Zoomcar Q3 results: Revenue slips 19% to $2.4 mn, bottomline improves

The firm said that net revenue declined due to lower number of days booked, resulting in decreased gross billings as Zoomcar prioritised higher-margin bookings in support of its cost reduction efforts

Bangalore-headquartered and NASDAQ-listed self-drive rental car company Zoomcar posted a 19 per cent decline in its December quarter net revenue to $2.4 million, while its adjusted EBITDA loss was $4 million compared to $5.2 million in the same period last year. Gross profit increased to a record $0.3 million compared to a gross loss of $0.3 million in the same period last year as a result of trip fulfilment cost reductions driven by collective improvements in efficiency and lower Host accident-related reimbursements that consistently showed improvement over fiscal 2023.

The improvement in adjusted EBITDA was because of a broad-based cost reduction and efficiency initiatives that reduced the cost of revenue, technology and development costs, and operating expenses.

The company said that the net revenue declined due to a lower number of days booked, resulting in decreased gross billings as Zoomcar prioritised higher-margin bookings in support of its cost reduction efforts.

“Our third fiscal quarter results capped a strong performance in our ongoing efficiency efforts as we achieved record gross profit and non-GAAP contribution profit while also paving the way for meaningful revenue growth over the next several quarters,” said Greg Moran, Chief Executive Officer and Co-Founder of Zoomcar. “The period also marked an important milestone with our public listing on NASDAQ following our successful business combination. As we look ahead to 2024, we expect a meaningful return to growth with materially improved profitability as we now have the right infrastructure in place to scale our operations efficiently.”

Zoomcar’s operating expenses decreased by 24 per cent to $2.2 million compared to $2.9 million in the same period last year. It decreased sales and marketing costs and technology and development costs. Gross Booking Value (GBV) was $6.5 million, compared to $8.3 million in the same period last year. The decrease in GBV was a result of a focus on booking level profitability (contribution margin) improvements at the expense of volume growth.

Zoomcar said that it is focusing on expanding beyond India. “We are making steady progress in our efforts to expand beyond India. Egypt continues to scale bookings while building toward a sustainable non-GAAP contribution margin at the country level. In Indonesia, we remain focused on building the appropriate mix of supply to attract higher volumes of demand to the platform on a consistent basis. We remain committed to further investment into these markets across 2024 and look forward to exploring additional opportunities for new country expansion later in the year,” it said in a statement on Thursday.

The company presents financial statements in the US generally accepted accounting principles (GAAP), but has also supplemented that with non-GAAP measures of financial performance in their statement – contributing margin, earnings before interest, taxes, depreciation and amortisation (EBITDA), and adjusted EBITDA. “We believe these non-GAAP financial measures are useful to investors in assessing our operating performance,” Zoomcar said.

GAAP net income was $14.4 million, compared to an $8.7 million net loss in the same period last year.

For the 2024 calendar year, Zoomcar said that, “Based on initial performance in calendar year 2024 to-date as well as anticipated business growth expected in the coming months, the Company projects net revenue to range between $17.0 million and $20.0 million for the calendar year ended December 31, 2024, representing an increase of approximately 70% to 100% compared to calendar year 2023.” The Company also expects to achieve an annualised adjusted EBITDA run rate between $2.0 million and $4.0 million in calendar Q4 2024.