Rubicon Reports Fourth Quarter and Full Year 2022 Financial Results
Rubicon Technologies, Inc. (NYSE: RBT) reported its Q4 and full-year 2022 financial results, showing a 16% increase in annual revenue to $675.4 million and 14% growth in Adjusted Gross Profit to $53.3 million. Q4 revenue reached $166.0 million, up 2%, with Gross Profit improving by 17% to $6.8 million. The net loss decreased significantly to $18.0 million from $30.3 million year-over-year. Rubicon expects to achieve positive Adjusted EBITDA in Q4 2023, supported by strategic partnerships and cost reduction efforts. Despite the promising financial outlook, the company recorded a net loss of $281.8 million for 2022, impacted by nonrecurring expenses related to its merger.
- 16% increase in annual revenue to $675.4 million.
- 14% growth in Adjusted Gross Profit to $53.3 million.
- Net loss improvement from $30.3 million in Q4 2021 to $18.0 million in Q4 2022.
- Expecting positive Adjusted EBITDA in Q4 2023.
- Strategic contract extensions with Walmart and Sweetgreen.
- Raised over $39 million in net capital and extended debt maturities.
- Net loss increased to $281.8 million in 2022 from $73.2 million in 2021.
- Adjusted EBITDA worsened to negative $74.3 million from negative $57.7 million in 2021.
- Cost pressures due to increased software expenses related to partnerships.
Full year 2022 Adjusted Gross Profit grew to
Fourth Quarter 2022 Financial Highlights
-
Revenue was
$166.0 million 2% higher compared to$163.3 million -
Gross Profit was
$6.8 million 17% higher compared$5.8 million -
Adjusted Gross Profit was
$13.4 million -
Net loss was
$18.0 million $30.3 million -
Adjusted EBITDA was negative
$17.6 million $19.5 million
Full Year 2022 Financial Highlights
-
Revenue was
$675.4 million 16% higher compared to$583.1 million -
Gross Profit was
$25.0 million 17% compared to$21.4 million -
Adjusted Gross Profit was
$53.3 million 14% compared to the$46.9 million -
Net loss for the full year 2022 was
$281.8 million $73.2 million -
Adjusted EBITDA for the full year 2022 was a negative
$74.3 million $57.7 million
Operational and Business Highlights
- Rubicon made substantial progress on the ‘Bridge to Profitability’ plan during the quarter. This plan seeks to increase financial flexibility, curtail lower-ROI investments, achieve cost reductions, and increase profitability. The Company expects to generate positive Adjusted EBITDA for the fourth quarter 2023.
-
Rubicon raised over
$39 million - In the fourth quarter, Rubicon signed a two-year extension and expansion of its contract with Walmart, which has been a flagship customer since 2013.
- Also in Q4 2022, Rubicon secured a three-year extension with Sweetgreen, the mission-driven restaurant brand which seeks to serve healthy food at scale. The partnership is enabling Rubicon to continue to expand Sweetgreen’s waste diversion efforts and provide enhanced account management as its lead partner for waste, recycling, and composting services.
-
In February, Rubicon established a multi-year channel sales partnership with
Bartec , for the license of Rubicon’s products across theUK , furthering progress in the Company’s global expansion. -
In March, Rubicon announced significant growth within its RUBICONSmartCity business, adding 11 new customers in Q4 2022 including the cities of
Rochester, NY ;Manchester, NH :Surprise, AZ ; andRockville, MD . These cities chose RUBICONSmartCity to help them save money and run more efficient and effective solid waste collection operations.
“We are very proud of our achievements to date and are excited to begin our journey as a publicly traded company. It is a testament to the dedication and diligence of our team that we have already demonstrated significant progress against the goals we set out during our Q3 2022 earnings call,” said
Fourth-Quarter Review
In the fourth quarter, Revenue totaled
Gross Profit in the fourth quarter was
In the fourth quarter, Adjusted Gross Profit was
Net loss was
In the fourth quarter, Adjusted EBITDA was negative
Full-Year 2022 Review
Revenue for the full year 2022 totaled
Gross Profit in 2022 totaled
In 2022, Adjusted Gross Profit totaled
Net losses totaled
Adjusted EBITDA totaled a negative
Strategic Progress
To address cash needs and increase working capital, the Company is currently in discussions with financing sources to potentially raise new equity and recapitalize debt prior to its maturity. In parallel, management is implementing additional measures to further reduce spending and extend cash availability. Though there is no guarantee the Company will be able to successfully implement any or all of its current plans, these initiatives are intended to increase financial flexibility and push out debt maturities with the ultimate goal of realizing greater shareholder value by improving Rubicon’s financial position and future liquidity.
