Bird Global, Inc. (NYSE:BRDS) Q2 2023 Earnings Call Transcript

Bird Global, Inc. (NYSE:BRDS) Q2 2023 Earnings Call Transcript August 10, 2023

Operator: Greetings, and welcome to the Bird Global Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Taylor Giles, Investor Relations. Thank you, sir, you may begin.

Taylor Giles: Good morning, everyone. With me today are Michael Washinushi Bird’s Interim CEO and CFO; and Stewart Lyons, Bird’s President. Before we begin, let me remind you that all statements made on this call that do not relate to matters of historical fact are considered forward-looking statements under the U.S. Federal Securities Laws, including statements regarding our current expectations for the business and our financial performance. These statements are neither promises nor guarantees and are subject to risks and uncertainties that could cause actual results to differ materially from the historical experience or present expectations. A description of these risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements on this call can be found in the Risk Factors section of our Form 10-K for the year ended December 31, 2022 and in our other filings with the SEC.

On this call, management will also reference non-GAAP measures, including adjusted EBITDA, adjusted operating performance, ride profit before vehicle depreciation and free cash flow, which we view as important in assessing the performance of our business. A reconciliation of each non-GAAP measure to the most directly-comparable GAAP measure is available in our earnings release on the company’s Investor Relations page at, ir.bird.com. The growth percentages that follow are in comparison to the same-period in the prior year, except as otherwise specified. I will now turn the call over to Michael.

Michael Washinushi: Thank you, Taylor, and thank you all for joining today’s call. I’ll start by quickly addressing my new Interim CEO role. I joined Bird in January of this year as CFO, because I saw the enormous opportunity to change the landscape of transportation in a market with hundreds of billions of dollars of TAM. Today, as I stepped into the Interim CEO role, I am more convinced than ever that the Bird platform is the best solution to support the evolving transit and climate initiatives of all cities. And I’m well aware of the unit economics and potential for profit in this industry. I’m excited to partner with Stewart and our leadership team as we strategically grow the company and mature Bird’s operations. In my extended role, I will focus on executing against our mandates of acting as a trusted partner to the cities in which we operate, managing expenses to support the operations of the business, and asset efficiency, which includes leveraging our two most important assets, the Bird team and our vehicles.

Of course, these mandates are all driven by our mission to provide clean, equitable transportation alternatives for the consumers, communities, and cities we serve, as well as making a profit where we operate. Going forward, Stewart and I are keenly focused on our riders and the value our vehicles provide. The engineering and field teams are engaged to ensure we have our vehicles at the right place at the right time, and with the right functionality. We are a tech enabled company. But our success will also come from ensuring that our field partners and riders have a seamless experience with Bird. Over the last six months, we’ve made many strategic changes to improve how we operate and we will continue to refine our approach. I am confident that we will continue to show progress across all metrics as we bring a renewed focus on operational excellence within the markets in which we operate.

Let me now turn to our second quarter performance. Highlights from the quarter include adjusted EBITDA, improvement of 96% year-on-year. OpEx reduction of almost 90%. Ride profit margin before vehicle depreciation improvement of 10% and gross margin improvement of 75%. Revenue as expected is down 28% year-on-year primarily due to exiting a number of unprofitable and regulatory challenge markets in 2022. We are tracking with our internal plan, but we are taking this pivot in management to reassess our financial plan and as such, will be temporarily suspending guidance. Turning now to our first mandate of being a trusted partner to the cities we serve. During the quarter, we were pleased to announce a number of new markets, expansion in existing markets and renewals in markets worldwide.

We also benefited from both organic and paid consumer activations, which resulted in significant spikes in riderships across certain markets, demonstrating how Bird’s model can scale. I will let Stewart walk you through this.

Stewart Lyons: Thanks, Michael. I also joined Bird Global in January of this year after running Bird Canada for four years. Bird’s Canadian business has been increasingly profitable since shortly after we launched in 2019, and we are fortunate enough to dominate the Canadian market, whether it’s judged by the number of rides, number of cities or scooters. In Q2, we increased our number of rides in Canada by 43% year-over-year, our Canadian revenue by 41% year-over-year and increased our profitability in that region, thus demonstrating that the shared electric scooter business can be profitable at scale. Subsequent to the quarter, we were chosen to exclusively serve the people of Montreal and Parc Jean-Drapeau, and we also expanded into Regina and Saskatoon, and now we operate in over 20 Canadian cities from coast-to-coast.

