Intends to Request HearingASHBURN, Va., Sept. 22, 2025 (GLOBE NEWSWIRE) -- Urgent.ly Inc. (Nasdaq: ULY) (“Urgently” or the “Company”), a U.S.-based leading provider of digital roadside and mobility assistance technology and services, announced today that The Nasdaq Stock Market LLC (“Nasdaq”) formally notified the Company that, based upon its non-compliance with Nasdaq Listing Rule 5550(b) (the “Rule”), which requires a minimum of $500,000 in net income (in the most recent fiscal year or two of the last thr ...

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)

Core Viewpoint - Urgent.ly Inc. reported its second quarter financial results for 2025, showing sequential revenue growth and improved operating losses, indicating progress towards positive cash flow and operational efficiency [2][7]. Financial Performance - Revenue for Q2 2025 was $31.7 million, an 8% decrease year over year, while year-to-date revenue was $63.0 million, a 16% decrease year over year [7][17]. - Gross profit for Q2 2025 was $7.9 million, an 8% increase year over year, with a gross margin of 25%, up from 21% in the prior year [7][17]. - GAAP operating loss for Q2 2025 was $2.2 million, a 74% improvement compared to $8.3 million in the prior year [7][17]. - Non-GAAP operating loss for Q2 2025 was $0.2 million, a 97% improvement compared to $6.2 million in the prior year [7][17]. Operational Highlights - Approximately 191,000 dispatches were completed in Q2 2025, with a consumer satisfaction score of 4.7 out of 5 stars [7]. - The company launched SPARK, an AI-powered market analyzer aimed at enhancing service performance in urban markets [7]. Expense Management - GAAP operating expenses for Q2 2025 were $10.1 million, a 36% improvement from $15.7 million in the prior year [7][17]. - Non-GAAP operating expenses for Q2 2025 were $8.1 million, a 40% improvement from $13.5 million in the prior year [7][17]. Balance Sheet Overview - As of June 30, 2025, total assets were $40.2 million, down from $54.1 million at the end of 2024 [15][16]. - Current liabilities totaled $29.3 million, a decrease from $37.6 million at the end of 2024 [15][16].

Core Viewpoint - Urgently Inc. is set to release its second quarter 2025 financial results on August 12, 2025, and will host a conference call to discuss these results [1][2]. Group 1: Financial Results Announcement - The financial results for the second quarter ended June 30, 2025, will be announced prior to the conference call [2]. - The conference call is scheduled for August 12, 2025, at 5:00 p.m. Eastern Time [2]. Group 2: Participation Details - Participants can access the conference call via webcast through Urgently's Investor Relations website [3]. - Telephone participation is available by dialing 1-877-317-6789 for the USA or 1-412-317-6789 for international callers [3]. - A replay of the call will be available via webcast on Urgently's Investor Relations website [3]. Group 3: Company Overview - Urgently is a leading provider of digital roadside and mobility assistance technology and services, focusing on safe and disruption-free movement for drivers [4]. - The company utilizes a digitally native software platform that integrates location-based services, real-time data, AI, and machine-to-machine communication for roadside assistance solutions [4]. - Urgently aims to enhance user experiences and customer satisfaction through innovative and transparent connected mobility assistance services on a global scale [4].

