Customer and Service Provider Network - As of September 30, 2025, the company has 59 Customer Partners and over 74,000 participating Service Provider vehicle drivers in its network[103]. Dispatch and Revenue Performance - For the three months ended September 30, 2025, the company completed approximately 194,000 dispatches, a decrease from 219,000 dispatches in the same period of 2024[119]. - For the nine months ended September 30, 2025, the company completed approximately 574,000 dispatches, down from 656,000 dispatches in the same period of 2024[119]. - Total revenue decreased by $3.3 million, or 9%, to $32.9 million for the three months ended September 30, 2025, compared to $36.2 million for the same period in 2024[141]. - Revenue decreased by $15.0 million, or 14%, to $95.9 million for the nine months ended September 30, 2025, compared to $110.9 million for the same period in 2024[156]. Cost and Profit Analysis - Cost of revenue decreased by $3.6 million, or 13%, to $24.8 million for the three months ended September 30, 2025, primarily due to a decline in dispatch volume[143]. - Cost of revenue decreased by $14.6 million, or 17%, to $71.9 million for the nine months ended September 30, 2025, primarily due to a decline in dispatch volume[157]. - Gross profit increased by $0.3 million to $8.1 million for the three months ended September 30, 2025, driven by improved unit economics per dispatch[144]. - Gross profit for the nine months ended September 30, 2025 was $24.0 million, a slight decrease from $24.4 million in the same period of 2024[158]. Operating Expenses - Non-GAAP operating expenses for the three months ended September 30, 2025, were $7.988 million, compared to $10.710 million for the same period in 2024, reflecting a decrease of approximately 25.5%[122]. - Total operating expenses decreased by $3.8 million, or 28%, to $9.9 million for the three months ended September 30, 2025[140]. - Research and development expenses decreased by $1.3 million, or 42%, to $1.8 million for the three months ended September 30, 2025[145]. - Sales and marketing expenses decreased by $0.8 million, or 53%, to $0.7 million for the three months ended September 30, 2025[147]. - General and administrative expenses decreased by $1.3 million, or 26%, to $3.7 million for the three months ended September 30, 2025[151]. - Research and development expenses decreased by $5.7 million, or 51%, to $5.4 million, representing 6% of total revenue, down from 10%[160][161]. - Sales and marketing expenses decreased by $3.0 million, or 59%, to $2.1 million, representing 2% of total revenue, down from 5%[162][163]. - Operations and support expenses decreased by $3.6 million, or 33%, to $7.3 million, representing 8% of total revenue, down from 10%[164][165]. - General and administrative expenses decreased by $4.2 million, or 25%, to $12.3 million, representing 13% of total revenue, down from 15%[166][167]. Net Loss and Cash Flow - Net loss for the three months ended September 30, 2025, was $5.2 million, compared to a net loss of $10.6 million for the same period in 2024[140]. - Net cash used in operating activities for the nine months ended September 30, 2025 was $5.6 million, an improvement from $28.8 million in the same period of 2024[182][183]. - Net cash used in investing activities for the nine months ended September 30, 2025 was $4.0 million, compared to a net cash provided of $26.0 million in 2024[184][185]. - Net cash used in financing activities for the nine months ended September 30, 2025 was $0.6 million, a decrease from $18.1 million in 2024[187][188]. Debt and Cash Position - As of September 30, 2025, the principal debt balance totaled $61.0 million, with maturity dates through July 31, 2026[171]. - The company had $4.0 million in cash, cash equivalents, and restricted cash as of September 30, 2025[171]. Strategic Focus and Future Outlook - The company capitalized $4.1 million in costs associated with internal development of its technology platform for the nine months ended September 30, 2025, and expects to invest an additional $1.0 to $1.5 million in Q4 2025[112]. - The company's gross profit is expected to increase modestly over the long term due to platform enhancements leading to more cost-effective Service Provider costs[129]. - The company aims for 100% Consumer satisfaction, with a consumer satisfaction score of 4.6 out of 5 for both the three and nine months ended September 30, 2025[116]. - The company is focused on investing in proprietary technology, machine learning, and data analytics to streamline operations and improve Consumer experience[111]. - The company anticipates that its platform capabilities will grow to meet the demands of new Customer Partners as its Service Provider network expands[107]. Regulatory and Reporting Status - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new accounting standards until they apply to private companies[190]. - Management believes there are no material changes to critical accounting estimates that impact the portrayal of financial condition and results of operations[192]. - The company is a smaller reporting company and is not required to provide certain market risk disclosures[194].

