategic partnership with the National Independent Automobile Dealers
Association, which has over 17,000 dealership members. Although these
partnerships are in their early stages, we believe these relationships
will contribute to our revenue growth.

"In summary, our model is being proven out in a meaningful way, with the
‘right solution' at the ‘right time' that alleviates the supply
bottlenecks facing the ride-sharing market today. We look forward to
continued operational execution and stockholder value creation over the
long-term," concluded Furnari.

Second Quarter 2018 Financial Results

Total revenue in the second quarter of 2018 increase 260% to a record
$2.3 million, compared to $0.6 million in the second quarter of 2017.
Sequentially, this represents an increase of 33% when compared to
revenue of $1.7 million in the first quarter of 2018. The revenue
increases were primarily due to the growth of the Company's business,
which resulted from the expansion of the sales team, increased marketing
spend and brand awareness.

Gross billings (a non-GAAP term) in the second quarter of 2018 increased
185% to $5.2 million, compared to $1.8 million in the same year-ago
quarter. HyreCar defines gross billings as the amount billed to Drivers
and ancillary sources of income, without any adjustments for amounts
paid to Owners, refunds or rebates. Gross billings include transactions
from both our revenues recorded on a net and a gross basis. The Company
believes the gross billings metrics is useful when assessing the health
of the overall business. Please see "Use of Non-GAAP Financial Measures"
below.

Gross profit in the second quarter of 2018 increased significantly to
$1.1 million, compared to $72,000 in the same year-ago quarter. Gross
profit margin in the second quarter of 2018 increased significantly to
47.4%, compared to 11.4% in the same year-ago quarter. Margin expansion
was driven by a significant reduction in insurance premiums, a reduction
in refunded revenue, and increased referral income.

Total operating expenses, consisting of research and development, sales
and marketing and general and administrative expenses, were $4.2 million
in the second quarter of 2018, compared to $0.8 million in the same
quarter of 2017. The increase in operating expenses was primarily due to
non-cash, stock-based compensation of $1.9 million recognized in the
quarter and one-time professional fees associated with the Company's
recently completed IPO.

Net loss in the second quarter of 2018 totaled $5.0 million, or $(0.92)
per share, compared to a net loss of $0.8 million, or $(0.19) per share,
in the same quarter of 2017. The increase in net loss is primarily due
to two non-cash line items: 1) non-cash stock-based compensation
recognized in the second quarter, and 2) non-cash interest expense
incurred in the second quarter from the conversion of the Company's 2018
bridge notes into common stock during the IPO. Of note, non-cash
stock-based compensation and converted interest expense in the second
quarter totaled $3.7 million. A majority of the stock-based expense and
all of the non-cash converted interest expense were one-time expenses
related to the IPO.

Adjusted EBITDA (a non-GAAP term) in the second quarter of 2018 totaled
$(1.3) million, compared to adjusted EBITDA of $(0.6) million in the
same quarter of 2017. Please see "Use of Non-GAAP Financial Measures"
below.

Cash at June 30, 2018 totaled $11.9 million, compared to $0.2 million at
December 31, 2018. The substantial increase in cash in the second
quarter of 2018 was due to net proceeds of approximately $10.8 million
received from the completion of HyreCar's IPO on June 29, 2018.

Full Year 2018 Revenue Guidance

For the full year ending December 31, 2018, HyreCar reaffirms it
guidance and anticipates revenues of at least $10.0 million, an increase
of at least 213% when compared to revenues of $3.2 million for the full
year ended December 31, 2017.

Conference Call

Management will host an investor conference call at 2:00 p.m. Pacific
time on Monday, August 13, 2018, to discuss HyreCar's second quarter
2018 financial results, provide a corporate update, and conclude with a
Q&A from participants.

To participate, please use the following information:
 
Date: Monday, August 13, 2018
Time: 2:00 p.m. Pacific time (5:00 p.m. Eastern time)
U.S. Dial-in: 1-888-394-8218
International Dial-in: 1-323-701-0225
Conference ID: 2678779

Webcast: http://public.viavid.com/index.php?id=130686

Please dial in at least 10 minutes before the start of the call to
ensure timely participation.

A playback of the call will be available through August 20, 2018. To
listen to the replay, call 1-844-512-2921 within the United States or
1-412-317-6671 when calling internationally. Please use the replay pin
number 2678779.

A webcast will also be available for 90 days on the IR section of the
HyreCar website or by clicking
here
.