In the U.S.A., by the end of Q2, we provided almost 85 million rides since 2019 with almost 6.5 million in the first half of this year alone. From a regulatory perspective, we’ve secured renewals for our micromobility operations in 30 markets across the country, including Los Angeles, Nashville, New York City, Orlando and Seattle. We are particularly excited to be working with the city of Dallas again, where we brought in as part of the city’s new micromobility program to provide eco-friendly transportation. Our new approach to operations is beginning to bear fruit as key markets are starting to show increases in rides per vehicle per day and overall revenue and profitability. We’ve also begun to more closely focus on local partnerships on a city-by-city basis.

For example, in Q2, we were the exclusive e-scooter partner of the NFL for 2023 NFL draft in Kansas City. Daily rides in Kansas City increased by 724% during the Draft Weekend. In addition to making e-scooters available to attendees, Bird strategically located new parking spots around the city to expedite local travel during the event. Peak ridership just prior to the event was up 1,500% versus the same hour in the prior week. These statistics reflect the power of Bird’s platform and our ability to generate ridership at the local level as we engage with partners, cities and riders. We’re really pleased with the scale we are seeing from events like this. Moving on to Europe. We renewed permits in cities across the continent, including Austria and in France, Italy and Spain, including places like Vienna, Vichy, Rome and Malaga.

Vienna is a great example of how we expand our operations in key markets. In that city, we doubled our fleet size, increased our operational area by 250% alongside a 120% increase in the population served. Combined, the company altogether is approaching close to 200 million rides worldwide since we began operations, and we’re extremely proud to partner with cities to help them provide fun and environmentally friendly ways to get around. Michael, back to you to discuss the results.

Michael Washinushi: Thanks, Stewart. I’ll cover our second initiative of managing expenses in support of the operations of the business. Suffice to say, we are making strong progress – as the quarter highlights demonstrate. Looking at asset efficiency, we are leveraging our two most important assets. First is our vehicles. We continue to improve our supply and demand match with a demand-based vehicle drop model and our vehicle deployment rate. This ensures our vehicles are at the right place and time to meet demand. We are also focusing efforts on repair in support of vehicle functionality and extending the average life of our vehicles. This is important in maximizing ride and lifetime value of a vehicle. Next quarter, we’ll begin reporting on how we’re progressing on these important metrics.

Second is our team which we call the Bird family, including the employees and fleet managers. I’m very proud of their performance as we transform the company. We will continue to build trust, communication and conviction throughout the organization as we scale. Turning now to the numbers. Free cash flow was negative $1.8 million. This remains in line with our goal of becoming sustainably free cash flow positive business. Total revenue came in at $48.3 million, down 28% or down $18.4 million year-over-year. Our core sharing business declined 23% year-over-year, due to the decrease in rides, which declined 39% from the second quarter of 2022, in large part due to unprofitable markets that we exited. Q2 consolidated gross margin reached 40%, up 75 points from last year and Ride profit margin before vehicle depreciation reached 57%, up 10% from 47% last year, due to lower cost of sharing.

Adjusted operating expenses, decreased 50% year-over-year to $28 million compared to $56 million last year. As a percentage of revenue, Q2 adjusted operating expenses were 58% of revenue compared to 84% in the same period a year ago. Our net loss came in at $9.3 million, and adjusted EBITDA saw a substantial improvement from negative $28.9 million last year to negative $1.2 million. We ended the quarter with total cash and cash equivalents of $11.7 billion, including $6.8 million in unrestricted cash. Looking to the back half of the year, we are pleased with the progress we are making and the new markets and renewals that we expect will fuel our growth. While we are in a time of transition, and we believe that we are well positioned to execute against, our mandate and the company is now streamlined to achieve sustained, cash flow profitability.

I’d like to thank our employees and our partner, cities for their collaboration. And of course, we are incredibly grateful to our riders around the world who support our mission and literally drive our path forward. And with that, I will turn the call over for Q&A.

Q&A Session

Operator: Thank you. [Operator Instructions] It appears that there are no questions at this time. I would now like to turn the floor back over to Michael Washinushi for closing comments.

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Michael Washinushi: Well, good morning, everyone. Thank you for listening to our earnings results. As we have mentioned in our earnings call, we are pretty – we are happy and confident with the results and look forward to updating you as we make progression on our plan.

Operator: This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time.