Financial Data and Key Metrics Changes - For Q3 2025, the company achieved revenue of $32.9 million, marking a 9% decline or $3.3 million from the same quarter last year, primarily due to reduced dispatch volume from a top OEM customer and decreased revenue from the autonomous business [14] - Gross margin improved to 25%, up from 21% in the same period last year, driven by service dispatch mix and technology optimizations [15] - Non-GAAP operating income for Q3 2025 was $123,000, a significant improvement from a non-GAAP operating loss of $2.9 million in the prior year period, indicating a profitability inflection point [18] Business Line Data and Key Metrics Changes - The company is focusing on new account growth and expanding market share, particularly in the insurance markets, with a new contract launching soon and additional contracts in negotiation [7][8] - The company is also gaining momentum in securing revenue from new logos across various verticals, including fleet and autonomous vehicles [9] Market Data and Key Metrics Changes - The company is positioned to benefit from a potential economic downturn, as increased vehicle breakdowns may lead to higher revenue, particularly from premium OEMs and insurance customers [22][23] - The company anticipates a strong renewal cycle with existing customers, which is crucial for maintaining revenue stability [25][26] Company Strategy and Development Direction - The company aims to return to growth by expanding its existing B2B incident business, securing renewals, and developing new customer partnerships [12] - The company is also focused on transforming the roadside solutions market through product innovations that differentiate it from competitors [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic challenges, suggesting that a weakening economy could lead to increased demand for their services [23] - The company expects to maintain non-GAAP operating break-even in Q4 2025, with revenue guidance set between $30-$33 million [19] Other Important Information - The company received a continued listing extension from NASDAQ through February 16, 2026, after presenting a plan to regain compliance with listing rules [4] - The company is actively pursuing strategies to recapitalize its balance sheet to unlock incremental value for shareholders [11] Q&A Session Summary Question: How should investors think about Urgent.ly's positioning in a weakening economy? - Management indicated that the company is somewhat anti-cyclical, as economic downturns may lead to increased vehicle breakdowns, potentially improving revenue [22][23] Question: How should investors view the company's future renewals and customer wins? - Management highlighted strong opportunities in the pipeline, including new insurance contracts and a positive outlook for renewals, suggesting a strong finish to the year [25][26]

Revenue Performance - Revenue for Q3 2025 was $32.9 million, a decrease of 9% year-over-year[6] - Year-to-date revenue was $95.9 million, a decrease of 14% year-over-year[6] Profitability Metrics - Gross profit increased by 4% to $8.1 million, with a gross margin of 25%, up from 21% in the prior year[6] - Non-GAAP operating income was $0.1 million, an improvement of 104% from a non-GAAP loss of $2.9 million in the prior year[6] - The operating loss for Q3 2025 was $1,769,000, an improvement from an operating loss of $5,891,000 in Q3 2024[18] - The company reported a total operating loss of $6,369,000 for the nine months ended September 30, 2025, compared to $22,579,000 in the same period of 2024[18] Operating Expenses - GAAP operating expenses decreased by 28% to $9.9 million, compared to $13.7 million in the prior year[6] - Non-GAAP operating expenses improved by 25% to $8.0 million, down from $10.7 million in the prior year[6] - Total operating expenses for the nine months ended September 30, 2025, were $30,402,000, down from $47,025,000 in the same period of 2024, reflecting a reduction of 35.2%[17] - Non-GAAP operating expenses for the nine months ended September 30, 2025, were $24,483,000, down from $38,660,000 in the same period of 2024, reflecting a reduction of 36.7%[17] Asset Management - Total assets decreased to $42.8 million from $54.1 million at the end of 2024[15] Customer Engagement - Approximately 194,000 dispatches were completed in Q3 2025, maintaining a consumer satisfaction score of 4.6 out of 5 stars[6] - The company continues to focus on expanding relationships with existing customer partners and developing new customer opportunities[3] Expense Breakdown - Depreciation and amortization expenses for Q3 2025 were $1,204,000, slightly up from $1,130,000 in Q3 2024[18] - Stock-based compensation expenses for the nine months ended September 30, 2025, were $1,213,000, down from $1,765,000 in the same period of 2024[17] - Non-recurring transaction costs for Q3 2025 were $419,000, compared to $638,000 in Q3 2024, indicating a decrease of 34.4%[18] - Restructuring costs for Q3 2025 were minimal at $24,000, a significant improvement from $569,000 in Q3 2024[18]

Urgently Delivers Q3 2025 Revenue Growth, Margin Expansion, GAAP Operating Loss Reduction and Non-GAAP Operating IncomeASHBURN, Va., Nov. 12, 2025 (GLOBE NEWSWIRE) -- Urgent.ly Inc. (Nasdaq: ULY) (“Urgently”), a U.S.-based leading provider of digital roadside and mobility assistance technology and services, today reported financial results for the third quarter ended September 30, 2025. “We’re pleased to report continued progress in our financial performance. Revenue grew quarter-over-quarter, demonstrating ...

ASHBURN, Va., Nov. 04, 2025 (GLOBE NEWSWIRE) -- Urgent.ly Inc. (Nasdaq: ULY) (“Urgently”), a U.S.-based leading provider of digital roadside and mobility assistance technology and services, today announced the date for the release of its third quarter 2025 financial results. Urgently will host a conference call on Wednesday, November 12, 2025, at 5:00 p.m. Eastern Time to discuss its financial results for the third quarter ended September 30, 2025. Financial results will be issued in a press release prior t ...

