Zoomcar Reports Significant Profitability Improvement in its Second Quarter Financial 2024 Results

Rhea-AI Summary

Zoomcar (NASDAQ: ZCAR) reported improved Q2 2024 financial results, with contribution profit reaching $1.21 million (54% of revenue), up from a loss of $0.12 million in Q2 2023. Bookings increased 7% to 105,160, driven by a 1.5x increase in guest repeat booking rate. The company achieved significant cost reductions: 81% in marketing, 55% in repairs, and 52% in technology expenses. Net loss per share decreased to $4.43 from $2,568.82 year-over-year, while Adjusted EBITDA loss reduced to $1.47 million from $3.87 million. Active high-quality cars increased 6% to 5,830, with guest trip ratings improving to 4.63.

Positive

• Contribution profit reached record $1.21M (54% of revenue) vs -$0.12M loss year-over-year
• Significant cost reductions: marketing (81%), repairs (55%), technology (52%)
• Bookings increased 7% to 105,160
• Net loss per share decreased substantially from $2,568.82 to $4.43
• Adjusted EBITDA loss reduced by 62% to $1.47M
• Active high-quality cars increased 6% to 5,830

Negative

• Company still operating at a loss with -$1.47M Adjusted EBITDA
• Net loss per share remains negative at -$4.43

Insights

Financial Analyst

The Q2 FY24 results demonstrate significant operational improvements for Zoomcar. The standout metric is the contribution profit reaching $1.21 million (54% of revenue), a dramatic turnaround from a loss in the same quarter last year. The company has effectively executed cost optimization, achieving substantial reductions across key expense categories: 81% in marketing, 55% in maintenance and 52% in technology costs.

While the 7% growth in bookings to 105,160 shows modest expansion, the $1.47 million Adjusted EBITDA loss represents meaningful progress in reducing cash burn. The dramatic reduction in net loss per share from $2,568.82 to $4.43 indicates improved operational efficiency, though the company remains unprofitable. The focus on high-quality cars and improved customer ratings suggests a sustainable path to profitability, but investors should monitor booking growth acceleration and continued margin expansion.

BANGALORE, India, Nov. 14, 2024 /PRNewswire/ -- Zoomcar Holdings, Inc. (NASDAQ: ZCAR) ('Zoomcar,' or 'we,' or 'our'), the leading marketplace for car sharing in India, today announced results for its second quarter ended September 30, 2024.

Hiroshi Nishijima, CEO of Zoomcar stated, "By making customer experience our top priority, we've been able to organically boost guest repeat bookings and improve host retention. This focus has allowed us to optimize costs, particularly in marketing spend, cash incentives, and discounts, driving a significant improvement in our contribution profit. With a stronger contribution margin, our primary goal is now to grow the number of bookings by bringing in more Guests and achieving more frequent repeat usage. Despite shorter average booking durations, our contribution margin remains robust, making the total number of bookings our most critical metric."

Key Highlights:

1. Net loss per share significantly declined for the quarter ended September 30, 2024 to $4.43 per share as compared to $2,568.82 per share during the same quarter last year.
2. Contribution profit reached a record high of $1.21 million (54% of revenue), a significant improvement from a loss of $0.12 million (-5%) in the same quarter last year and $0.46 million (20%) in the previous quarter.
3. The number of bookings rose by 7%, from 97,970 in the previous quarter to 105,160, in the quarter ended September 30, 2024, driven by 1.5x increase in the guest repeat booking rate.
4. Cost optimization efforts resulted in a 55% reduction in repair and maintenance costs, a 52% reduction in technology expenses (such as cloud services), and an 81% decrease in marketing costs. All reductions are a comparison of the quarter ended September 30, 2024 vs the same quarter last year.
5. Adjusted EBITDA loss decreased significantly to $1.47 million in the quarter ended September 30, 2024 as compared to $3.87 million for the same quarter last year.
6. Average Guest trip ratings saw a significant improvement, rising from 4.16 (out of 5) on March 31, 2024, to 4.70 on June 30, 2024. We are maintaining the improved ratings at 4.63 on September 30, 2024, reflecting our ongoing commitment to enhancing the customer experience.
7. Active high quality cars (with an average rating of more than 4.5 out of 5) increased by 6% from 5,516 cars for the previous quarter to 5,830 cars for the quarter ended September 30, 2024, signaling the improvement of Host retention rate.

