Customer and Service Provider Network - As of June 30, 2023, the company has 58 Customer Partners and over 66,000 participating Service Provider vehicle drivers in its network[108]. Financial Performance - Total revenue for Q2 2023 increased by $0.6 million, or 1%, to $44.0 million compared to $43.3 million in Q2 2022, driven by higher rates charged to existing Customer Partners[143]. - Net loss for Q2 2023 was $6.4 million, compared to a net loss of $18.5 million in Q2 2022, indicating improved financial performance[142]. - Total revenue for the six months ended June 30, 2023, increased by $10.1 million, or 12%, to $93.6 million from $83.5 million in the same period of 2022, driven by increased dispatch volume and rates[159]. - Gross profit for Q2 2023 was $9.3 million, a 184% increase from $3.3 million in Q2 2022, attributed to rate increases and reduced first call costs[147]. - Gross profit increased to $18.5 million for the six months ended June 30, 2023, compared to $5.7 million in the same period of 2022, representing a growth of 225%[161]. Operating Expenses - Non-GAAP operating expenses for the three months ended June 30, 2023, were $13.4 million, down from $17.8 million in 2022, reflecting a focus on cost management[128]. - Cost of revenue decreased by $5.4 million, or 13%, to $34.7 million in Q2 2023 from $40.1 million in Q2 2022, primarily due to a decline in dispatch volume[146]. - Research and development expenses decreased by $0.8 million, or 17%, to $3.7 million in Q2 2023 from $4.4 million in Q2 2022, reflecting a reduction in employee-related expenses[148]. - Sales and marketing expenses decreased by $0.6 million, or 39%, to $0.9 million in Q2 2023 from $1.4 million in Q2 2022, driven by lower employee-related costs and reduced marketing activities[150]. - Operations and support expenses decreased by $3.6 million, or 37%, to $6.0 million in Q2 2023 from $9.7 million in Q2 2022, due to migration of customer support resources and reduced employee costs[152]. - General and administrative expenses increased by $1.3 million, or 38%, to $4.8 million in Q2 2023 from $3.5 million in Q2 2022, primarily due to transaction-related expenses associated with a planned merger[155]. - Cost of revenue decreased by $2.8 million, or 4%, to $75.0 million for the six months ended June 30, 2023, from $77.8 million in the same period of 2022[160]. - Research and development expenses decreased by $1.0 million, or 12%, to $7.4 million for the six months ended June 30, 2023, from $8.4 million in the same period of 2022[162]. - Sales and marketing expenses decreased by $0.9 million, or 32%, to $1.9 million for the six months ended June 30, 2023, from $2.8 million in the same period of 2022[164]. - Operations and support expenses decreased by $5.7 million, or 30%, to $13.2 million for the six months ended June 30, 2023, from $18.9 million in the same period of 2022[166]. - General and administrative expenses increased by $4.9 million, or 66%, to $12.2 million for the six months ended June 30, 2023, from $7.4 million in the same period of 2022[168]. Cash Flow and Debt - As of June 30, 2023, the company had $13.0 million in cash, cash equivalents, and restricted cash, with a total debt balance of $123.1 million[175]. - Net cash used in operating activities for the six months ended June 30, 2023, was $8.8 million, compared to $24.6 million in the same period of 2022[182]. - Net cash provided by financing activities for the six months ended June 30, 2023, was $14.4 million, primarily due to proceeds from the 2023 Notes and the Structural Loan Agreement[185]. Merger and Strategic Initiatives - The pending merger with Otonomo is expected to close on October 19, 2023, with Otonomo's shareholders owning approximately 39.7% of the combined company[112]. - The company anticipates that the merger will enhance customer service experience by improving data capabilities and features[109]. - The company is focused on investing in proprietary technology and machine learning to optimize service provider supply models and operational processes[118]. - The company expects operating expenses to decrease in the short term but increase over the long term as targeted investments in growth continue[118]. Customer Satisfaction and Market Trends - Consumer satisfaction score (CSAT) remained stable at 4.5 for both the three and six months ended June 30, 2023[122]. - The company has historically generated higher levels of roadside assistance service requests during summer and winter months due to increased consumer travel[119]. Foreign Currency Transactions - The volatility of exchange rates is influenced by various unpredictable factors, impacting the company's foreign currency transactions[196]. - The company has not engaged in hedging foreign currency transactions to date, but may consider it in the future[196]. - A hypothetical 10% change in the relative value of the U.S. dollar to other currencies would not have materially affected the company's financial statements[197]. Going Concern - The company has substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows from operations[172].
Urgent.ly (ULY) - 2023 Q2 - Quarterly Report