Getaround Reports Full Year 2023 Results
- Appointment of new leadership including Chairperson, CEO, and COO to drive strategic growth and profitability
- Financial results for 2023 show improvement in Adjusted EBITDA loss and revenue growth driven by HyreCar acquisition
- Restructured operations to reduce Total Operating Expenses by over $25 million annually and acquired HyreCar assets to strengthen gig carsharing business
- Launched next generation AI-based TrustScore model and new partnership with TransUnion to enhance trust and reduce costs
- Decided to suspend consumer car sharing operations in New York State due to high insurance costs under the New York Peer-to-Peer Carsharing Act
- Suspension of operations in New York State due to insurance costs may impact market presence and revenue
- Decrease in Trip Contribution Margin from 47% to 40% in 2023 raises concerns about profitability
- GAAP Net Loss of $113.9 million in 2023 indicates financial challenges despite improvements in Adjusted EBITDA loss
Insights
The strategic changes at Getaround, including the leadership transition and the capital infusion from Mudrick Capital, indicate a pivotal moment for the company. The appointment of Jason Mudrick as Chairperson and Eduardo Iniguez as CEO, combined with the recent restructuring efforts, aims to pivot the company towards profitability. The focus on cost reduction, such as the $25 million cut in operating expenses and the acquisition of HyreCar assets to bolster the gig carsharing segment, are moves likely to be welcomed by investors seeking operational efficiency and growth potential.
However, the decision to suspend operations in New York due to prohibitive insurance costs under the P2P Carsharing Act presents a dual-edged sword. On one hand, it exemplifies the company's commitment to financial discipline by avoiding unsustainable costs. On the other hand, it signals a retreat from a potentially lucrative market, which could have implications for future growth and market share. The short-term benefits of cost savings must be weighed against the long-term impact on brand presence and expansion opportunities.
The 22% year-over-year revenue increase and the 16% improvement in GAAP Net Loss are positive signs, yet the decrease in Trip Contribution Margin from 47% to 40% raises questions about the sustainability of the revenue quality. Investors will need to monitor how the changes in the TrustScore model and the discontinuation of high-risk revenue streams will affect the company's financial health moving forward.
Getaround's financial highlights for the year reflect a company in transition, with efforts to streamline operations and improve its bottom line. The 22% increase in total revenues and the 20% improvement in Adjusted EBITDA loss are indicative of successful cost optimization strategies. However, the decrease in Trip Contribution Margin suggests that while the company is reducing costs, it may also be facing challenges in maintaining profitability per trip.
The strategic acquisition of HyreCar assets is a noteworthy development, potentially enhancing Getaround's position in the gig economy and its partnership with Uber. This move could be a significant driver of future revenue growth, especially as the gig economy continues to expand. However, the integration of these assets and the management of associated insurance liabilities will be a critical factor in determining the success of this acquisition.
Investors should also consider the impact of the suspended operations in New York on the company's valuation. While this decision may improve short-term financial metrics by reducing liabilities, it could limit Getaround's long-term growth prospects in a major urban market. The trade-off between immediate financial stability and future expansion is a key consideration for stakeholders.
The regulatory environment, as evidenced by the New York Peer-to-Peer Carsharing Act, has a significant impact on Getaround's operational strategy. The requirement for carsharing providers to maintain insurance limits fifty times greater than those for rental car companies poses a formidable barrier to entry and sustainability in the market. Getaround's suspension of services in New York highlights the influence of local regulations on the sharing economy and raises concerns about potential future legislative challenges in other jurisdictions.
For investors, this regulatory hurdle in New York may serve as a cautionary tale of the legal complexities that sharing economy companies like Getaround face. The ability to navigate these complexities will be important for Getaround's expansion and profitability. The company's proactive approach to managing these challenges may be seen as a positive indicator of its risk management capabilities, but it also underscores the need for a robust legal strategy to mitigate such risks.
Understanding the legal landscape will be essential for Getaround as it seeks to grow in a highly regulated industry. Stakeholders should monitor regulatory developments closely, as they can have substantial implications for the company's operational freedom and profitability.
New leadership focused on strategic path to profitability supported by recent capital raise and organizational streamlining
Early 2024 Leadership Transition
In January 2024, Getaround’s Board appointed Jason Mudrick, Chief Investment Officer of Mudrick Capital Management, to the position of Chairperson of the board. This appointment follows Mudrick Capital’s agreement to provide
“I believe there is tremendous potential in Getaround’s business model,” said Mudrick. “With proper leadership, adequate funding and thoughtful capital allocation, we should be able to scale the platform Getaround built over the past decade exponentially. The near term focus is to stabilize the business to reduce losses, and once stabilized to grow the business thoughtfully. I want to thank Sam Zaid, Getaround’s co-founder and former CEO, for his years of service getting Getaround to where it is today. I’m very excited Eduardo has taken on the role of CEO – his financial and operating discipline is exactly what Getaround needs today.”