About HyreCar

HyreCar Inc. (NASDAQ:HYRE), is the carsharing marketplace for ride
sharing through its proprietary technology platform. The Company is
establishing a leading presence in Mobility as a Service (MaaS) through
vehicle owners and institutions, such as dealers and OEM's, who have
been disrupted by automotive asset sharing. HyreCar currently operates
in 34 states and Washington, D.C. providing a unique revenue opportunity
for both owners and drivers. By providing a safe, secure, and reliable
marketplace, HyreCar is transforming the industry – one driver, one
vehicle, one road at a time. For more information, please visit www.hyrecar.com.

Use of Non-GAAP Financial Measures

The information presented in this press release includes financial
measures that are not calculated or presented in accordance with
generally accepted accounting principles in the United States (GAAP).
These non-GAAP financial measures comprise Adjusted EBITDA and Gross
Billings.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) adjusted for interest and
financing fees, income taxes, depreciation, amortization, stock based
compensation, and other non-cash income and expenses We view Adjusted
EBITDA as an operating performance measure and, as such, we believe that
the GAAP financial measure most directly comparable to such non-GAAP
financial measure is net income (loss). We present Adjusted EBITDA
because we consider it an important measure of operating performance
because it allows management, investors, debtholders and others to
evaluate and compare ongoing operating results from period to period by
removing the impact of our asset base, any asset disposals or
impairments, stock-based compensation and other non-cash income and
expense items associated with our reliance on issuing equity-linked debt
securities to fund our working capital.

Our use of Adjusted EBITDA has limitations as an analytical tool, and
this measure should not be considered in isolation or as a substitute
for an analysis of our results as reported under GAAP, as the excluded
items may have significant effects on our operating results and
financial condition. Additionally, our measure of Adjusted EBITDA may
differ from other companies' measure of Adjusted EBITDA. When evaluating
our performance, Adjusted EBITDA should be considered with other
financial performance measures, including various cash flow metrics, net
income and other GAAP results. In the future, we may disclose different
non-GAAP financial measures in order to help our investors and others
more meaningfully evaluate and compare our future results of operations
to our previously reported results of operations.

Gross Billings

We define Gross Billings as the amount billed to drivers, without any
adjustments for amounts paid to car owners or refunds. Gross billings
include transactions from both our revenues recorded on a net and a
gross basis. As a non- GAAP measure, Gross Billings is not recorded in
our financial statements as revenue. However, we use gross billings to
asses our business growth, scale of operations and our ability to
generate gross billings is strongly correlated to our ability to
generate revenues. Gross billings may also be used to calculate net
revenue margin, defined as the Company's GAAP reportable revenue over
gross billings.

We prepare and publicly release quarterly unaudited financial statements
prepared in accordance with GAAP.

Forward Looking Statements

Statements in this release concerning HyreCar's future expectations and
plans, including without limitation, HyreCar's expectations regarding
its revenues, operating expenses, gross billings and other financial
results, the success of its strategic relationships and the continued
growth of the ride-sharing market, may constitute forward looking
statements for the purposes of the safe harbor provisions under The
Private Securities Litigation Reform Act of 1995 and other federal
securities laws and are subject to substantial risks, uncertainties and
assumptions You should not place reliance on these forward looking
statements, which include words such as "believe," "intend," "may,"
"potential" or similar terms, variations of such terms or the negative
of those terms. Although the Company believes that the expectations
reflected in the forward-looking statements are reasonable, the Company
cannot guarantee such outcomes. Actual results may differ materially
from those indicated by these forward-looking statements as a result of
various important factors, as well as those risks more fully discussed
in the section entitled "Risk Factors" in HyreCar's prospectus, dated
June 26, 2018, that was filed with the U.S. Securities and Exchange
Commission under File No. 333-225157, as well as discussions of
potential risks, uncertainties, and other important factors in HyreCar's
subsequent filings with the U.S. Securities and Exchange Commission .
All such statements speak only as of the date made, and the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.

Note: The attached tables are an integral part of this press
release without which the information presented in this press release
should be considered incomplete.