Group 1 - Urgently Inc. announced the appointment of Michael Port as Chief Financial Officer, effective June 6, 2025, succeeding Timothy C. Huffmyer [1] - Michael Port previously held the position of Senior Vice President of Finance at Urgently and has extensive experience in the automotive industry, including roles at Lordstown Motors Corp. and Energy Focus Inc. [2][3] - The CEO of Urgently expressed confidence in Port's capabilities, highlighting his experience in high-growth industries as a strong fit for the company's current growth phase [3] Group 2 - Urgently is a leading provider of digital roadside and mobility assistance technology, focusing on enhancing driver safety and experience through innovative technology [3] - The company's platform integrates location-based services, real-time data, AI, and machine-to-machine communication to deliver connected roadside assistance solutions [3]

Summary of Urgently Inc. Conference Call Company Overview - **Company**: Urgently Inc. - **Founded**: 2013 - **Business Model**: Technology-driven roadside assistance service aimed at improving customer experience compared to traditional services like AAA [5][6] Key Industry Insights - **Market Size**: The roadside assistance market is approximately $25 billion globally, with about $12.5 billion in the U.S. [45] - **Competitors**: - A family business from Boston with $1.2 billion in insurance contracts [16] - AAA, which has a long-standing presence in the subscription model [17] - **Growth Opportunity**: Urgently aims to capture a share of the subscription market, which is currently dominated by AAA [18][47] Financial Performance - **Revenue**: Approximately $150 million, with a significant portion derived from long-term contracts with OEMs and fleet companies [7][21] - **Margins**: Improved from 2% to 25% over time, with a goal of reaching 25-30% in the long run [15][36] - **Recurring Revenue**: Business model closely resembles Annual Recurring Revenue (ARR) due to long-term contracts, although revenue is generated per job [24][26] Technology and Innovation - **Technological Edge**: Utilizes real-time analytics, machine learning, and dynamic pricing to optimize service delivery and customer experience [9][55] - **Geospatial Database**: A sophisticated system that tracks vehicles and service providers in real-time, enhancing operational efficiency [13][14] - **Future Developments**: Plans to expand into connected vehicle data services, which could notify customers of potential vehicle issues before they occur [45][46] Market Strategy - **Go-to-Market Approach**: Engages in pilot programs with potential clients, gradually increasing service penetration [42][44] - **Customer Base**: Currently has high penetration rates with existing OEM contracts, with opportunities for new programs [63] Economic Considerations - **Impact of Tariffs**: Initial concerns about tariffs affecting vehicle parts have not significantly impacted sales; dealers reported strong sales following tariff announcements [27][28] - **Profitability by Vehicle Type**: Service types, rather than vehicle types, determine profitability; tire changes and battery services are more profitable than towing [29][30] Future Outlook - **Growth Drivers**: Focus on signing new clients and expanding service offerings to increase revenue [65] - **Financial Health**: The company is nearing non-GAAP operating breakeven and aims for positive cash generation in the coming quarters [61][69] Conclusion - **Management's Confidence**: The management team expresses optimism about future growth and profitability, emphasizing their commitment to achieving financial milestones and expanding market presence [68][69]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements for the period ended March 31, 2025 [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Key Financial Position Metrics | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $6,285 | $14,054 | | Accounts receivable, net | $23,506 | $22,890 | | Total current assets | $32,816 | $40,756 | | Total assets | $46,432 | $54,071 | | Total current liabilities | $32,512 | $37,594 | | Total liabilities | $82,510 | $85,741 | | Total stockholders' deficit | $(36,078) | $(31,670) | - The company's **cash and cash equivalents decreased significantly** from $14,054 thousand at December 31, 2024, to $6,285 thousand at March 31, 2025[15](index=15&type=chunk) - Total assets and total liabilities also decreased, while the **stockholders' deficit widened**[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Quarterly Performance Summary | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $31,272 | $40,092 | | Cost of revenue | $23,283 | $30,741 | | Gross profit | $7,989 | $9,351 | | Operating expenses | $10,436 | $17,699 | | Operating loss | $(2,447) | $(8,348) | | Net loss | $(5,484) | $(13,015) | | Basic and diluted EPS | $(4.69) | $(11.69) | - **Revenue decreased by 22% year-over-year**, from $40.1 million in Q1 2024 to $31.3 million in Q1 2025[18](index=18&type=chunk)[131](index=131&type=chunk) - Despite the revenue decline, **operating loss significantly improved** from $(8.3) million to $(2.4) million, and net loss decreased from $(13.0) million to $(5.5) million, primarily due to a substantial reduction in operating expenses[18](index=18&type=chunk)[131](index=131&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) Changes in Stockholders' Deficit | Metric (in