“I joined Getaround at a time when the Company is undergoing a transformative journey. The leadership transition includes several other senior management appointments and notably, Jason Mudrick’s appointment to the position of Chairperson of the board,” said Iniguez. “I have been working closely with the board and management team to set near-term priorities that - broadly speaking - include strategic expansion in profitable markets globally, product development that maximizes ROI and improving our financial discipline across the company.”
2023 Full Year Business Highlights
Iniguez went on to say, “Getaround has a tremendous opportunity ahead to increase its market share and deliver a truly differentiated service offering. At the same time, there are multiple challenges to achieving our full potential – some are specific to our company, and some relate to evolving macro trends. The company has taken critical steps to address these challenges head on which we expect to accelerate our path to profitability.”
-
Restructured operations to reduce Total Operating Expenses by more than
$25 million - Acquired HyreCar assets to build on our expanding Uber relationship and solidify our leadership position in gig carsharing
- Launched the next generation of our proprietary AI-based TrustScore model and announced a new relationship with TransUnion to reduce cost of claims and insurance
On March 23, 2024, Getaround decided to suspend its consumer car sharing operations in
2023 Full Year Financial Highlights
“In May, 2023 we completed the acquisition of HyreCar assets to expand our gig carsharing business. This acquisition was the primary driver of our 2023 revenue growth,” said Tom Alderman, Getaround’s Chief Financial Officer. “In December 2022, we deployed a new version of our Getaround TrustScore to improve the trust and safety of our marketplace. This improved risk model with dynamic pricing resulted in a reduction in high-risk revenue and Gross Booking Value while simultaneously improving our profitability. The benefit of the risk improvements were offset in 2023 by an increase in trip support costs related to our operations in
Alderman went on to say, “In 2023 we showed significant improvement in our Adjusted EBITDA loss driven by our continued focus on cost optimization measures. Throughout the year we also recognized significant benefits from the business restructuring announced in February 2023.”
-
Total Revenues of
$72.7 million 22% year-over-year -
Gross Booking Value of
$204 million 16% year-over-year -
Gross margin from Service revenue was
85% , consistent with the prior year -
Trip Contribution Margin was
40% , down from47% the prior year -
GAAP Net Loss of
$113.9 million 16% improvement from the same period last year -
Adjusted EBITDA loss of
$72.0 million 20% improvement from the same period last year
About Getaround
Offering a digital experience, Getaround (NYSE: GETR) makes sharing cars and trucks simple through its proprietary cloud and in-car Connect® technology. The company empowers consumers to shift away from car ownership through instant and convenient access to desirable, affordable, and safe cars from entrepreneurial hosts. Getaround’s on-demand technology enables a contactless experience — no waiting in line at a car rental facility, manually completing paperwork or meeting anyone to collect or drop off car keys. Getaround’s mission is to utilize its peer-to-peer marketplace to help solve some of the most pressing challenges facing the world today, including environmental sustainability and access to economic opportunity. Launched in 2011, Getaround is available today in more than 1,000 cities across 8 countries including
Forward-Looking Statements
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. In particular, the statements contained in the quotations of our Chief Executive Officer, Chairman and Chief Financial Officer with respect to expectations regarding the Company’s opportunities to increase its market share and accelerate its path to profitability, the Company’s potential for success, and the Company’s expectation the additional trip support costs it experienced in 2023 will not continue in 2024 may constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical facts and generally contain words such as "believes”, "expects”, "may”, "will”, "should”, "seeks”, "approximately”, "intends”, "plans”, "estimates”, "anticipates”, and other expressions that are predictions of or indicate future events. Although the forward-looking statements contained in this press release are based upon information available at the time the statements are made and reflect management's good faith beliefs, forward-looking statements inherently involve known and unknown risks, uncertainties and other factors, including the dilutive effect of future financings, which may cause the actual results, performance or achievements to differ materially from anticipated future results.