Rubicon is aiming to accelerate its progress to profitability, investing in its leading digital marketplace and suite of products, and further developing the strategic vision and execution plan for Rubicon’s next phase of growth. Rubicon has increased focus on operational efficiencies and working to accelerate cost reduction measures across the organization, with a goal of thoughtfully and diligently optimizing margins across the portfolio. The Company will share additional information on its “bridge to profitability” plan in the coming quarters as we continue to develop our plans.
Management Announcement
On
Webcast Information
The Rubicon Technologies management team will host a conference call to discuss its fourth quarter and full year 2022 financial results this afternoon,
About Rubicon
Non-GAAP Financial Measures
This earnings release contains “non-GAAP financial measures,” including Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA, which are supplemental financial measures that are not calculated or presented in accordance with generally accepted accounting principles (GAAP). Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies. Definitions of these non-GAAP financial measures, including explanations of the ways in which Rubicon’s management uses these non-GAAP measures to evaluate its business, the substantive reasons why Rubicon’s management believes that these non-GAAP measures provide useful information to investors and limitations associated with the use of these non-GAAP measures, are included under “Use of Non-GAAP Financial Measures” after the tables below. In addition, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included under “Reconciliations of Non-GAAP Financial Measures” after the tables below.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements. When used in this press release, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon current expectations, estimates, projections, and assumptions that, while considered reasonable by Rubicon and its management, are inherently uncertain; factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the outcome of any legal proceedings that may be instituted against Rubicon or others following the closing of the Mergers; 2) Rubicon’s ability to meet the NYSE’s listing standards following the consummation of the Mergers; 3) the risk that the Mergers disrupt current plans and operations of Rubicon as a result of consummation of the Mergers; 4) the ability to recognize the anticipated benefits of the Mergers, which may be affected by, among other things, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; 5) costs related to the Mergers; 6) changes in applicable laws or regulations; 7) the possibility that Rubicon may be adversely affected by other economic, business and/or competitive factors, including the impacts of the COVID-19 pandemic, geopolitical conflicts, such as the conflict between
RUBICON TECHNOLOGIES, INC AND SUBSIDIARIES |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
$ |
152,054 |
|
|
$ |
135,400 |
|
|
$ |
589,810 |
|
|
$ |
500,911 |
|
Recyclable commodity |
|
|
13,938 |
|
|
|
27,887 |
|
|
|
85,578 |
|
|
|
82,139 |
|
Total revenue |
|
|
165,992 |
|
|
|
163,287 |
|
|
|
675,388 |
|
|
|
583,050 |
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of amortization and depreciation): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
|
146,378 |
|
|
|
130,354 |
|
|
|
569,750 |
|
|
|
481,642 |
|
Recyclable commodity |
|
|
12,227 |
|
|
|
25,931 |
|
|
|
78,083 |
|
|
|
77,030 |
|
Total cost of revenue (exclusive of amortization and depreciation) |
|
|
158,595 |
|
|
|
156,285 |
|
|
|
647,833 |
|
|
|
558,672 |
|
Sales and marketing |
|
|
2,841 |
|
|
|
3,853 |
|
|
|
16,177 |
|
|
|
14,457 |