Core Insights - Urgently, a leading provider of roadside and mobility assistance using AI technology, has partnered with Sony Honda Mobility of America to offer nationwide coverage for AFEELA vehicle owners starting in 2026 [1][2][3] Company Overview - Urgently focuses on providing safe and seamless mobility solutions through a digitally native software platform that integrates location-based services, real-time data, AI, and machine-to-machine communication [7] - Sony Honda Mobility of America is a joint venture between Sony Group Corporation and Honda Motor Co., Ltd., aiming to redefine mobility by combining entertainment innovation with automotive engineering [6] Partnership Details - The partnership will ensure that AFEELA customers receive reliable roadside assistance from day one of the vehicle's delivery, enhancing the overall customer experience [2][3] - Both companies are preparing for service integration to align with the AFEELA 1 launch, emphasizing a commitment to innovation and customer support [3][4] Customer Experience - The collaboration aims to provide AFEELA drivers with a premium, connected experience, leveraging Urgently's extensive network and digital-first platform [4] - The AFEELA brand is designed to offer a next-generation driving experience that incorporates advanced sensing and interactive technology [5]

Core Points - Urgently Inc. has been notified by Nasdaq of potential delisting due to non-compliance with Listing Rule 5550(b), which requires a minimum of $500,000 in net income, a market value of $35 million, or $2.5 million in stockholders' equity as of September 15, 2025 [1] - The company intends to request a hearing before the Nasdaq Hearings Panel to present its compliance plan and seek an extension [2] - Urgently is focused on providing digital roadside and mobility assistance services, utilizing technology such as AI and real-time data to enhance user experiences and customer satisfaction [3]

PART I. FINANCIAL INFORMATION This section presents Urgent.ly Inc.'s financial statements and management's discussion, highlighting its financial condition, operational results, and internal controls [Item 1. Financial Statements.](index=5&type=section&id=Item%201.%20Financial%20Statements.) This section presents Urgent.ly Inc.'s unaudited condensed consolidated financial statements, highlighting an accumulated deficit of **$209.9 million** and substantial doubt about its going concern ability - The company has a history of recurring operating losses and an accumulated deficit of **$209.9 million** as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern[30](index=30&type=chunk) [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section provides a summary of Urgent.ly Inc.'s financial position as of June 30, 2025, and December 31, 2024 **Balance Sheet Summary (in thousands)** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $4,705 | $14,054 | | Accounts receivable, net | $19,873 | $22,890 | | Total current assets | $26,909 | $40,756 | | Total assets | $40,152 | $54,071 | | Total current liabilities | $29,309 | $37,594 | | Total liabilities | $81,460 | $85,741 | | Total stockholders' deficit | $(41,308) | $(31,670) | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details Urgent.ly Inc.'s financial performance and comprehensive loss for the three and six months ended June 30, 2025 and 2024 **Statements of Operations (Six Months Ended June 30, in thousands)** | Metric | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Revenue | $62,959 | $74,629 | | Cost of revenue | $47,037 | $57,948 | | Gross profit | $15,922 | $16,681 | | Total operating expenses | $20,522 | $33,369 | | Operating loss | $(4,600) | $(16,688) | | Total other expense, net | $(6,471) | $(7,845) | | Net loss attributable to common stockholders | $(11,096) | $(24,682) | | Basic and diluted EPS | $(9.18) | $(22.12) | **Statements of Operations (Three Months Ended June 30, in thousands)** | Metric | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Revenue | $31,687 | $34,537 | | Cost of revenue | $23,754 | $27,207 | | Gross profit | $7,933 | $7,330 | | Total operating expenses | $10,086 | $15,670 | | Operating loss | $(2,153) | $(8,340) | | Total other expense, net | $(3,453) | $(3,217) | | Net loss attributable to common stockholders | $(5,612) | $(11,667) | | Basic and diluted EPS | $(4.50) | $(10.43) | [Unaudited Condensed Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Deficit) This section outlines changes in Urgent.ly Inc.'s stockholders' deficit for the periods ending June 30, 2025, March 31, 2025, and December 31, 2024 **Stockholders' Deficit (in thousands)** | Metric | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :------------------------ | :---------------- | :------------- | :------------ | | Common Stock (Amount) | $1 | $1 | $1 | | Additional Paid-In Capital | $167,125 | $168,201 | $168,583 | | Accumulated Deficit | $(198,796) | $(204,280) | $(209,892) | | Total Stockholders' Deficit | $(31,670) | $(36,078) | $(41,308) | - Key changes in stockholders' deficit for the six months ended June 30, 2025, include a net loss of **$(11.1 million)**, issuance of common stock of **$0.6 million** in connection with the Highbridge loan amendment, and stock-based compensation expense of **$0.9 million**[22](index=22&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents Urgent.ly Inc.'s cash flow activities from operations, investing, and financing for the six months ended June 30, 2025 and 2024 **Cash Flow Summary (Six Months Ended June 30, in thousands)** | Activity | 2025 | 2024 | | :---------------------- | :----- | :----- | | Operating activities | $(2,191) | $(20,120) | | Investing activities | $(2,456) | $24,678 | | Financing activities | $(4,702) | $(18,066) | | Net decrease in cash | $(9,349) | $(13,458) | | Cash, cash equivalents and restricted cash, end of period | $4,830 | $24,798 | - Net cash used in operating activities for the six months ended June 30, 2025, was **$2.2 million**, primarily due to a