These risks and uncertainties include those described in our filings which we make with the SEC from time to time, including the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2023 which we filed today.. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law.
| Consolidated Balance Sheet | ||||||
| (In thousands, except share and per share data) | December 31, 2023 |
December 31, 2022 |
||||
| Assets | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 15,624 |
$ | 64,294 |
||
| Restricted cash | — |
3,600 |
||||
| Accounts receivable, net | 853 |
533 |
||||
| Prepaid expenses and other current assets | 10,131 |
6,084 |
||||
| Total Current Assets | $ | 26,608 |
$ | 74,511 |
||
| Property and equipment, net | 8,504 |
10,451 |
||||
| Operating lease right-of-use assets, net | 12,162 |
13,284 |
||||
| Goodwill | 95,869 |
92,728 |
||||
| Intangible assets, net | 13,358 |
11,028 |
||||
| Deferred tax assets | — |
46 |
||||
| Other assets | 4,635 |
3,371 |
||||
| Total Assets | $ | 161,136 |
$ | 205,419 |
||
| Liabilities and Stockholders’ Equity | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 15,552 |
$ | 3,652 |
||
| Accrued host payments and insurance fees | 13,192 |
11,780 |
||||
| Operating lease liabilities, current | 2,268 |
1,923 |
||||
| Notes payable, current | 19,904 |
1,211 |
||||
| Warrant commitment liability | — |
320 |
||||
| Other accrued liabilities | 48,107 |
37,360 |
||||
| Deferred revenue | 684 |
698 |
||||
| Total Current Liabilities | $ | 99,707 |
$ | 56,944 |
||
| Notes payable, net of current portion | 2,122 |
3,198 |
||||
| Convertible notes payable ( |
40,469 |
56,842 |
||||
| Operating lease liabilities (net of current portion) | 15,487 |
17,715 |
||||
| Deferred tax liabilities | 212 |
973 |
||||
| Warrant liability | 20 |
247 |
||||
| Total Liabilities | $ | 158,017 |
$ | 135,919 |
||
| Commitments and contingencies (Note 13) | ||||||
| Stockholders’ Equity | ||||||
| Common stock, |
$ |
9 |
$ |
9 |
||
| Additional paid-in capital | 859,163 |
845,888 |
||||
| Stockholder notes | (8,284) |
(8,284) |
||||
| Accumulated deficit | (875,955) |
(762,009) |
||||
| Accumulated other comprehensive (loss) income | 28,186 |
(6,104) |
||||
| Total Stockholders’ Equity | $ | 3,119 |
$ | 69,500 |
||
| Total Liabilities and Stockholders’ Equity | $ | 161,136 |
$ | 205,419 |
||
| Consolidated Statements of Operations and Comprehensive Loss | ||||||
| (In thousands, except per share data) | Year ended December 31, 2023 |
Year ended December 31, 2022 |
||||
| Service revenue | $ | 71,152 |
$ | 58,108 |
||
| Lease revenue | 1,528 |
1,347 |
||||
| Total Revenues | $ | 72,680 |
$ | 59,455 |
||
| Costs and Expenses | ||||||
| Cost of revenue (exclusive of amortization and depreciation shown separately below): |
||||||
| Service | $ | 6,660 |
$ | 5,445 |
||
| Lease | 143 |
126 |
||||
| Sales and marketing | 18,539 |
34,525 |
||||
| Operations and support | 65,487 |
56,634 |
||||
| Technology and product development | 16,051 |
24,677 |
||||
| General and administrative | 51,150 |
58,800 |
||||
| Depreciation and amortization | 14,080 |
10,141 |
||||
| Transaction costs | — |
26,807 |
||||
| Impairment loss on goodwill | — |
23,269 |
||||
| Total Operating Expenses | $ | 172,110 |
$ | 240,424 |
||
| Loss from Operations | $ | (99,430) |
$ | (180,969) |
||
| Other Income (Expense) | ||||||
| Convertible promissory note and note payable fair value adjustment | (17,026) |
93,029 |
||||
| Warrant liability fair value adjustment | 266 |
(31,749) |
||||
| Interest income (expense), net | 481 |
(14,181) |
||||
| Other income (expense), net | 974 |
(2,833) |
||||
| Total Other Income (Expense) | $ | (15,305) |
$ | 44,266 |
||
| Loss before Benefit for Income Taxes | $ | (114,735) |
$ | (136,703) |
||
| Income Tax Benefit | (789) |
(638) |
||||
| Net Loss | $ | (113,946) |
$ | (136,065) |
||
| Change in fair value of the convertible instrument liability | 32,247 |
— |
||||
| Foreign Currency Translation (Loss) Gain | 2,043 |
(8,387) |
||||
| Comprehensive Loss | $ | (79,656) |
$ | (144,452) |
||
| Net Loss Per Share Attributable to Stockholders: | ||||||
| Basic | (1.23) |
(5.00) |
||||
| Diluted | (1.23) |
(5.00) |
||||
| Weighted average shares outstanding (Basic and Diluted) | 92,685 |
27,222 |
||||
Non-GAAP Financial Measures
We use Trip Contribution Profit, Trip Contribution Margin and Adjusted EBITDA, each of which are non-GAAP financial measures, in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with the Getaround Board concerning our financial performance. Our definitions of these non-GAAP financial measures may differ from definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar financial measures. Furthermore, these financial measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Thus, these non-GAAP financial measures should be considered in addition to, and not as a substitute for, or in isolation from, financial measures prepared in accordance with GAAP.
