2Q Results: Company Remains on Track to Reach Its Growth and Profitability Goals

  • EVmo reported 2Q22 revenue of $2.9 million, up 8% Y/Y and 17% Q/Q, as new vehicles entering the rental fleet accelerated in the second half of the quarter and rental pricing improved. Net loss of $1.2 million improved both Y/Y and Q/Q due to margin growth and a focus on costs. Complete results can be accessed here.
  • 2Q22 showed improved operating metrics as demand for new cars remains strong. 2Q22 gross margins were 45% (ex-depreciation) versus 40% in 1Q22, with Average Rental Days per Driver up 8% versus 2Q21; EVmo had 68% of its customers renting cars for more than 80 consecutive days. Management also noted that daily rental rates have been improving due to strong market dynamics and the introduction of new cars, which command higher rates.
  • Rental fleet is now more than 1,000 vehicles, up from ~600 at YE21. EVmo began receiving its new vehicles in 2Q and expects to add 400 vehicles per quarter in 2H22. However, management did note that industry-wide bottlenecks around transporting and then registering the cars have weighed on the pace of growth, but the company is taking steps to accelerate its fleet growth.
  • EBITDA breakeven expected in the second half of this year. EVmo now has more than the 900 cars it stated that it needs to be EBITDA breakeven. 3Q22 and more so 4Q22 results should show the company well on its way to profitability and strong cash flow generation.
  • 2022 guidance remains within reach. We expect that EVmo will reach its 2022 revenue guidance of $18.2-19.4 million despite the delivery and registration bottlenecks. With more than 2,000 cars in its fleet, EVmo should be able to more than double its revenues in 2023.
  • Financial position still solid. EVmo ended the quarter with $6.1 million in cash and $19 million in leased and owned vehicles on the balance sheet. The company continues to expect to be able to fund future growth from operating cash flows and non-dilutive vehicle financing.

The Opportunities

EVmo is at an inflection point in its explosive growth curve as a leading player in the rideshare industry. Last year and early 2022 have seen the pieces put in place to enable and support this ramp going forward, including a new management team with extensive experience in the transportation sector, a strengthened balance sheet, improved vehicle financing partnerships, and OEM supply agreements that will enable the company to reach 2,000 vehicles in its fleet by YE22, up from 600 at YE21.

The Obstacles

The company’s growth was limited in 2H21 due to tightness in the US light-duty vehicle market as well as the need for management to put in place financial and operational improvements. EVmo needs to show continued fleet growth throughout 2022 as well as improving gross margins as it expands in both existing and new markets.

Please read our prior research reports on EVmo here or at www.watertowerresearch.com.


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