Financial Performance - Total revenue decreased by $13.7 million, or 10%, to $129.2 million in 2025 from $142.9 million in 2024, primarily due to a decrease in dispatch volumes and the divestiture of Otonomo[343]. - The company reported a non-GAAP operating loss of $267,000 in 2025, a substantial improvement from a loss of $17.201 million in 2024[327]. - Gross profit increased to $32.8 million, with a gross margin of 25% in 2025, compared to $31.6 million and a 22% margin in 2024, attributed to higher revenue per dispatch and reduced service provider costs[345]. Operating Expenses - The company generated non-GAAP operating expenses of $33.043 million in 2025, down from $48.760 million in 2024, reflecting a significant reduction[325]. - Research and development expenses decreased by $6.7 million, or 48%, to $7.2 million in 2025 from $13.9 million in 2024, reflecting operational efficiencies and reduced costs related to Otonomo[346]. - Sales and marketing expenses decreased by $3.0 million, or 50%, to $2.9 million in 2025 from $5.9 million in 2024, primarily due to reduced expenses associated with Otonomo[349]. - Operations and support expenses decreased by $3.7 million, or 27%, to $9.8 million in 2025 from $13.4 million in 2024, driven by the migration of customer support resources to lower-cost locations[351]. - General and administrative expenses decreased by $4.1 million, or 19%, to $17.2 million in 2025 from $21.3 million in 2024, due to reductions in various operational costs[353]. Cash Flow and Liquidity - The company reported a net cash used in operating activities of $7.4 million for the year ended December 31, 2025, primarily due to a net loss of $20.4 million[377]. - For the year ended December 31, 2025, net cash used in investing activities was $5.2 million, attributed to $5.0 million in investments in capitalized software[379]. - Net cash provided by financing activities for the year ended December 31, 2025, was $3.6 million, including net proceeds of $2.9 million from the issuance of common stock[382][383]. - As of December 31, 2025, the company had $5.3 million in liquid assets, with a principal debt balance of $64.4 million maturing through July 31, 2026[360]. - The company has consistently maintained a working capital deficit, with current liabilities exceeding current assets due to its business model[370]. Debt and Financing - The company amended its Structural Loan Agreement and Second Lien Loan Agreement multiple times in early 2025, extending maturity dates to March 31, 2025, and July 31, 2026[361][363]. - In February 2025, the company entered into a MidCap Credit Agreement with a commitment amount not exceeding $20.0 million, using available loans to repay the Structural Loan Agreement[362]. Customer and Market Impact - The company maintained a Customer Satisfaction Score (CSAT) of 4.6 for the year ended December 31, 2025, up from 4.5 in 2024[319]. - The company has 58 Customer Partners and over 74,300 participating Service Provider vehicle drivers in its network as of December 31, 2025[304]. - The company experienced a significant impact on revenue due to one Customer Partner, which accounted for approximately 25% of revenue in 2023, not renewing its agreement[311]. Future Outlook - The company anticipates that the merger with Otonomo Technologies Ltd. will be consummated in the first half of 2026, transitioning to a privately held entity[302]. - The company expects to continue reducing operating expenses while aligning fluctuations with targeted investments in growth[313]. - The company expects to capitalize software costs between $5.0 million and $6.0 million in 2026 for internal development and Customer Partner implementations[381]. - The company may seek additional capital through equity securities or debt financing arrangements to fund future activities[371]. - The company expressed substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows from operations[359].
Urgent.ly (ULY) - 2025 Q4 - Annual Report