net loss of **$11.1 million**, offset by non-cash expenses totaling **$9.3 million** and a decrease in accounts receivable of **$2.9 million**[25](index=25&type=chunk)[182](index=182&type=chunk) - Net cash used in investing activities for the six months ended June 30, 2025, was **$2.5 million**, mainly due to **$2.4 million** in capitalized software investments[25](index=25&type=chunk)[184](index=184&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of Urgent.ly Inc.'s accounting policies, significant transactions, and financial statement line items - The Company's financial statements are prepared assuming it will continue as a going concern, despite recurring operating losses and an accumulated deficit of **$209.9 million** as of June 30, 2025[29](index=29&type=chunk)[30](index=30&type=chunk) - Revenue concentration: **59%** of revenue for Q2 2025 and **56%** for H1 2025 was earned from two customers, with **72%** of accounts receivable at June 30, 2025, due from four customers[41](index=41&type=chunk) - As of June 30, 2025, total principal debt was **$55.3 million**, including a Highbridge Capital term loan (**$43.3 million**) and a MidCap Financial revolving credit facility (**$7.8 million**), with the Structural Capital term loan fully repaid in February 2025[68](index=68&type=chunk)[71](index=71&type=chunk)[77](index=77&type=chunk) - On July 1, 2025, the company issued 112,038 shares of common stock to investors, and on July 11, 2025, it entered into an At-The-Market (ATM) equity offering program to sell up to **$4.0 million** of common stock[98](index=98&type=chunk)[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Urgent.ly Inc.'s financial condition and operational results, highlighting reduced operating losses despite decreased revenue, driven by expense reductions and strategic investments - Urgent.ly operates a leading connected mobility assistance software platform, serving 55 Customer Partners and over 74,000 Service Providers as of June 30, 2025[102](index=102&type=chunk)[103](index=103&type=chunk) - Revenue is primarily generated from multi-year contracts with Customer Partners on a per-incident basis, membership programs, and SaaS solutions[104](index=104&type=chunk) - The company capitalized **$2.7 million** in software development costs in H1 2025 and expects to invest an additional **$2.0-$3.0 million** in the remainder of 2025[112](index=112&type=chunk) [Overview](index=19&type=section&id=Overview) This section provides a general description of Urgent.ly Inc.'s connected mobility assistance software platform and its operational focus - Urgent.ly's platform leverages location-based services, real-time data, AI, and machine-to-machine communication to deliver roadside assistance services[103](index=103&type=chunk) - The company's Sales and Partner Management Department focuses on Customer Partner retention and Consumer satisfaction, often engaging in pilot programs before multi-year contracts[105](index=105&type=chunk) [Key Factors Affecting Our Performance](index=19&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) This section identifies critical elements influencing Urgent.ly Inc.'s financial and operational performance, including customer acquisition, technology investment, and seasonality - New Customer Partner acquisition is a key factor for revenue growth, margin improvement, and profitability, with one new Customer Partner launched and another scaled up in the first half of 2025[106](index=106&type=chunk)[109](index=109&type=chunk) - Continued investment in proprietary technology, machine learning, and data analytics is crucial for maintaining a competitive advantage and expanding platform functionality[110](index=110&type=chunk) - Seasonality impacts service requests, with higher volumes during summer/holiday travel and winter weather, and also during economic downturns due to delayed vehicle maintenance[113](index=113&type=chunk)[114](index=114&type=chunk) [Key Business Metrics](index=20&type=section&id=Key%20Business%20Metrics) This section presents essential operational metrics used to evaluate Urgent.ly Inc.'s business performance, such as consumer satisfaction and dispatch volumes **Consumer Satisfaction Score (1-5 star scale)** | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30, | 4.7 | 4.5 | | Six Months Ended June 30, | 4.6 | 4.6 | **Number of Dispatches (in thousands)** | Period | 2025 | 2024 | Change | | :-------------------------- | :--- | :--- | :----- | | Three Months Ended June 30, | 191 | 205 | (14) | | Six Months Ended June 30, | 380 | 436 | (56) | [Non-GAAP Financial Measures](index=21&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles GAAP operating expenses and operating loss to their non-GAAP counterparts, providing alternative performance indicators **Non-GAAP Operating Expenses (in thousands)** | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating expenses (GAAP) | $10,086 | $15,670 | $20,522 | $33,369 | | Less: Depreciation and amortization expense | $(1,079) | $(1,104) | $(2,065) | $(2,206) | | Less: Stock-based compensation expense | $(382) | $(438) | $(920) | $(1,156) | | Less: Non-recurring transaction costs | $(178) | $(207) | $(553) | $(933) | | Less: Restructuring costs | $(315) | $(425) | $(489) | $(1,124) | | **Non-GAAP operating expenses** | **$8,132** | **$13,496** | **$16,495** | **$27,950** | **Non-GAAP Operating Loss (in thousands)** | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating loss (GAAP) | $(2,153) | $(8,340) | $(4,600) | $(16,688) | | Add: Depreciation and amortization expense | $1,079 | $1,104 | $2,065 | $2,206 | | Add: Stock-based compensation expense | $382 | $438 | $920 | $1,156 | | Add: Non-recurring transaction costs | $178 | $207 | $553 | $933 | | Add: Restructuring costs | $315 | $425 | $489 | $1,124 | | **Non-GAAP operating loss** | **$(199)** | **$(6,166)** | **$(573)** | **$(11,269)** | [Components of Results of Operations](index=22&type=section&id=Components%20of%20Results%20of%20Operations) This section