Zoomcar Reports Robust Performance in its First Quarter 2024 Results

Rhea-AI Summary

Zoomcar Holdings, Inc. (NASDAQ: ZCAR) reported robust performance in Q1 2024, ending June 30, 2024. The company achieved record non-GAAP gross profit and contribution profit, marking the third consecutive quarter of contribution profit. Key highlights include:

- 9% increase in total bookings to 112,944
- Improvement in contribution margin from -45% to 20% profit
- 58% reduction in cost of revenue to $1.5 million
- Narrowed adjusted EBITDA loss from $6.8 million to $3.3 million
- All-time high guest trip rating of 4.71

CEO Hiroshi Nishijima anticipates meaningful growth and enhanced profitability by the end of FY 2025, supported by streamlined operations and strong demand.

Positive

• Record non-GAAP gross profit and contribution profit achieved
• 9% increase in total bookings to 112,944
• Improvement in contribution margin from -45% loss to 20% profit
• 58% reduction in cost of revenue to $1.5 million
• Adjusted EBITDA loss narrowed from $6.8 million to $3.3 million
• All-time high guest trip rating of 4.71

Negative

• Adjusted EBITDA still showing a loss of $3.3 million

Insights

Financial Analyst

Zoomcar's Q1 2024 results show promising signs of operational efficiency, but caution is warranted. The 9% increase in bookings to 112,944 is modest, yet achieved with reduced marketing spend. The shift from a 45% contribution loss to a 20% contribution profit is significant, marking the third consecutive quarter of positive contribution. Cost optimization efforts led to a 58% reduction in cost of revenue, from $3.6 million to $1.5 million. However, the company still posted an adjusted EBITDA loss of $3.3 million, albeit improved from $6.8 million last year. While progress is evident, Zoomcar needs to demonstrate sustained revenue growth and a clear path to profitability to fully convince investors.

Market Research Analyst

The improvement in Zoomcar's guest trip rating from 4.16 to 4.71 is a important metric for the sharing economy model. This 13% increase in customer satisfaction could drive organic growth and reduce customer acquisition costs. The rise in high-quality listings, with 5,648 vehicles rated above 4.5, suggests a maturing platform. However, the report lacks context on market share and competitive positioning. The focus on India presents both opportunity and risk - it's a vast market, but economic fluctuations and regulatory changes could impact growth. The company's ability to scale while maintaining quality will be key. Investors should monitor user acquisition costs and retention rates in future reports to gauge long-term viability.

Tech Expert

Zoomcar's tech-driven approach to cost optimization is noteworthy. The implementation of a tighter guest verification process using Aadhar, driving license and selfie authentication has significantly reduced late returns and accidents. This showcases how AI and data analytics can improve operational efficiency in the sharing economy. The focus on enhancing in-trip communication between guests and hosts through product improvements is a smart move, directly impacting user experience and ratings. However, the report lacks details on tech infrastructure scalability and innovation pipeline. As Zoomcar aims for profitability, its ability to leverage technology for predictive maintenance, dynamic pricing and enhanced fraud detection will be important differentiators in the competitive car-sharing market.

BENGALURU, India, Aug. 16, 2024 /PRNewswire/ -- Zoomcar Holdings, Inc. (NASDAQ: ZCAR) ("Zoomcar," the "Company," "we," or "our"), the leading marketplace for car sharing in emerging markets, today reported select financial results for the first fiscal quarter ended June 30, 2024.

Management Commentary

"Our first fiscal quarter results reflect a robust performance in our ongoing efficiency efforts. We achieved record non-GAAP gross profit and contribution profit, while also laying the groundwork for substantial revenue growth in the coming quarters," stated Hiroshi Nishijima, CEO of Zoomcar. "This period also marked a significant milestone with the third consecutive quarter of contribution profit. As we look ahead to the end of Fiscal year 2025, we anticipate a meaningful return to growth, supported by enhanced profitability due to our streamlined operational infrastructure."

Zoomcar continues to make significant progress across the company's strategic priorities:

1. Number of bookings: Total number of bookings increased by 9% from 103,643 bookings during the three months ended June 30, 2023, to 112,944 for the three months ended June 30, 2024. This is an important milestone as we achieved this marginal growth with lower expenditure on performance marketing and host incentivisation, a reflection of strong demand and brand strength.
2. Contribution Margin: Our contribution margin improved significantly from a contribution loss of 45% or $1.2 million for the three months ended June 30, 2023, to a contribution profit of 20% or $0.5 million for the three months ended June 30, 2024. This is the third consecutive quarter where we have posted a contribution profit.
3. Cost Optimisation Efforts: We successfully reduced our cost of revenue by 58%, from $3.6 million during the three months ended June 30, 2023, to $1.5 million during the three months ended June 30, 2024. This significant reduction was a result of broad-based cost optimization initiatives driven by technology and product. An example is a tighter guest verification process which uses multiple inputs from Aadhar, driving license and selfie authentication. This has led to a healthy reduction in late returns and accidents.
4. Reduction in adjusted EBITDA: Our adjusted EBITDA demonstrated significant improvement, narrowing from a loss of $6.8 million during the three months ending June 30, 2023, to a loss of $3.3 million during the three months ending June 30, 2024. This reduction underscores the effectiveness of our cost management strategies and our unwavering commitment to operational efficiency.
5. Guest trip rating has reached an all-time high: During the three months ending June 30, 2023, the platform's average guest trip rating was 4.16. By the end of Q1 2024, our product-focused approach to enhancing the customer experience continued to yield dividends. Our commitment to improving in-trip communication between guests and hosts resulted in a significant step function improvement in the overall in-trip experience for both customer groups. The average guest trip rating now stands at an impressive 4.71, the highest to date. Additionally, the number of active vehicles with a platform rating exceeding 4.5 reached 5,648 in the quarter. As we look ahead, we remain dedicated to enhancing the quality of the guest and host experience, expecting further improvements in guest trip ratings and the number of active vehicles with ratings exceeding 4.5.