|
Product development |
|
|
9,114 |
|
|
|
9,135 |
|
|
|
37,450 |
|
|
|
22,485 |
|
General and administrative |
|
|
8,973 |
|
|
|
17,947 |
|
|
|
221,493 |
|
|
|
52,915 |
|
Amortization and depreciation |
|
|
1,392 |
|
|
|
2,170 |
|
|
|
5,723 |
|
|
|
7,128 |
|
Total Costs and Expenses |
|
|
180,915 |
|
|
|
189,390 |
|
|
|
928,676 |
|
|
|
655,657 |
|
Loss from Operations |
|
|
(14,923 |
) |
|
|
(26,103 |
) |
|
|
(253,288 |
) |
|
|
(72,607 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest earned |
|
|
1 |
|
|
|
- |
|
|
|
2 |
|
|
|
2 |
|
Gain on forgiveness of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,900 |
|
Loss on change in fair value of warrant liabilities |
|
|
(1,340 |
) |
|
|
(606 |
) |
|
|
(1,777 |
) |
|
|
(606 |
) |
Gain on change in fair value of earn-out liabilities |
|
|
1,400 |
|
|
|
- |
|
|
|
68,500 |
|
|
|
- |
|
Loss on change in fair value of derivatives |
|
|
4,279 |
|
|
- |
|
|
|
(72,641 |
) |
|
|
- |
|
|
Excess fair value over the consideration received for SAFE |
|
|
- |
|
|
|
- |
|
|
|
(800 |
) |
|
|
- |
|
Excess fair value over the consideration received for pre-funded warrant |
|
|
(14,000 |
) |
|
|
- |
|
|
|
(14,000 |
) |
|
|
- |
|
Gain on services fee settlements in connection with the Mergers |
|
|
12,126 |
|
|
|
- |
|
|
|
12,126 |
|
|
|
- |
|
Other expense |
|
|
(960 |
) |
|
|
(325 |
) |
|
|
(2,954 |
) |
|
|
(1,055 |
) |
Interest expense |
|
|
(4,600 |
) |
|
|
(3,994 |
) |
|
|
(16,863 |
) |
|
|
(11,455 |
) |
Total Other Income (Expense) |
|
|
(3,094 |
) |
|
|
(4,925 |
) |
|
|
(28,407 |
) |
|
|
(2,214 |
|
Loss Before Income Taxes |
|
|
(18,017 |
) |
|
|
(31,028 |
) |
|
|
(281,695 |
) |
|
|
(74,821 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
|
16 |
|
|
|
(709 |
) |
|
|
76 |
|
|
|
(1,670 |
) |
Net Loss |
|
|
(18,033 |
) |
|
|
(30,319 |
) |
|
|
(281,771 |
) |
|
|
(73,151 |
) |
Net loss attributable to |
|
|
- |
|
|
(30,319 |
) |
|
|
(228,997 |
) |
|
|
(73,151 |
) |
|
Net loss attributable to noncontrolling interests |
|
|
(5,688 |
) |
|
|
- |
|
|
|
(22,621 |
) |
|
|
- |
|
Net Loss Attributable to Class A Common Stockholders |
|
$ |
(12,345 |
) |
|
$ |
- |
|
|
$ |
(30,153 |
) |
|
$ |
- |
|
Loss per share - for the period from |
||||||||||||||||
Net loss per Class A Common share – basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.60 |
) |
Weighted average shares outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,885,394 |
|
Loss per share - for the three months ended |
||||||||||||||||
Net loss per Class A Common share – basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.24 |
) |
Weighted average shares outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,494,877 |
|
As a result of the Mergers with Founder SPAC consummated on
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
(in thousands) |
||||||||
|
|
2022 |
|
|
2021 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,079 |
|
|
$ |
10,617 |
|
Accounts receivable, net |
|
|
65,923 |
|
|
|
42,660 |
|
Contract assets |
|
|
55,184 |
|
|
|
56,984 |
|
Prepaid expenses |
|
|
10,466 |
|
|
|
6,227 |
|
Other current assets |
|
|
2,109 |
|
|
|
1,769 |
|
Related-party notes receivable |
|
|
7,020 |
|
|
|
- |
|
Total Current Assets |
|
|
150,781 |
|
|
|
118,257 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
2,644 |
|
|
|
2,611 |
|
Operating right-of-use assets |
|
|
2,827 |
|
|
|
3,920 |
|
Other noncurrent assets |
|
|
4,764 |
|
|
|
4,558 |
|
|
|
|
32,132 |
|
|
|
32,132 |
|
Intangible assets, net |
|
|
10,881 |
|
|
|
14,163 |
|
Total Assets |
|
$ |
204,029 |
|
|
$ |
175,641 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY / MEMBERS’ (DEFICIT) EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
75,113 |
|
|
$ |
47,531 |
|
Line of credit |
|
|
51,823 |