details the primary revenue streams, cost structures, and gross margin expectations for Urgent.ly Inc.'s business operations - Revenue is primarily generated from roadside assistance services (RAS) through full-service outsourcing (flat-rate or claim cost pass-through) and direct membership offerings[126](index=126&type=chunk)[132](index=132&type=chunk) - Cost of revenue mainly consists of fees paid to Service Providers, technology hosting, platform-related costs, and direct call center support[128](index=128&type=chunk)[52](index=52&type=chunk) - Gross margin is expected to increase modestly over the long term due to platform enhancements leading to more cost-effective Service Provider costs[129](index=129&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section analyzes Urgent.ly Inc.'s revenue, gross profit, and operating expenses, explaining the drivers behind changes in financial performance - Revenue decreased by **$2.9 million (8%)** for the three months ended June 30, 2025, primarily due to the early termination of a top 5 global OEM Customer Partner and a reduction in the Otonomo business, partially offset by new Customer Partners[139](index=139&type=chunk) - Gross profit increased by **$0.6 million** for the three months ended June 30, 2025, driven by improved unit economics per dispatch despite a decrease in volume[142](index=142&type=chunk) - Operating expenses significantly decreased across all categories for both the three and six months ended June 30, 2025, primarily due to reductions in Otonomo-related expenses, employee-related costs, and operational efficiencies[143](index=143&type=chunk)[145](index=145&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk)[157](index=157&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) - Revenue decreased by **$11.7 million (16%)** for the six months ended June 30, 2025, due to non-renewal of an auto manufacturer, existing Customer Partner volume reduction, Otonomo business reduction, early termination of a top 5 global OEM, and an EV Customer Partner bankruptcy[154](index=154&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses Urgent.ly Inc.'s ability to meet its short-term and long-term financial obligations, including cash position and debt arrangements - The company faces substantial doubt about its ability to continue as a going concern due to recurring losses and reliance on debt/equity financing[169](index=169&type=chunk) - As of June 30, 2025, cash, cash equivalents, and restricted cash totaled **$4.8 million**, with a principal debt balance of **$55.3 million**[170](index=170&type=chunk) - The company repaid the Structural Loan Agreement in February 2025, extended the Highbridge Loan Agreement maturity to July 31, 2026, and entered into a new MidCap Financial Revolving Credit Facility for up to **$20.0 million**[171](index=171&type=chunk)[173](index=173&type=chunk)[177](index=177&type=chunk) - An At-The-Market (ATM) equity offering program was established in July 2025 to sell up to **$4.0 million** of common stock[176](index=176&type=chunk) [Cash Flows](index=29&type=section&id=Cash%20Flows) This section analyzes Urgent.ly Inc.'s cash generation and usage from operating, investing, and financing activities for the reported periods **Net Cash Provided by (Used in) Activities (Six Months Ended June 30, in thousands)** | Activity | 2025 | 2024 | | :---------------------- | :----- | :----- | | Operating activities | $(2,191) | $(20,120) | | Investing activities | $(2,456) | $24,678 | | Financing activities | $(4,702) | $(18,066) | - Net cash used in operating activities significantly decreased to **$2.2 million** in H1 2025 from **$20.1 million** in H1 2024, primarily due to a reduced net loss and favorable changes in accounts receivable[182](index=182&type=chunk)[183](index=183&type=chunk) - Net cash used in investing activities was **$2.5 million** in H1 2025, a shift from **$24.7 million** provided in H1 2024, mainly due to investments in capitalized software and the absence of proceeds from short-term deposits/marketable securities sales seen in the prior year[184](index=184&type=chunk)[185](index=185&type=chunk) [Contractual Obligations and Commitments](index=30&type=section&id=Contractual%20Obligations%20and%20Commitments) This section outlines Urgent.ly Inc.'s significant contractual cash obligations, including credit facilities, long-term debt, and operating leases - Principal commitments include contractual cash obligations under credit facilities, long-term debt, and operating leases[189](index=189&type=chunk) [Emerging Growth Company Status](index=30&type=section&id=Emerging%20Growth%20Company%20Status) This section discusses Urgent.ly Inc.'s status as an emerging growth company and its election to delay adoption of new accounting pronouncements - As an 'emerging growth company' under the JOBS Act, Urgent.ly has elected to delay the adoption of new or revised accounting pronouncements, which may affect comparability with other public companies[190](index=190&type=chunk) [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) This section confirms that there are no material changes to Urgent.ly Inc.'s critical accounting estimates previously disclosed in the Annual Report - Management believes there are no material changes to the critical accounting estimates previously disclosed in the Annual Report[192](index=192&type=chunk) [Recent Accounting Pronouncements](index=30&type=section&id=Recent%20Accounting%20Pronouncements) This section details recent accounting pronouncements, including ASU 2023-09, and their potential impact on Urgent.ly Inc.'s financial disclosures - The FASB issued ASU 2023-09 in December 2023, effective for annual periods beginning after December 15, 2024, which provides improvements to income tax disclosures, and the company is evaluating its impact[46](index=46&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Urgent.ly Inc. is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[194](index=194&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that