We compensate for these limitations by providing a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view the non-GAAP financial measures in conjunction with their most directly comparable GAAP financial measures.
Trip Contribution Profit and Trip Contribution Margin
Trip Contribution Profit is defined as our gross profit from Service revenue adjusted for: (i) cost of Service revenue, amortization and depreciation; and (ii) trip support costs, which consist of auto insurance expenses, claims support and customer relations costs. We define Trip Contribution Margin as Trip Contribution Profit divided by Service revenue recognized during the period presented. We believe these measures are leading indicators of our ability to achieve profitability and sustain or increase it over time. Trip Contribution Profit and Trip Contribution Margin are measures we use to understand and evaluate our operating performance and trends. Trip Contribution Profit and Trip Contribution Margin have generally increased over the periods as Service revenue increased while costs considered in the calculation of Trip Contribution Profit decreased as a percentage of Total Revenues.
The following tables present a reconciliation of Trip Contribution Profit from the most comparable GAAP measure, gross profit from Service revenue, for the periods presented:
| (In thousands, except percentages) | Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
||||
| Gross profit from Service revenue | $ | 60,640 |
$ | 49,679 |
||
| Gross margin from Service revenue |
|
|
||||
| Plus: Cost of Service revenue, amortization and depreciation | 3,852 |
2,984 |
||||
| Less: Trip support costs | (36,173) |
(25,259) |
||||
| Trip Contribution Profit | $ | 28,319 |
$ | 27,404 |
||
| Trip Contribution Margin |
|
|
||||
| (In thousands, except percentages) | Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
||||
| Service revenue | $ | 71,152 |
$ | 58,108 |
||
| Less: Cost of Service revenue, net of amortization and depreciation | (6,660) |
(5,445) |
||||
| Less: Cost of Service revenue, amortization and depreciation | (3,852) |
(2,984) |
||||
| Gross profit from Service revenue | $ | 60,640 |
$ | 49,679 |
||
| Gross margin from Service revenue |
|
|
||||
Adjusted EBITDA
We define Adjusted EBITDA as net income adjusted for: (i) fair value adjustment of instruments carried at fair value; (ii) interest income (expense) and other income (expense); (iii) income tax provision/benefit; (iv) depreciation and amortization; (v) stock-based compensation expense; (vi) contingent compensation; (vii) transaction costs; (viii) impairment loss on goodwill and (ix) certain expenses determined to be incurred outside of the regular course of business which includes: certain restructuring costs, certain legal settlements and 2022 Business Combination-related legal fees, and investments in preparation of going public, initial implementation projects and transaction costs associated with proposed 2022 Business Combinations that are not subject to deferral. Adjusted EBITDA is a key performance measure that we use to assess operating performance and operating leverage of our business. As Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. Accordingly, we believe that Adjusted EBITDA provides useful to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. The items excluded from our Adjusted EBITDA calculation are either non-cash in nature, or not driven by core results of recurring operations and therefore not predictable or recurring, rendering comparisons with prior periods and competitors less meaningful.
The following tables present a reconciliation of Adjusted EBITDA from the most comparable GAAP measure, Net Loss, for the periods presented:
| (In thousands) | Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
||||
| Net Loss | $ | (113,946) |
$ | (136,065) |
||
| Plus: warrant liability, convertible promissory note and note payable fair value adjustment | 16,760 |
(61,280) |
||||
| Plus: interest and other income (expense), net | (1,455) |
17,014 |
||||
| Minus: income tax benefit | (789) |
(638) |
||||
| Plus: depreciation and amortization | 14,080 |
10,141 |
||||
| Plus: stock-based compensation | 12,578 |
9,127 |
||||
| Plus: contingent compensation(1) | — |
430 |
||||
| Plus: transaction costs | — |
26,807 |
||||
| Plus: impairment loss on goodwill | — |
23,269 |
||||
| Plus: expense not incurred in the regular course of business(2) | 754 |
21,478 |
||||
| Adjusted EBITDA | $ | (72,018) |
$ | (89,717) |
||
| (1) Represents retention-based compensation related to a 2019 acquisition | ||||||
| (2) Of the total amount of the adjustment in 2022, |
||||||
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Investors:
investors@getaround.com
Media:
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Source: Getaround
FAQ
Who was appointed as the Chairperson of Getaround's board in January 2024?
What was the primary driver of Getaround's revenue growth in 2023?
Why did Getaround decide to suspend its consumer car sharing operations in New York State?
What was the Gross Booking Value for Getaround in 2023?
What was the GAAP Net Loss for Getaround in 2023?