thousands) | December 31, 2024 | March 31, 2025 | | :-------------------- | :---------------- | :------------- | | Total Stockholders' Deficit | $(31,670) | $(36,078) | | Net loss | — | $(5,484) | | Issuance of common stock in connection with Highbridge loan amendment | — | $570 | | Stock-based compensation expense | — | $538 | - The total stockholders' deficit increased from $(31,670) thousand to $(36,078) thousand, primarily due to the **net loss of $(5,484) thousand**[21](index=21&type=chunk) - This was partially offset by an increase in additional paid-in capital from stock-based compensation and common stock issuance related to a loan amendment[21](index=21&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Quarterly Cash Flow Summary | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(5,166) | $(9,712) | | Net cash used in investing activities | $(1,202) | $23,729 | | Net cash used in financing activities | $(1,401) | $(18,066) | | Net decrease in cash, cash equivalents and restricted cash | $(7,769) | $(4,014) | - **Net cash used in operating activities improved** from $(9.7) million in Q1 2024 to $(5.2) million in Q1 2025[23](index=23&type=chunk)[159](index=159&type=chunk) - Net cash used in investing activities shifted from a **$23.7 million inflow** in Q1 2024 to a **$1.2 million outflow** in Q1 2025[23](index=23&type=chunk)[159](index=159&type=chunk) - Net cash used in financing activities also decreased significantly from $(18.1) million to $(1.4) million[23](index=23&type=chunk)[159](index=159&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization](index=9&type=section&id=1.%20Organization) - Urgent.ly Inc. is a connected mobility assistance software platform that completed a **1-for-12 reverse stock split** effective March 17, 2025[25](index=25&type=chunk)[26](index=26&type=chunk) - The company has a history of recurring operating losses and an accumulated deficit of $204.3 million, raising **substantial doubt about its ability to continue as a going concern**[28](index=28&type=chunk) - In Q1 2025, the company undertook a restructuring, **eliminating 23 employees (13% of total)** to reduce operating expenses, resulting in $174 thousand in charges[31](index=31&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - There have been **no material changes** to the company's significant accounting policies from its audited financial statements for the year ended December 31, 2024[32](index=32&type=chunk) - The company operates in a **single reportable segment**: Mobility Assistance Services[44](index=44&type=chunk) - The company has **significant customer concentration**, with 53% and 54% of revenue in Q1 2025 and Q1 2024, respectively, earned from a small number of customers[40](index=40&type=chunk) [3. Revenue](index=11&type=section&id=3.%20Revenue) - The company generates substantially all revenue from roadside assistance services (RAS) via its software platform, primarily through full-service outsourcing[47](index=47&type=chunk)[120](index=120&type=chunk) Revenue by Type | Revenue Type (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Full-service outsourcing—flat rate | $31,120 | $38,150 | | Full-service outsourcing—claim cost pass-through | $3 | $3 | | Membership | $99 | $145 | | Software licensing arrangements | $42 | $1,335 | | Professional services | $8 | $459 | | **Total Revenue** | **$31,272** | **$40,092** | - Capitalized contract costs to obtain and fulfill contracts are deferred as other non-current assets and amortized over the contract term or expected period of benefit[54](index=54&type=chunk)[55](index=55&type=chunk) [4. Fair Value Measurements](index=12&type=section&id=4.%20Fair%20Value%20Measurements) Fair Value of Financial Instruments | Financial Instrument (in thousands) | Fair Value as of March 31, 2025 (Total) | Fair Value as of December 31, 2024 (Total) | | :---------------------------------- | :-------------------------------------- | :----------------------------------------- | | Money market funds | $2,277 | $8,853 | | Contingent purchase consideration | $(2,848) | $(2,925) | | Derivative liability | $(471) | — | - The derivative liability, representing a contingent promise to issue additional consideration, was recorded at **$471 thousand** as of March 31, 2025[61](index=61&type=chunk)[62](index=62&type=chunk) [5. Intangible Assets](index=13&type=section&id=5.%20Intangible%20Assets) Net Carrying Amount of Intangible Assets | Intangible Asset (in thousands) | March 31, 2025 (Net Carrying Amount) | December 31, 2024 (Net Carrying Amount) | | :------------------------------ | :----------------------------------- | :-------------------------------------- | | Acquired technology | $3,975 | $4,365 | | Domain name | $31 | $31 | | **Total Intangible Assets** | **$4,006** | **$4,396** | - Amortization expense for intangible assets was **$390 thousand** for Q1 2025, a decrease from $852 thousand in the prior year period[64](index=64&type=chunk) [6. Accrued Expenses](index=14&type=section&id=6.%20Accrued%20Expenses) Breakdown of Accrued Expenses | Accrued Expense (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------------- | :------------- | :---------------- | | Accrued service provider costs | $4,059 | $4,447 | | Accrued compensation | $855 | $1,194 | | Accrued interest | $1,705 | $1,547 | | Contingent purchase consideration | $2,848 | $2,925 | | Accrued lender fees | — | $3,247 | | Accrued VAT and income taxes | $2,406 | $3,139 | | **Total Accrued Expenses** | **$15,638** | **$19,838** | - **Total accrued expenses decreased** from $19.8 million to $15.6 million, primarily due to the absence of accrued lender fees and other reductions[66](index=66&type=chunk) [7. Debt Arrangements](index=14&type=section&id=7.