Urgent.ly Inc.'s disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting, with remediation plans underway - Disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting[195](index=195&type=chunk) - Two material weaknesses identified: (i) lack of evidence of segregation of duties within accounting and finance, and (ii) ineffective design and maintenance of IT general controls for information systems and user privileges[198](index=198&type=chunk) - Remediation plans include designing and maintaining new/revised controls for IT user access and reorganizing the finance department to improve segregation of duties[199](index=199&type=chunk)[200](index=200&type=chunk) PART II. OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and other disclosures relevant to Urgent.ly Inc [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Urgent.ly Inc. is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not currently a party to any actions, claims, suits, or other legal proceedings that would individually or in the aggregate have a material adverse effect on its business, financial condition, or results of operations[206](index=206&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new risk factors, including potential Nasdaq delisting due to non-compliance and the adverse impact of significant share sales, such as through the ATM Program - The company received a notification from Nasdaq on March 19, 2025, regarding non-compliance with the Minimum Net Income Requirement and other Continued Listing Standards, posing a risk of delisting[208](index=208&type=chunk)[209](index=209&type=chunk) - Sales of a substantial number of common shares, including through the ATM Program or exercise of registration rights, could significantly reduce the market price of the common stock and cause dilution[211](index=211&type=chunk)[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds occurred during the fiscal quarter ended June 30, 2025 - No unregistered sales of equity securities or use of proceeds were reported[216](index=216&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to Urgent.ly Inc. for the reporting period - Not applicable[217](index=217&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Urgent.ly Inc. for the reporting period - Not applicable[218](index=218&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[219](index=219&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of this Quarterly Report on Form 10-Q, including corporate governance documents, employment/advisor agreements, the Sales Agreement for the ATM Program, and various certifications - Exhibits include amendments to the Certificate of Incorporation, Bylaws, Promotion Letter, Advisor Agreement, Sales Agreement for the ATM Program, and certifications (302 and 906)[221](index=221&type=chunk) [Signatures](index=35&type=section&id=Signatures) This section provides the official signatures for the Quarterly Report on Form 10-Q, confirming its submission - The report was signed by Matthew Booth, Chief Executive Officer (Principal Executive and Financial Officer) on August 13, 2025[226](index=226&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $31.7 million, marking an 8% decline year-over-year, primarily due to reduced dispatch volume from a top customer and the autonomous business [21][22] - Gross profit increased to $7.9 million, with a gross margin of 25%, up from 21.2% in the same period last year, driven by margin improvement initiatives [22] - Non-GAAP operating loss was approximately $199,000, a 97% improvement compared to $6.2 million in the prior year [27] Business Line Data and Key Metrics Changes - The company secured two renewals for 2025, contributing to revenue stability, with 40% of the renewals completed so far [38] - The focus on the insurance market has led to a new contract with a premium insurance provider and ongoing negotiations with two additional providers [13][41] Market Data and Key Metrics Changes - The company is targeting mid-tier insurance providers, which are currently underserved, and has initiated a sales plan to reach these markets [12][41] - The AI-powered market analyzer, Spark, has been launched to enhance service performance across urban markets, showing significant improvements in wait times [15][16] Company Strategy and Development Direction - The company aims to return to growth by expanding existing B2B incident business and developing new customer partnerships [18] - Continued investment in AI and machine learning is seen as critical for maintaining competitive advantage and improving customer satisfaction [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving non-GAAP operating breakeven in Q3 2025, with expectations for revenue growth to begin in late Q3 or early Q4 [29][31] - The company anticipates a flattening of seasonal revenue drops due to AI and machine learning initiatives [32] Other Important Information - As of June 30, 2025, the company had cash and cash equivalents of $4.8 million and a principal debt balance of $55.3 million [27][28] - The company has entered into a sales agreement to sell shares through an ATM program, although no shares have been sold yet [28] Q&A Session Summary Question: When should revenue growth from the premium insurance provider be expected? - Management expects to see revenue growth from the premium insurance provider by the end of Q3 or beginning of Q4, targeting 20% to 30% growth post-autonomous business [31] Question: Will the new revenue overwhelm typical seasonality in Q4? - Management noted that the seasonality curve is flattening due to AI work, suggesting continued revenue growth despite typical seasonal drops [32] Question: How much of the revenue do the renewals account for? - Renewals completed so far account for 40% of the revenue expected for the year [38] Question: What is the status of the sales cycle for new contracts? - The sales cycle is consistent with expectations, with larger companies moving slower and smaller companies moving faster [44] Question: When will nonrecurring transaction costs head towards zero? - Management indicated that the specific costs related to the autonomous business are expected to cease, with minimal ongoing costs anticipated [47]