Together as a team, we are working towards making the fiscal year ending March 31, 2025, a year of sustainable growth and profitability. Under the new leadership team, we are committed to becoming a customer obsessed company for our Hosts and Guests.

For a detailed look at the financials and more insights, you can access the full quarterly report here.

About Zoomcar:

Founded in 2013 and headquartered in Bengaluru, India, Zoomcar is a leading marketplace for car sharing focused in India. The Zoomcar community connects Hosts with Guests, who choose from a selection of cars for use at affordable prices, promoting sustainable, smart transportation solutions in India.

Non-GAAP Financial Measure:

To supplement our financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measures of financial performance are included in this release: Net loss per share, contribution margin, and adjusted EBITDA. A reconciliation of GAAP to adjusted non-GAAP financial measures is included as an attachment to this press release. We believe these non-GAAP financial measures are useful to investors in assessing our operating performance. We use these financial measures internally to evaluate our operating performance and for planning and forecasting of future periods. We also believe it is in the best interests of investors to provide this non-GAAP information.While we believe these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures may not be reported by competitors, and they may not be directly comparable to similarly titled measures of other companies due to differences in calculation methodologies. The non-GAAP financial measures are not an alternative to GAAP information and are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. They should be used only as a supplement to GAAP information and should be considered only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Forward Looking Statement:

This press release may contain forward-looking statements about our plans, efforts, projections, goals, commitments, expectations, or prospects related to our business. These forward-looking statements reflect our management's expectations of financial performance and ability to operate the business and execute our anticipated business plans and strategy. These statements entail significant risk and uncertainty. To identify these forward-looking statements, we use terms such as "may," "will," "aim,"  "improve," "estimate," "efficient", "intend," "indicate," "continue," "promote," "believe," "boosting", "elevate," or "enhance," or the negatives thereof, as well as other variations or comparable terminology. We ask that you read statements that contain these terms carefully because we believe this information is important for our investors and customers. Any forward-looking statement in this press release refers solely to what is accurate as of the day it is issued or based on assumptions that Zoomcar believes to be reasonable. The actual results and outcomes may materially differ due to various factors or events beyond our control which we may not be foreseeable at all times. We cannot guarantee or assure any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this press release can or will be achieved. We undertake no obligation to alter or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as required by law.

Contact Details:

Akarshit Gulati: akarshitg@avianwe.com
Bhagyashree Rewatkar: bhagyashree.rewatkar@zoomcar.com, +91-9029220123

Reconciliation of GAAP to Non-GAAP Metrics

The following is the reconciliation of adjusted EBITDA to the most comparable GAAP measure, Net Loss.

	For the Three Months Ended June 30,
	2024	2023
Net Loss	$         (2,531,579)	$         (28,781,134)
Add/ (deduct)
Stock-based compensation	-	444,212
Depreciation and amortization	113,327	255,481
Finance costs	551,003	21,520,558
Finance costs to related parties	-	12,861
Other income, net	(1,393,992)	(251,219)
Other income from related parties	-	(4,050)
Adjusted EBITDA	$         (3,261,241)	$             (6,803,291)

Adjusted EBITDA is a non-GAAP financial measure that represents our net income or loss adjusted for (i) provision for income taxes; (ii) other income and (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; and (v) finance costs.

Contribution Profit/(Loss)

	For the Three Months Ended June 30,
	2024	2023
Net revenue	$           2,240,985	$              2,614,618
Cost of revenue	1,512,289	3,610,982
Gross Profit/(Loss)	728,696	(996,364)
Add: Depreciation and amortization in COR	74,873	208,935
Add: Stock-based compensation in COR	-	67,509
Add: Overhead costs in COR  (rent, software support, insurance, travel)	204,975	432,892
Less: Host Incentives and Marketing costs (excl. brand marketing)	549,383	879,421
Less: Host incentives	47,621	95,796
Less: Marketing costs (excl. brand marketing)	501,761	783,625
Contribution Profit / (Loss)	$             459,161	$             (1,166,449)
Contribution margin	20 %	-45 %

We define contribution profit (loss) as our gross profit plus (a) depreciation expense included in cost of revenue, (b) stock-based compensation expense included in cost of revenue, (c) other general costs included in cost of revenue (rent, software support, insurance, travel); less (i) Host incentive payments and (ii) marketing and promotional expenses (excluding brand marketing).

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SOURCE Zoomcar Holdings, Inc.

FAQ

What was Zoomcar's (ZCAR) booking growth in Q1 2024?

Zoomcar's total bookings increased by 9% from 103,643 in Q1 2023 to 112,944 in Q1 2024.

How did Zoomcar's (ZCAR) contribution margin change in Q1 2024?

Zoomcar's contribution margin improved from a 45% loss in Q1 2023 to a 20% profit in Q1 2024.

What was Zoomcar's (ZCAR) adjusted EBITDA for Q1 2024?

Zoomcar's adjusted EBITDA loss narrowed from $6.8 million in Q1 2023 to $3.3 million in Q1 2024.

What was Zoomcar's (ZCAR) guest trip rating in Q1 2024?

Zoomcar's guest trip rating reached an all-time high of 4.71 in Q1 2024, up from 4.16 in Q1 2023.