%20Debt%20Arrangements) Principal Debt Balances | Debt Type (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Structural Capital term loan | — | $10,000 | | Highbridge Capital term loan | $41,600 | $40,000 | | MidCap Financial revolving credit facility | $10,892 | — | | 2022 convertible promissory notes | $4,257 | $4,257 | | **Total principal debt** | **$56,749** | **$54,257** | - The company **fully repaid the Structural Capital term loan** in February 2025 using proceeds from a new MidCap Financial revolving credit facility[69](index=69&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[75](index=75&type=chunk) - A new **MidCap Financial revolving credit facility** was entered into on February 26, 2025, for up to $20 million[75](index=75&type=chunk)[76](index=76&type=chunk) [8. Stock-based Compensation](index=16&type=section&id=8.%20Stock-based%20Compensation) - The 2023 Equity Incentive Plan and 2023 Employee Stock Purchase Plan were increased on January 1, 2025, by **46,106 and 9,221 shares**, respectively[79](index=79&type=chunk)[80](index=80&type=chunk) - Stock-based compensation expense **decreased from $718 thousand in Q1 2024 to $538 thousand in Q1 2025**[83](index=83&type=chunk) [9. Income Taxes](index=16&type=section&id=9.%20Income%20Taxes) - The company continues to **fully reserve its U.S.-based deferred tax amounts** as of March 31, 2025, due to its cumulative operating loss[88](index=88&type=chunk) [10. Commitments and Contingencies](index=17&type=section&id=10.%20Commitments%20and%20Contingencies) - Management believes there are **no unresolved claims and litigation** that will materially affect the company's financial position or operations[89](index=89&type=chunk) [11. Leases](index=17&type=section&id=11.%20Leases) Lease Costs | Lease Cost (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Lease cost | $148 | $300 | | Sublease income | — | $(69) | Remaining Lease Maturities | Remaining Lease Maturities (in thousands) | Amount | | :---------------------------------------- | :----- | | 2025 | $350 | | 2026 | $284 | | 2027 | $218 | | Total lease payments | $852 | | Present value of lease liabilities | $777 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and operational results for the first quarter of 2025 [Overview](index=19&type=section&id=Overview) - Urgent.ly is a leading connected mobility assistance software platform, leveraging location-based services, real-time data, and AI[95](index=95&type=chunk)[96](index=96&type=chunk) - As of March 31, 2025, the platform serves **53 Customer Partners** and over **75,000 Service Provider vehicle drivers**[96](index=96&type=chunk) - Revenue is primarily generated from Customer Partners on a per-incident basis, membership programs, and SaaS solutions[97](index=97&type=chunk) [Key Factors Affecting Our Performance](index=19&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) - **New Customer Partner acquisition and retention** are crucial for revenue growth, margin improvement, and profitability[99](index=99&type=chunk)[102](index=102&type=chunk) - Continued investment in innovation, including proprietary technology and machine learning, is essential to maintain a competitive advantage[103](index=103&type=chunk)[104](index=104&type=chunk) - The company expects **operating expenses to decrease in the short term** due to a judicious staffing model and realignment efforts[105](index=105&type=chunk) - The business experiences **seasonality**, with higher demand during summer and winter holidays and during economic downturns[107](index=107&type=chunk)[108](index=108&type=chunk) [Key Business Metrics](index=20&type=section&id=Key%20Business%20Metrics) - Consumer satisfaction score was **4.6 out of 5 stars** for both Q1 2025 and Q1 2024, reflecting a strong focus on service experience[111](index=111&type=chunk) Number of Dispatches | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------- | :-------------------------------- | :-------------------------------- | | Number of Dispatches | 189,000 | 231,000 | - The number of completed dispatches **decreased by approximately 18% year-over-year**, from 231,000 in Q1 2024 to 189,000 in Q1 2025[113](index=113&type=chunk) [Non-GAAP Financial Measures](index=21&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP Operating Metrics | Non-GAAP Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------- | :-------------------------------- | :-------------------------------- | | Non-GAAP operating expenses | $8,363 | $14,454 | | Non-GAAP operating loss | $(374) | $(5,103) | - **Non-GAAP operating expenses decreased by 42%** year-over-year, and **non-GAAP operating loss significantly improved** from $(5.1) million to $(0.4) million[116](index=116&type=chunk)[119](index=119&type=chunk) [Components of Results of Operations](index=22&type=section&id=Components%20of%20Results%20of%20Operations) - Revenue is primarily generated from full-service outsourcing of roadside assistance services[120](index=120&type=chunk)[124](index=124&type=chunk) - Cost of revenue mainly consists of fees paid to Service Providers, technology hosting, and direct call center support