[Company Overview and Q2 2025 Performance](index=1&type=section&id=Company%20Overview%20and%20Q2%202025%20Performance) [Q2 2025 Financial and Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Highlights) Q2 2025 saw an 8% revenue decrease to $31.7 million, yet gross profit rose 8% and operating losses improved significantly Q2 2025 vs Q2 2024 Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :-------------------------- | :----------------- | :----------------- | :--------- | | Revenue | $31.7 | $34.5 | -8% | | Gross Profit | $7.9 | $7.3 | +8% | | Gross Margin | 25% | 21% | +4 ppts | | GAAP Operating Expenses | $10.1 | $15.7 | -36% | | Non-GAAP Operating Expenses | $8.1 | $13.5 | -40% | | GAAP Operating Loss | $(2.2) | $(8.3) | +74% (Improvement) | | Non-GAAP Operating Loss | $(0.2) | $(6.2) | +97% (Improvement) | - Approximately **191,000 dispatches** completed in Q2 2025[5](index=5&type=chunk) - Consumer satisfaction score of **4.7 out of 5 stars**[5](index=5&type=chunk) - Launched **SPARK**, Urgently's proprietary AI-powered market analyzer designed to elevate service performance[5](index=5&type=chunk) [Year-to-Date 2025 Financial and Operational Highlights](index=1&type=section&id=Year-to-Date%202025%20Financial%20and%20Operational%20Highlights) Year-to-date revenue decreased 16% to $63.0 million, while gross margin improved and operating losses were substantially reduced YTD 2025 vs YTD 2024 Highlights | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | YoY Change | | :-------------------------- | :------------------ | :------------------ | :--------- | | Revenue | $63.0 | $74.6 | -16% | | Gross Profit | $15.9 | $16.7 | -5% | | Gross Margin | 25% | 22% | +3 ppts | | GAAP Operating Expenses | $20.5 | $33.4 | -38% | | Non-GAAP Operating Expenses | $16.5 | $28.0 | -41% | | GAAP Operating Loss | $(4.6) | $(16.7) | +72% (Improvement) | | Non-GAAP Operating Loss | $(0.6) | $(11.3) | +95% (Improvement) | - Approximately **380,000 dispatches** completed year-to-date 2025[10](index=10&type=chunk) - Consumer satisfaction score of **4.6 out of 5 stars** year-to-date[10](index=10&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO highlighted sequential revenue growth, reduced operating losses, and technology leadership driving customer satisfaction and renewals - Achieved **sequential quarterly revenue growth** for Q2 2025 compared to Q1 2025[2](index=2&type=chunk) - Delivered a reduction in GAAP and non-GAAP operating loss ahead of expectations, making progress towards **positive cash flow**[2](index=2&type=chunk) - Utilizes a digitally native platform leveraging **AI and machine learning** to create predictive models, enhancing performance[2](index=2&type=chunk) - Technology leadership is reflected in significant **contract renewals, expansions, and new customers**[2](index=2&type=chunk) [About Urgently](index=2&type=section&id=About%20Urgently) Urgently provides digital roadside and mobility assistance technology using an AI-powered platform for global transportation sectors - Urgently is a U.S.-based leading provider of **digital roadside and mobility assistance technology** and services[1](index=1&type=chunk) - Its mission is to help everyone move safely and without disruption through proactive technology[7](index=7&type=chunk) - Operates a digitally native software platform combining location-based services, real-time data, AI, and machine-to-machine communication[7](index=7&type=chunk) - Powers roadside assistance solutions for leading brands across **automotive, insurance, and telematics verticals** globally[7](index=7&type=chunk) [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The statements show declining revenue but improved gross margins and significantly lower operating losses due to reduced expenses [Three Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Q2 2025 revenue decreased 8%, but gross profit grew 8% and operating expenses fell 36%, improving net loss by 52% Statement of Operations (Quarterly) | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Revenue | $31,687 | $34,537 | -8.25% | | Cost of Revenue | $23,754 | $27,207 | -12.69% | | Gross Profit | $7,933 | $7,330 | +8.23% | | Operating Expenses | $10,086 | $15,670 | -35.76% | | Operating Loss | $(2,153) | $(8,340) | +74.18% (Improvement) | | Net Loss | $(5,612) | $(11,667) | +51.91% (Improvement) | | Loss per share, basic and diluted | $(4.50) | $(10.43) | +56.85% (Improvement) | [Six Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Year-to-date revenue fell 16%, but a 38% reduction in operating expenses led to a 72% improvement in operating loss Statement of Operations (Year-to-Date) | Metric (in thousands) | YTD 2025 | YTD 2024 | YoY Change | | :-------------------- | :------- | :------- | :--------- | | Revenue | $62,959 | $74,629 | -15.63% | | Cost of Revenue | $47,037 | $57,948 | -18.83% | | Gross Profit | $15,922 | $16,681 | -4.55% | | Operating Expenses | $20,522 | $33,369 | -38.52% | | Operating Loss | $(4,600) | $(16,688) | +72.44% (Improvement) | | Net Loss | $(11,096) | $(24,682) | +55.03% (Improvement) | | Loss per share, basic and diluted | $(9.18) | $(22.12) | +58.59% (Improvement) | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased while the stockholders' deficit widened, reflecting reduced cash and accumulated losses as of June 30, 2025 Balance Sheet Highlights | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------ | :---------------- | :----- | | Total Assets | $40,152 | $54,071 | -25.74% | | Cash and cash equivalents | $4,830 | $14,179 | -65.93% | | Accounts receivable, net | $19,873 | $22,890 | -13.18% | | Capitalized software costs, net | $5,943 | $4,637 | +28.17% | | Total Liabilities | $81,460 | $85,741 | -4.99% | | Revolving credit facility, net | $6,155 | — | N/A | | Current