The following table shows our reconciliation of Net Loss to Adjusted
EBITDA for the three and six months ended June 30, 2018 and 2017:

    Three Months ended   Three Months ended   Six Months ended   Six Months ended
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
Net Loss (U.S. GAAP reported net loss) $ -5,042,285 $ -756,858 $ -6,809,316 $ -1,592,106
Add: Other (income) expense 1,872,604 12,018 2,036,458 155,092
Add: Stock-based employee compensation (non-cash)   1,855,346   195,808   2,065,721   195,808
Adjusted EBITDA (non-U.S. GAAP measure not recorded in financial
statements)
$ -1,314,335 $ -561,050 $ -2,707,137 $ -1,241,206
 

The following table shows our reconciliation of our GAAP reported
revenues to Gross Billings for the three and six months ended June 30,
2017 and June 30, 2018:

 

 

Three Months ended

June 30,

2018

 

Three Months ended

June 30,

2017

 

Six Months ended

June 30,

2018

 

Six Months ended

June 30,

2017

Revenues (U.S. GAAP reported revenues) $ 2,273,499 $ 631,244 $ 3,987,682 $ 1,136,569
Add: Refunds, rebates and deferred revenue 146,811 167,519 530,998 303,685
Add: Owner payments (not recorded in financial statements) 2,773,457

 

1,020,835 5,121,217 1,770,735
Gross billings (non-U.S. GAAP measure not recorded in financial
statements)
$ 5,193,767 $ 1,819,598 $ 9,639,897 $ 3,210,989
 
 

HYRECAR INC.

BALANCE SHEETS

(Unaudited)

   

Balance Sheet

 
(Unaudited)
June 30, 2018 December 31, 2017
Assets
Current assets:
Cash $ 11,867,519 $ 213,944
Accounts receivable 60,800 41,000
Deferred offering costs - 135,608
Deferred expenses 11,585 35,153
Other current assets   82,560     118,020  
Total current assets 12,022,464 543,725
 
Property and equipment, net 3,802 -
Other assets   90,000     90,000  
Total assets $ 12,116,266   $ 633,725  
 
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 1,780,724 $ 1,355,064
Accrued liabilities 428,502 119,226
Deferred revenue 24,960 47,718
Related party advances 9,629 9,629
Note payable, net of discount - 46,368
Notes payable - related party, net of discount 300,000 278,607
Convertible debt, net of discount - -
Settlement payable   -     24,444  
Total current liabilities 2,543,815 1,881,056
   
Total liabilities 2,543,815 1,881,056
 

Commitments and contingencies

- -
 
Stockholders' deficit:

Preferred stock, 15,000,000 shares authorized, par value $0.00001,

0 and 2,429,638 issued and outstanding as of

June 30, 2018 and December 31, 2017, respectively

- 1,591,886
Common stock, 50,000,000 shares authorized, par value $0.00001,

11,643,755 and 5,252,953 issued and outstanding as of

June 30, 2018 and December 31, 2017, respectively

117 52
Additional paid-in capital 21,641,896 2,553,672
Subscription receivable - related party (7,392 ) (140,087 )
Accumulated deficit   (12,062,170 )   (5,252,854 )
Total stockholders' deficit   9,572,451     (1,247,331 )
Total liabilities and stockholders' deficit $ 12,116,266   $ 633,725  
 
 

HYRECAR INC.

STATEMENTS OF OPERATIONS

(Unaudited)

       
Income Statement
 
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Three Months Three Months Six Months Six Months
ended June 30,

ended June 30,

ended June 30,

ended June 30,

  2018    

2017

    2018    

2017

 
 
Revenues $ 2,273,499 $ 631,244 $ 3,987,682 $ 1,136,569
 
Cost of revenues   1,196,547     559,026     2,487,419     1,027,478  
 
Gross profit 1,076,952 72,218 1,500,263 109,091
 
Operating Expenses:
General and administrative 3,156,479 362,218 4,045,733 678,102
Sales and marketing 793,196 351,259 1,676,223 670,936
Research and development   296,958     115,599     522,045     197,067  
Total operating expenses 4,246,633 829,076 6,244,001 1,546,105
 
Operating loss (3,169,681 ) (756,858 ) (4,743,738 ) (1,437,014 )
 
Other (income) expense :
Interest expense 1,874,685 14,299 2,036,458 154,364
Other (income) expense   (2,081 )   (2,281 )   29,120     728  
Total other (income) expense 1,872,604 12,018 2,065,578 155,092
 
Loss before provision for income taxes (5,042,285 ) (768,876 ) (6,809,316 ) (1,592,106 )
 
Provision for income taxes   -     -     -     -  
 
Net loss $ (5,042,285 ) $ (768,876 ) $ (6,809,316 )   (1,592,106 )
 
Weighted average shares outstanding - basic and diluted   5,456,685     3,978,606     5,355,337     4,015,007  
Weighted average net loss per share - basic and diluted $ (0.92 ) $ (0.19 ) $ (1.27 ) $ (0.40 )

View Comments and Join the Discussion!