• Revenue: $34.5 million for Q2 2024, a decline of 21% from the same quarter last year.
• Gross Profit: $7.3 million for Q2 2024.
• Gross Margin: 21% for Q2 2024, consistent with the prior year period.
• Operating Expenses: $15.7 million for Q2 2024, similar to the prior year period.
• Non-GAAP Operating Loss: $6.2 million for Q2 2024, an increase of $2 million from the prior year period.
• Cash and Cash Equivalents: $29.3 million as of June 30, 2024.
• Net Principal Debt Balance: $54.3 million with maturities in January 2025.
• Employee Count: 282 total employees, a reduction of 38% from the fourth quarter of last year.
• Customer Support Representatives: 220 full-time, a reduction of 52% from the same period last year.
• Q3 2024 Revenue Guidance: Expected to be in the range of $35 million to $38 million.

• Warning! GuruFocus has detected 4 Warning Signs with ULY.

Release Date: August 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Urgently Inc (NASDAQ:ULY) reported second-quarter revenues of $34.5 million, which was at the upper end of their guidance range.
• The company successfully renewed all three major customer partner contracts, which collectively generated more than a third of their revenue for the quarter.
• Urgently Inc (NASDAQ:ULY) secured new customer partners and expanded contracts with existing partners, demonstrating the value of their services and technology.
• The company achieved a customer satisfaction score of 4.5 for the second quarter and 4.6 for the year, reflecting their focus on delivering exceptional service.
• Urgently Inc (NASDAQ:ULY) launched next-generation yield-based pricing technology, which is expected to improve margins and customer outcomes by optimizing job prices for roadside assistance.

Negative Points

• Urgently Inc (NASDAQ:ULY) experienced a 21% year-over-year revenue decline, primarily due to a previously announced customer partner nonrenewal.
• The company revised its outlook for achieving non-GAAP operating breakeven to the first quarter of 2025, delayed from the earlier expectation of the third quarter of 2024.
• Urgently Inc (NASDAQ:ULY) faced a change in service mix, resulting in higher volume from lower-margin jobs and lower volume from higher-margin jobs, impacting margins.
• The company recorded a bad debt expense of approximately $600,000 due to a customer partner filing for bankruptcy.
• Urgently Inc (NASDAQ:ULY) has a net principal debt balance of $54.3 million with maturities in January 2025, and they are working on addressing their capital structure and liquidity position.

Q & A Highlights

Q: Is the fluctuation in revenue from low-margin and high-margin jobs something that occurs quarterly, and is it largely out of your control? A: Tim Huffmyer, CFO: It does fluctuate and is largely out of our control. It depends on job activity, making it difficult to predict. We guide on revenue and directionally on margins, but the mix shift is not something we can control.

Q: Should we expect lower sequential gross margins in the third quarter due to summer travel, or will unique factors offset this? A: Tim Huffmyer, CFO: Historically, lower margins in the third quarter due to summer travel have been the trend, and one could expect that to continue. We are working on improving margins, but from a modeling perspective, expecting lower margins is reasonable.

Q: Regarding the positive non-GAAP operating income expected in Q1 2025, should we expect consistency throughout the year, or could there be fluctuations? A: Tim Huffmyer, CFO: Once we achieve positive non-GAAP operating income, we are confident in maintaining and improving it. While fluctuations could occur, we do not expect them to be material.

Q: How should we think about the cash versus debt situation, especially with debt maturity in January 2025? A: Tim Huffmyer, CFO: Our goal is to resolve this before the next earnings call. We are considering longer maturities and potentially two tiers of debt activity: a working capital line of credit for growth flexibility and terming out the rest.

Q: Can you provide more details on the factors that led to the revision of the non-GAAP operating breakeven target to Q1 2025? A: Matthew Booth, CEO: The revision was due to prioritizing renewals and new business over margin projects, post-merger integration complexities, and changes in service mix affecting margins. These factors collectively led to the revised timeline.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.