We will have a deeper discussion in our Q2 2024 Earnings call:

We would like to invite all shareholders to our Q2 2024 Earnings Call, scheduled for November 14, 2024, at 10:00 AM Eastern Time. Please register in advance through this link - https://us06web.zoom.us/webinar/register/WN_y4xI8uNhTOqMj-fEB8oU4g#/registration

For more details, you can access the full quarterly report here.

Media contact details
Akarshit Gulati: akarshitg@avianwe.com
Bhagyashree Rewatkar: bhagyashree.rewatkar@zoomcar.com

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.

Forward Looking Statement:

Certain statements contained in this press release are not historical facts and may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "plans," "expects," "believes," "anticipates," and similar words are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning our expected revenue growth and improved profitability, and our financial forecasts. Forward-looking statements are based on our current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. A description of certain of these risks, uncertainties and other matters can be found in filings we make with the U.S. Securities and Exchange Commission, all of which are available at www.sec.gov. Because forward-looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by us, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in its expectations with regard to these forward-looking statements or the occurrence of unanticipated events.

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: 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.

Reconciliation of GAAP to Non-GAAP Metrics

The following is the reconciliation of adjusted EBITDA to the most comparable GAAP measure for three months and six months ending September 30, Net Loss.

	For the Three Months Ended Sep 30,		For the Six Months Ended Sep 30,
	2024	2023	2024	2023
Net Loss	$  (3,351,976)	$  (12,402,287)	$  (5,883,554)	$  (41,183,419)
Add/ (deduct)
Stock-based compensation	-	173,693	-	617,905
Depreciation and amortization	101,809	255,126	215,136	510,607
Finance costs	2,160,178	8,363,800	2,320,963	29,884,357
Finance costs to related parties	-	12,915	-	25,777
Other income, net	(28,006)	(271,497)	(1,031,781)	(522,716)
Other income from related parties	-	(1,626)	-	(5,676)
Gain on troubled debt restructuring	(352,447)	-	(352,447)	-
Adjusted EBITDA	$  (1,470,442)	$ (3,869,876)	$  (4,731,683)	$  (10,673,165)

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; (v) finance costs; and (vi) Gain on trouble debt restructuring.

Contribution Profit/(Loss)

The following is the calculation of Contribution Profit/(Loss) to the most comparable GAAP measure for three months and six months ending September 30, Net Revenue.

	For the Three Months Ended Sep 30,		For the Six Months Ended Sep 30,
	2024	2023	2024	2023
Net revenue	$  2,246,897	$  2,681,008	$  4,487,882	$  5,295,626
Cost of revenue	1,213,422	2,737,486	2,725,711	6,348,468
Gross Profit/(Loss)	1,033,475	(56,478)	1,762,171	(1,052,842)
Add: Depreciation and amortization in COR	74,306	210,435	149,179	419,370
Add: Stock-based compensation in COR	-	15,526	-	83,035
Add: Overhead costs in COR  (rent, software support, insurance, travel)	145,346	306,403	350,321	739,295
Less: Host Incentives and Marketing costs (excl. brand marketing)	45,361	598,578	594,744	1,478,093
Less: Host incentives	30,242	145,210	77,864	275,025
Less: Marketing costs (excl. brand marketing)	15,119	453,368	516,880	1,203,048
Contribution Profit / (Loss)	1,207,766	(122,692)	1,666,927	(1,289,235)
Contribution margin	54 %	-5 %	37 %	-24 %

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

FAQ

What was Zoomcar's (ZCAR) contribution profit in Q2 2024?

Zoomcar's contribution profit reached $1.21 million (54% of revenue) in Q2 2024, compared to a loss of $0.12 million in Q2 2023.

How much did Zoomcar (ZCAR) reduce its marketing costs in Q2 2024?

Zoomcar reduced its marketing costs by 81% in Q2 2024 compared to the same quarter last year.

What was Zoomcar's (ZCAR) booking growth in Q2 2024?

Zoomcar's bookings increased by 7% from 97,970 to 105,160 in Q2 2024, driven by a 1.5x increase in guest repeat booking rate.

What was Zoomcar's (ZCAR) Adjusted EBITDA loss in Q2 2024?

Zoomcar's Adjusted EBITDA loss was $1.47 million in Q2 2024, down from $3.87 million in Q2 2023.