|
|
|
29,916 |
|
Accrued expenses |
|
|
108,002 |
|
|
|
65,538 |
|
Deferred compensation |
|
|
- |
|
|
|
8,321 |
|
Contract liabilities |
|
|
5,888 |
|
|
|
4,603 |
|
Operating lease liabilities, current |
|
|
1,880 |
|
|
|
1,675 |
|
Warrant liabilities |
|
|
20,890 |
|
|
|
1,380 |
|
Debt obligations, net of debt issuance costs |
|
|
23,415 |
|
|
|
22,666 |
|
Total Current Liabilities |
|
|
287,011 |
|
|
|
181,630 |
|
|
|
|
|
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
217 |
|
|
|
178 |
|
Operating lease liabilities, noncurrent |
|
|
1,826 |
|
|
|
3,770 |
|
Debt obligations, net of debt issuance costs |
|
|
49,814 |
|
|
|
51,000 |
|
Related-party debt obligations, net of debt issuance costs |
|
|
10,597 |
|
|
|
- |
|
Derivative liabilities |
|
|
826 |
|
|
|
- |
|
Earn-out liabilities |
|
|
5,600 |
|
|
|
- |
|
Other long-term liabilities |
|
|
2,590 |
|
|
|
367 |
|
Total Long-Term Liabilities |
|
|
71,470 |
|
|
|
55,315 |
|
Total Liabilities |
|
|
358,481 |
|
|
|
236,945 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ (Deficit) Equity/Members’ (Deficit) Equity: |
|
|
|
|
|
|
|
|
Common stock – Class A, par value of |
|
|
6 |
|
|
|
- |
|
Common stock – Class V, par value of |
|
|
12 |
|
|
|
- |
|
Preferred stock – par value of |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
34,658 |
|
|
|
- |
|
Members’ deficit |
|
|
- |
|
|
|
(61,304 |
) |
Accumulated deficit |
|
|
(337,875 |
) |
|
|
- |
|
Total stockholders’ deficit attributable to |
|
|
(303,199 |
) |
|
|
- |
|
Noncontrolling interests |
|
|
148,747 |
|
|
|
- |
|
Total Stockholders’ Deficit /Members’ Deficit |
|
|
(154,452 |
) |
|
|
(61,304 |
) |
Total Liabilities and Stockholders’ (Deficit) Equity/ Members’ (Deficit) Equity |
|
$ |
204,029 |
|
$ |
175,641 |
||
RUBICON TECHNOLOGIES, INC AND SUBSIDIARIES |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||
(in thousands) |
||||||||
|
|
2022 |
|
|
2021 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(281,771 |
) |
|
$ |
(73,151 |
) |
Adjustments to reconcile net loss to net cash flows from operating activities: |
|
|
|
|
|
|
|
|
Loss on disposal of property and equipment |
|
|
44 |
|
|
|
- |
|
Amortization and depreciation |
|
|
5,723 |
|
|
|
7,128 |
|
Amortization of debt issuance costs |
|
|
3,490 |
|
|
|
1,563 |
|
Paid-in-kind interest capitalized to principal of related-party debt obligations |
|
|
30 |
|
|
|
- |
|
Bad debt reserve |
|
|
(2,631 |
) |
|
|
4,926 |
|
Loss on change in fair value of warrant liabilities |
|
|
1,777 |
|
|
|
606 |
|
Loss on change in fair value of derivatives |
|
|
72,641 |
|
|
|
- |
|
Gain on change in fair value of earn-out liabilities |
|
|
(68,500 |
) |
|
|
- |
|
Excess fair value over the consideration received for SAFE |
|
|
800 |
|
|
|
- |
|
Excess fair value over the consideration received for pre-funded warrant |
|
|
14,000 |
|
|
|
- |
|
Loss on SEPA commitment fee settled in Class A Common Stock |
|
|
892 |
|
|
|
- |
|
Equity-based compensation |
|
|
94,204 |
|
|
|
543 |
|
Phantom unit expense |
|
|
6,783 |
|
|
|
7,242 |
|
Gain on forgiveness of debt |
|
|
- |
|
|
(10,900 |
) |
|
Gain on service fee settlement in connection with the Mergers |
|
|
(12,126 |
) |
|
|
- |
|
Deferred income tax benefit |
|
|
39 |
|
|
(1,720 |
) |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(20,632 |
) |
|
|
(2,567 |
) |
Contract assets |
|
|
1,800 |
|
|
(13,627 |
) |
|
Prepaid expenses |
|
|
(4,421 |
) |
|
|
(2,470 |
) |
Other current assets |
|
|
(472 |
) |
|
|
117 |
|
Operating right-of-use assets |
|
|
1,093 |
|
|
(36 |
) |
|
Other noncurrent assets |
|
|
(180 |
) |
|
|
(89 |
) |
Accounts payable |
|
|
27,582 |
|
|
|
5,616 |
|
Accrued expenses |
|
|
29,030 |
|
|
|
16,670 |
|
Contract liabilities |
|
|
1,285 |
|
|
|
