Urgent.ly, Inc. Q1 FY2025 earnings call

• First quarter was the best as a public company to-date, with revenue $31.3M within expectations and seventh consecutive quarter meeting revenue guidance.
• Record gross margin of 25.5% achieved, within the midterm outlook of 25% to 30%.
• Non-GAAP operating loss for the quarter was $400,000, well below guidance, and achieved non-GAAP operating breakeven in March.
• Secured first renewal for 2025 with a large global fleet management company.
• Focus on expanding services with existing customer partners, leveraging product innovations like dynamic pricing and predictive maintenance solutions.
• Hired new VP of Sales targeting mid-market insurance companies with a Champion Challenger model.
• Rightsized organization post-Otonomo merger, reducing headcount by 50% and improving processes; achieved customer service score of 4.6 out of 5 stars in Q1 2025.

For the first quarter ended March 31, 2025, Urgent.ly delivered revenue of $31.3 million, which was within the guidance range of $30 million to $33 million. Year-over-year, revenue declined 22% due to customer partner nonrenewal and reduction from the Otonomo business, but was partially offset by volume and rate increases from new and existing partners. Gross profit was $8 million, and gross margin was 25.5%, an improvement from 23% in the prior year. Non-GAAP operating loss for the quarter was approximately $400,000, well below the guidance of $1 million. Operating expenses for the first quarter were $10.4 million, a decrease of $7.3 million from the same period last year, driven by significant reductions in research and development, sales and marketing, operations and support, and general and administrative expenses.

• Second quarter 2025 revenue expected between $30 million to $33 million.
• Non-GAAP operating loss for second quarter expected to be less than $500,000.
• Target to maintain non-GAAP operating breakeven in mid-2025.
• Expected common stock shares outstanding at end of second quarter is 1.3 million.

• Forward-looking statements subject to risks, uncertainties, and assumptions as detailed in SEC filings. Actual results could differ materially from forward-looking statements due to various factors outlined in SEC filings.

Q: Can you provide more detail on the new OEM partner and mid-market insurance opportunity and their relation to gross margin?

A: The rental fleet renewal is positive for expansion. Targeting mid-market insurance with a Champion Challenger model, and improvements in unit economics show readiness to reenter the market. Any first call costs related to insurance could impact margin but efforts are made to hold unit economics.

Q: Explain operating expenses, cash reduction, and growth outlook?

A: Operating expenses expected to slightly decrease on absolute basis. Cash reduction in first quarter related to back-end debt fees and working capital changes, now at normalized levels. Sequential growth in Q3 expected to be modest, with significant wins leading to guidance updates