personnel[122](index=122&type=chunk) - Operating expenses are categorized into Research and Development, Sales and Marketing, Operations and Support, and General and Administrative[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - Other income (expense), net includes interest, changes in fair value of liabilities, and gain/loss on debt extinguishment[130](index=130&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Comparison of Quarterly Results | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change ($) | Change (%) | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Total revenue | $31,272 | $40,092 | $(8,820) | (22)% | | Cost of revenue | $23,283 | $30,741 | $(7,458) | (24)% | | Gross profit | $7,989 | $9,351 | $(1,362) | (15)% | | Operating loss | $(2,447) | $(8,348) | $5,901 | 71% | | Net loss | $(5,484) | $(13,015) | $7,531 | 58% | - **Revenue decreased by $8.8 million (22%)** primarily due to the non-renewal of one auto manufacturer Customer Partner and reduced dispatch volume[132](index=132&type=chunk) - **Operating expenses decreased significantly** across all categories, largely driven by reductions in Otonomo-related expenses and operational efficiencies[136](index=136&type=chunk)[138](index=138&type=chunk)[140](index=140&type=chunk)[142](index=142&type=chunk) - Other expense, net, decreased by $1.6 million (35%) due to lower interest expense and the absence of a prior-year loss on debt extinguishment[146](index=146&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's history of losses and negative cash flows raise **substantial doubt about its ability to continue as a going concern**[147](index=147&type=chunk) - As of March 31, 2025, cash, cash equivalents, and restricted cash totaled **$6.4 million**, with a principal debt balance of **$56.7 million**[148](index=148&type=chunk) - Recent financing activities include extending loan maturities and entering into a **new $20 million MidCap Credit Agreement** in February 2025[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - The company consistently maintains a working capital deficit and undertook further employee reductions in Q1 2025 to align expenses with revenue[156](index=156&type=chunk)[158](index=158&type=chunk) [Cash Flows](index=27&type=section&id=Cash%20Flows) - **Net cash used in operating activities decreased** to $5.2 million in Q1 2025 from $9.7 million in Q1 2024, driven by a lower net loss[159](index=159&type=chunk)[160](index=160&type=chunk)[163](index=163&type=chunk) - Net cash used in investing activities was $1.2 million in Q1 2025, a significant shift from **$23.7 million provided in Q1 2024**[159](index=159&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - **Net cash used in financing activities decreased** to $1.4 million in Q1 2025 from $18.1 million in Q1 2024[159](index=159&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Contractual Obligations and Commitments](index=28&type=section&id=Contractual%20Obligations%20and%20Commitments) - Principal commitments include contractual cash obligations under credit facilities, long-term debt, and operating leases[168](index=168&type=chunk) [Emerging Growth Company Status](index=28&type=section&id=Emerging%20Growth%20Company%20Status) - As an 'emerging growth company,' Urgent.ly has elected to **delay the adoption of new or revised accounting pronouncements**[169](index=169&type=chunk) [Critical Accounting Estimates](index=28&type=section&id=Critical%20Accounting%20Estimates) - Management believes there are **no material changes** to the critical accounting estimates previously disclosed in the Annual Report[171](index=171&type=chunk) [Recent Accounting Pronouncements](index=29&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 2 'Summary of Significant Accounting Policies' for a description of new accounting standards[173](index=173&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from market risk disclosures as a smaller reporting company - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls, identified material weaknesses, and ongoing remediation plans [Evaluation of Disclosure Controls and Procedures](index=29&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2025, due to material weaknesses[175](index=175&type=chunk) - Despite the weaknesses, management concluded the financial statements **fairly state the financial position** in conformity with GAAP[175](index=175&type=chunk) [Material Weaknesses in Internal Control over Financial Reporting](index=29&type=section&id=Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) - Two material weaknesses were identified: lack of **segregation of duties** and ineffective **IT general controls**[177](index=177&type=chunk) [Remediation Plans for Material Weaknesses in Internal Control over Financial Reporting](index=29&type=section&id=Remediation%20Plans%20for%20Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) - Remediation plans include designing new controls for IT and reorganizing the finance department to address segregation of duties[178](index=178&type=chunk)[179](index=179&type=chunk) - These material weaknesses will not be considered remediated until remedial controls operate for a sufficient period and are tested effectively[180](index=180&type=chunk) [Changes in Internal Control over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No other changes in internal control over financial reporting were identified during Q1 2025, apart