610 |
|
Operating lease liabilities |
|
|
(1,739 |
) |
|
|
(522 |
) |
Other liabilities |
|
|
223 |
|
|
|
200 |
|
Net cash flows from operating activities |
|
|
(131,036 |
) |
|
|
(59,861 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Property and equipment purchases |
|
|
(1,406 |
) |
|
|
(1,971 |
) |
Forward purchase option derivative purchase |
|
|
(68,715 |
) |
|
|
- |
|
Settlement of forward purchase option derivative |
|
|
(6,000 |
) |
|
|
- |
|
Intangible asset purchases |
|
|
- |
|
|
(2,031 |
) |
|
Net cash flows from investing activities |
|
|
(76,121 |
) |
|
|
(4,002 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Net borrowings on line of credit |
|
|
21,907 |
|
|
|
543 |
|
Proceeds from debt obligations |
|
|
7,000 |
|
|
|
42,254 |
|
Repayments of debt obligations |
|
|
(6,000 |
) |
|
|
(3,000 |
) |
Proceeds from related party debt obligations |
|
|
3,510 |
|
|
|
- |
|
Financing costs paid |
|
|
(4,021 |
) |
|
|
(2,771 |
) |
Proceeds from warrant exercise |
|
|
- |
|
|
|
32,490 |
|
Proceeds from SAFE |
|
|
8,000 |
|
|
|
- |
|
Proceeds from pre-funded warrant |
|
|
6,000 |
|
|
|
- |
|
Payments for loan commitment asset |
|
|
(1,447 |
) |
|
|
- |
|
Payments of deferred offering costs |
|
|
- |
|
|
(1,057 |
) |
|
Proceeds from the Mergers |
|
|
196,778 |
|
|
|
- |
|
Equity issuance costs |
|
|
(25,108 |
) |
|
|
- |
|
Net cash flows from financing activities |
|
|
206,619 |
|
|
|
68,459 |
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
(538 |
) |
|
|
4,596 |
|
Cash, beginning of year |
|
|
10,617 |
|
|
|
6,021 |
|
Cash, end of year |
|
$ |
10,079 |
|
|
$ |
10,617 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
12,234 |
|
|
$ |
8,366 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Exchange of warrant liability for Class A and Class V Common Stock |
|
$ |
3,311 |
|
|
$ |
- |
|
Conversion of SAFE for Class |
|
$ |
8,800 |
|
|
$ |
- |
|
Establishment of earn-out liabilities |
|
$ |
74,100 |
|
|
$ |
- |
|
Equity issuance costs accrued but not paid |
|
$ |
13,433 |
|
|
$ |
- |
|
Equity issuance costs settled with Class A Common Stock |
|
$ |
17,000 |
|
|
$ |
- |
|
Fair value of warrants issued as debt discount |
|
$ |
- |
|
|
$ |
773 |
|
Fair value of warrants issued for debt issuance cost |
|
$ |
430 |
|
|
$ |
- |
|
Fair value of warrants issued for loan commitment asset |
|
$ |
615 |
|
|
$ |
- |
|
Cost accrued for settlement of forward purchase option derivative but not paid |
|
$ |
2,000 |
|
|
$ |
- |
|
Use of Non-GAAP Financial Measures
Adjusted Gross Profit and Adjusted Gross Profit Margin
Adjusted Gross Profit and Adjusted Gross Profit Margin are considered non-GAAP financial measures under the rules of the
Adjusted EBITDA
Adjusted EBITDA is considered a non-GAAP financial measure under the rules of the
The Company has included Adjusted EBITDA because it is a key measure used by Rubicon’s management team to evaluate its operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses. Further, the Company believes Adjusted EBITDA is helpful in highlighting trends in Rubicon’s operating results because it allows for more consistent comparisons of financial performance between periods by excluding gains and losses that are non-operational in nature or outside the control of management, as well as items that may differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which Rubicon operates and capital investments. Adjusted EBITDA is also often used by analysts, investors and other interested parties in evaluating and comparing Rubicon’s results to other companies within the industry. Accordingly, the Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating its operating results in the same manner as Rubicon’s management team and board of directors.
Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of net loss or other results as reported under GAAP. Some of these limitations are:
-
Adjusted EBITDA does not reflect the Company’s cash expenditures, future requirements for capital expenditures, or contractual commitments;
-
Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;
-
Adjusted EBITDA does not reflect the Company’s tax expense or the cash requirements to pay taxes;
-
although amortization and depreciation are non-cash charges, the assets being amortized and depreciated will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements;
-
Adjusted EBITDA should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items for which the Company may make adjustments in historical periods; and
-
other companies in the industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.
Reconciliations of Non-GAAP Financial Measures
Adjusted Gross Profit and Adjusted Gross Profit Margin
The following table presents reconciliations of Adjusted Gross Profit and Adjusted Gross Margin to the most directly comparable GAAP financial measures for each of the periods indicated.
|
|
Three Months Ended
|
|
|
Year Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Total revenue |
|
$ |
165,992 |
|
|
$ |
163,287 |
|
|
$ |
675,388 |
|
|
$ |
583,050 |
|
Less: total cost of revenue (exclusive of amortization and depreciation) |
|
|
158,595 |
|
|
|
156,285 |
|
|
|
647,833 |
|
|
|
558,672 |
|
Less: amortization and depreciation for revenue generating activities |
|
|
631 |
|
|
|
1,193 |
|
|
|
2,520 |
|
|
|
2,947 |
|
Gross profit |
|
$ |
6,766 |
|
|
$ |
5,809 |
|
|
$ |
25,035 |
|
|
$ |
21,431 |
|
Gross profit margin |
|
|
4.1 |
% |
|
|
3.6 |
% |
|
|
3.7 |
% |
|
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
6,766 |
|
|
$ |
5,809 |
|
|
$ |
25,035 |
|
|
$ |
21,431 |
|
Add: amortization and depreciation for revenue generating activities |
|
|
631 |
|
|
|
1,193 |
|
|
|
2,520 |
|
|
|
2,947 |
|
Add: platform support costs |
|
|
6,005 |
|
|
|
6,528 |
|
|
|
25,766 |
|
|
|
22,556 |
|
Adjusted gross profit |
|
$ |
13,402 |
|
|
$ |
13,530 |
|
|
$ |
53,321 |
|
|
$ |
46,934 |
|
Adjusted gross profit margin |
|
|
8.1 |
% |
|
|
8.3 |
% |
|
|
7.9 |
% |
|
|
8.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization and depreciation for revenue generating activities |
|
$ |
631 |
|
|
$ |
1,193 |
|
|
$ |
2,520 |
|
|
$ |
2,947 |
|
Amortization and depreciation for sales, marketing, general and administrative activities |
|
|
761 |
|
|
|
977 |
|
|
|
3,203 |
|
|
|
4,181 |
|
Total amortization and depreciation |
|
$ |
1,392 |
|
|
$ |
2,170 |
|
|
$ |
5,723 |
|
|
$ |
7,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platform support costs(1) |
|
$ |
6,005 |
|
|
$ |
6,528 |
|
|
$ |
25,766 |
|
|
$ |
22,556 |
|
Marketplace vendor costs(2) |
|
|
152,590 |
|
|
|
149,757 |
|
|
|
622,067 |
|
|
|
536,116 |
|
Total cost of revenue (exclusive of amortization and depreciation) |
|
$ |
158,595 |
|
|
$ |
156,285 |
|
|
$ |
647,833 |
|
|
$ |
558,672 |
|
(1) |
Platform support costs are defined as costs to operate the Company’s revenue generating platforms that do not directly correlate with volume of sales transactions procured through Rubicon’s digital marketplace. Such costs include employee costs, data costs, platform hosting costs and other overhead costs. |
|
(2) |
Marketplace vendor costs are defined as direct costs charged by the Company’s hauling and recycling partners for services procured through Rubicon’s digital marketplace. |
Adjusted EBITDA
The following table presents reconciliations of Adjusted EBITDA to the most directly comparable GAAP financial measure for each of the periods indicated.
