Urgent.ly, Inc. Q4 FY2024 earnings call

• Renewals: In 2024, nearly one half of run-rate revenue was renewed, including a two-year renewal with a global automotive OEM, a three-year renewal with a global automotive fleet management company, and a two-year renewal with a large vehicle rental company. - Operational Efficiencies: Took actions to enhance partner mix, increase pricing, advance technology platform upgrades, and optimize customer service operations by balancing nearshore and onshore resources. Achieved 160 basis point year-over-year improvement in gross profit margin in 2024. - Capital Structure: Secured a $20 million facility with MidCap Financial in February 2025 and extended credit agreement with Highbridge Capital Management, with support from investors. - Technology Investments: Enhanced platform logic, customer support integrations, dealer tech dispatching logic, and developed AI-driven dynamic pricing technology, recognized with an Auto Tech Breakthrough Award.

For the fourth quarter of 2024, revenue was $32 million, which was within the guidance range of $30 million to $33 million. The full year 2024 revenue was $142.9 million, down 23% from the prior year. Gross profit for the fourth quarter was $7.1 million, down $3.1 million from the same period last year. Full year gross profit was $31.6 million, down $6.3 million from the prior year. Gross margin for the fourth quarter was 22% compared to 23% in the prior year, and full year gross margin was 22% compared to 21% in the prior year. Operating expense for the fourth quarter was $11.7 million, a decrease of $22.3 million or 65% from the same period last year. Full year operating expense was $58.8 million, a decrease of $25.2 million or 30% from the prior year. Non-GAAP operating loss for the fourth quarter was $3 million, an improvement of 62% from the prior year, and full year non-GAAP operating loss was $17.2 million, a reduction of $3.8 million or 18% from the prior year.

• Q1 2025 revenue expected to be between $30 million to $33 million and non-GAAP operating loss to be less than $1 million. - Targeting non-GAAP operating breakeven in mid-2025. - Expected common stock shares outstanding at the end of Q1 2025 is 14.9 million, not reflecting the reverse stock split.

• Potential customer dissatisfaction from migration of customer service operations to different locations, which could lead to increased churn if quality degrades. - Market uncertainties and changes in customer partnerships that could impact revenue, as seen with the cancellation of a significant contract in the fourth quarter.

Q: James McIlree asked about the pricing of renewals, specifically if they were at the same price, up, or down.

A: Tim Huffmyer responded that generally pricing has been holding well, with some contracts having CPI-type price escalators, and Matt Booth added that there is segmentation in contracts with some having new programs like VIP that are priced higher.

Q: James McIlree inquired about how expansion and new customer activity is layered in during the year.

A: Tim Huffmyer said a new customer partner launched late in the fourth quarter with a slight ramp through Q1 2025, and Matt Booth confirmed the ramp.

Q: James McIlree asked about Q1 guidance being flattish with Q4 and seasonality.

A: Tim Huffmyer explained it was due to a canceled larger contract in the fourth quarter and some seasonality, but not significant in Q1.

Q: James McIlree asked about risks of customer dissatisfaction from moving customer service locations.

A: Matt Booth responded that they did thorough testing before moving, customer service scores have been consistent at 4.5 out of 5 stars, and they are strategic about where they use nearshore call centers, with no churn risk anticipated.