from the ongoing remediation efforts[181](index=181&type=chunk) [Inherent Limitations on Effectiveness of Controls and Procedures](index=30&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) - Management acknowledges that control systems provide only **reasonable, not absolute, assurance** and are subject to inherent limitations[182](index=182&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently involved in any legal proceedings that would materially affect its financial position or operations[185](index=185&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section highlights a new risk factor concerning non-compliance with Nasdaq listing standards - No material changes to principal risk factors, other than those related to **Nasdaq listing standards**[186](index=186&type=chunk) [Nasdaq Listing Standards](index=31&type=section&id=Nasdaq%20Listing%20Standards) - On March 19, 2025, the company received a notification from Nasdaq for **failing to meet Continued Listing Standards**[187](index=187&type=chunk) - A compliance plan was submitted, but there is **no assurance of acceptance or regaining compliance**, which could lead to delisting[188](index=188&type=chunk)[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the reporting period - None[190](index=190&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - Not applicable[191](index=191&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - Not applicable[192](index=192&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended March 31, 2025[194](index=194&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of this Quarterly Report on Form 10-Q - The report includes various exhibits such as corporate documents, employment agreements, and amendments to loan and security agreements[196](index=196&type=chunk) [Signatures](index=34&type=section&id=Signatures) The report is duly signed by the company's Chief Executive Officer and Chief Financial Officer - The report is signed by Matthew Booth, Chief Executive Officer, and Timothy C. Huffmyer, Chief Financial Officer, on May 14, 2025[202](index=202&type=chunk)

Financial Data and Key Metrics Changes - The company reported revenue of $31.3 million for Q1 2025, a decline of 22% or $9 million from the same quarter last year, primarily due to reduced dispatch volume from non-renewed customer partners and the Autonimo business [17] - Gross profit was $8 million, down $1.4 million year-over-year, but gross margin improved to 25.5% from 23% in the same period last year, attributed to service dispatch mix and technology optimizations [18] - Non-GAAP operating loss for the quarter was approximately $374,000, an improvement of 93% compared to $5.1 million in the prior year [21] Business Line Data and Key Metrics Changes - The company achieved record gross margin of 25.5%, aligning with its mid-term outlook of 25% to 30% [6] - Non-GAAP operating expenses decreased by 42% to $8.4 million from $14.5 million in the prior period, reflecting operational efficiencies [20] Market Data and Key Metrics Changes - The company secured its first renewal for 2025 with a major fleet management partner, indicating strong relationships in the market [9] - The company anticipates a shift in the insurance market towards a dual-source model, which could drive growth as it reenters this vertical [12] Company Strategy and Development Direction - The company aims to return to growth by expanding its B2B incident business, maintaining non-GAAP operating breakeven, and transforming the roadside solutions market through product innovations [14] - A new VP of Sales has been hired to target mid-market insurance companies, indicating a strategic focus on this segment [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive sequential revenue growth starting in Q3 2025 as new contracts come online [8] - The company is focused on sustaining non-GAAP operating loss breakeven and moving closer to cash flow positive [6] Other Important Information - As of March 31, 2025, the company had cash and cash equivalents of $6.4 million and a net principal debt balance of $56.7 million [22] - The company capitalized approximately $1.1 million in software enhancements during the first quarter, with similar capitalizations expected in Q2 2025 [23] Q&A Session Summary Question: Can you provide updates on the new OEM partner and the mid-market insurance opportunity? - Management highlighted the successful renewal with a major fleet partner and readiness to reenter the mid-market insurance space with improved technology and unit economics [28] Question: Are there more cost reductions expected in operating expenses? - Management indicated that while most significant reductions were made, there is still room for further efficiencies throughout 2025 [30][31] Question: What is the outlook for operating expenses with new market entries? - Operating expenses are expected to slightly decrease throughout the year, with potential additional costs related to new contracts being manageable [38] Question: Can you clarify the cash reduction and its implications? - The cash reduction was primarily due to debt repayments and accrued fees, with expectations of normalized levels moving forward [39][40] Question: What is the expectation for sequential growth in the second half of the year? - Management anticipates modest sequential growth, with any significant changes being communicated through future guidance [44]