portion of long-term debt | $4,257 | $14,257 | -70.14% | | Long-term debt, net | $42,270 | $39,883 | +5.98% | | Total Stockholders' Deficit | $(41,308) | $(31,670) | -30.42% (Worsening) | [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) [Definition and Purpose of Non-GAAP Measures](index=2&type=section&id=Definition%20and%20Purpose%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures to provide a clearer view of core operating performance by excluding certain non-cash and non-recurring items - **Non-GAAP Operating Expenses** exclude depreciation, amortization, stock-based compensation, and non-recurring charges[9](index=9&type=chunk)[11](index=11&type=chunk) - **Non-GAAP Operating Loss** excludes depreciation, amortization, stock-based compensation, and non-recurring charges[11](index=11&type=chunk) - These measures are used to evaluate ongoing operations, for internal planning, and to provide comparability with past performance[8](index=8&type=chunk) - Investors are encouraged to review related GAAP financial measures and reconciliations and not rely on any single measure[9](index=9&type=chunk) [Reconciliation of Operating Expenses](index=6&type=section&id=Reconciliation%20of%20Operating%20Expenses) This reconciliation adjusts GAAP operating expenses for items like depreciation and stock-based compensation to derive non-GAAP figures [Three Months Ended June 30, 2025 vs 2024 (Operating Expenses)](index=6&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Expenses)) Q2 2025 Non-GAAP operating expenses were $8.1 million, a 40% year-over-year improvement after excluding $2.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Expenses (Quarterly) | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Operating expenses (GAAP) | $10,086 | $15,670 | -35.76% | | Less: Depreciation and amortization | $(1,079) | $(1,104) | -2.26% | | Less: Stock-based compensation | $(382) | $(438) | -12.78% | | Less: Non-recurring transaction costs | $(178) | $(207) | -13.99% | | Less: Restructuring costs | $(315) | $(425) | -25.88% | | Non-GAAP operating expenses | $8,132 | $13,496 | -39.75% | [Six Months Ended June 30, 2025 vs 2024 (Operating Expenses)](index=6&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Expenses)) Year-to-date Non-GAAP operating expenses were $16.5 million, a 41% improvement after excluding $4.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Expenses (Year-to-Date) | Metric (in thousands) | YTD 2025 | YTD 2024 | YoY Change | | :-------------------------------- | :------- | :------- | :--------- | | Operating expenses (GAAP) | $20,522 | $33,369 | -38.52% | | Less: Depreciation and amortization | $(2,065) | $(2,206) | -6.48% | | Less: Stock-based compensation | $(920) | $(1,156) | -20.42% | | Less: Non-recurring transaction costs | $(553) | $(933) | -40.73% | | Less: Restructuring costs | $(489) | $(1,124) | -56.49% | | Non-GAAP operating expenses | $16,495 | $27,950 | -41.05% | [Reconciliation of Operating Loss](index=6&type=section&id=Reconciliation%20of%20Operating%20Loss) This reconciliation adjusts GAAP operating loss for non-cash and non-recurring items to calculate the non-GAAP operating loss [Three Months Ended June 30, 2025 vs 2024 (Operating Loss)](index=6&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Loss)) Q2 2025 Non-GAAP operating loss was $(0.2) million, a 97% year-over-year improvement after adding back $2.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Loss (Quarterly) | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Operating loss (GAAP) | $(2,153) | $(8,340) | +74.18% (Improvement) | | Add: Depreciation and amortization | $1,079 | $1,104 | -2.26% | | Add: Stock-based compensation | $382 | $438 | -12.78% | | Add: Non-recurring transaction costs | $178 | $207 | -13.99% | | Add: Restructuring costs | $315 | $425 | -25.88% | | Non-GAAP operating loss | $(199) | $(6,166) | +96.77% (Improvement) | [Six Months Ended June 30, 2025 vs 2024 (Operating Loss)](index=6&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Loss)) Year-to-date Non-GAAP operating loss was $(0.6) million, a 95% improvement after adding back $4.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Loss (Year-to-Date) | Metric (in thousands) | YTD 2025 | YTD 2024 | YoY Change | | :-------------------------------- | :------- | :------- | :--------- | | Operating loss (GAAP) | $(4,600) | $(16,688) | +72.44% (Improvement) | | Add: Depreciation and amortization | $2,065 | $2,206 | -6.48% | | Add: Stock-based compensation | $920 | $1,156 | -20.42% | | Add: Non-recurring transaction costs | $553 | $933 | -40.73% | | Add: Restructuring costs | $489 | $1,124 | -56.49% | | Non-GAAP operating loss | $(573) | $(11,269) | +94.91% (Improvement) | [Corporate Information and Disclosures](index=2&type=section&id=Corporate%20Information%20and%20Disclosures) [Earnings Conference Call Details](index=2&type=section&id=Earnings%20Conference%20Call%20Details) The company will host a conference call on August 12, 2025, to discuss its Q2 2025 financial results - The conference call will be held on **August 12, 2025, at 5:00 p.m. Eastern Time**[6](index=6&type=chunk) - Live access is available via phone at 1-877-317-6789 (USA) or 1-412-317-6789 (International)[6](index=6&type=chunk) - A replay will be available via webcast on Urgently's Investor Relations website[6](index=6&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements subject to significant risks and uncertainties detailed in the company's SEC filings - The press release contains "forward-looking statements" subject to **substantial risks and uncertainties**[13](index=13&type=chunk) - Actual results could differ materially due to factors like ability to raise funds, history of losses, and customer retention[14](index=14&type=chunk) - Risks are detailed in SEC filings, including the **annual report on Form 10-K** and quarterly reports on Form 10-Q[14](index=14&type=chunk) - Urgently disclaims any obligation to update forward-looking statements[14](index=14&type=chunk)