|
|
Three Months Ended
|
|
|
Year Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Net loss |
|
$ |
(18,033 |
) |
|
$ |
(30,319 |
) |
|
$ |
(281,771 |
) |
|
$ |
(73,151 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
4,600 |
|
|
|
3,994 |
|
|
|
16,863 |
|
|
|
11,455 |
|
Interest earned |
|
|
(1 |
) |
|
|
- |
|
|
|
(2 |
) |
|
|
(2 |
) |
Income tax expense (benefit) |
|
|
16 |
|
|
|
(709 |
) |
|
|
76 |
|
|
|
(1,670 |
) |
Amortization and depreciation |
|
|
1,392 |
|
|
|
2,170 |
|
|
|
5,723 |
|
|
|
7,128 |
|
Equity-based compensation |
|
|
5,659 |
|
|
|
57 |
|
|
|
94,204 |
|
|
|
543 |
|
Phantom unit expense |
|
|
- |
|
|
|
4,335 |
|
|
|
6,783 |
|
|
|
7,242 |
|
Deferred compensation expense |
|
|
(1,250 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
(Gain) Loss on change in fair value of warrant liabilities |
|
|
1,340 |
|
|
606 |
|
|
|
1,777 |
|
|
|
606 |
|
|
Gain on change in fair value of earn-out liabilities |
|
|
(1,400 |
) |
|
|
- |
|
|
|
(68,500 |
) |
|
|
- |
|
Loss on change in fair value of derivatives |
|
|
(4,279 |
) |
|
|
- |
|
|
|
72,641 |
|
|
|
- |
|
Executive severance charges |
|
|
1,952 |
|
|
|
- |
|
|
|
1,952 |
|
|
|
- |
|
Gain on settlement of Management Rollover Bonuses |
|
|
(10,415 |
) |
|
|
- |
|
|
|
(10,415 |
) |
|
|
|
|
Excess fair value over the consideration received for SAFE |
|
|
- |
|
|
|
- |
|
|
|
800 |
|
|
|
- |
|
Excess fair value over the consideration received for pre-funded warrant |
|
|
14,000 |
|
|
|
- |
|
|
|
14,000 |
|
|
|
- |
|
Gain on service fee settlements in connection with the Mergers |
|
|
(12,126 |
) |
|
|
- |
|
|
|
(12,126 |
) |
|
|
- |
|
Nonrecurring merger transaction expenses(3) |
|
|
- |
|
|
|
- |
|
|
|
80,712 |
|
|
|
- |
|
Other expenses(4) |
|
|
960 |
|
|
|
325 |
|
|
|
2,954 |
|
|
|
1,055 |
|
Gain on forgiveness of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(10,900 |
) |
Adjusted EBITDA |
|
$ |
(17,585 |
) |
|
$ |
(19,541 |
) |
|
$ |
(74,329 |
) |
|
$ |
(57,694 |
) |
(3) |
Nonrecurring merger transaction expenses primarily consist of management bonus payments and related accruals in connection with the Mergers. |
|
(4) |
Other expenses primarily consist of foreign currency exchange gains and losses, taxes, penalties, fees for certain financing arrangements, and gains and losses on sale of property and equipment. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230308005734/en/
Investor Contact:
rubiconIR@icrinc.com
Media Contact:
Chief Marketing & Corporate Communications Officer
dan.sampson@rubicon.com
RubiconPR@icrinc.com
Source:
FAQ
What were Rubicon Technologies' Q4 2022 financial highlights?
How did Rubicon's annual revenue perform in 2022?
What is Rubicon's outlook for Adjusted EBITDA in Q4 2023?
How did Rubicon perform in terms of Adjusted Gross Profit in 2022?
What were major partnerships announced by Rubicon in Q4 2022?
