Zoomcar Holdings, Inc. Price & Performance (ZCAR)

Hello, everyone, and thank you for joining our call today. I'm excited to share that Zumka has been able to achieve another quarter of solid results for the quarter ended 12/31/2024. During this quarter, we remain focused on delivering a high quality customer experience for our guests and hosts, and we saw continued growth on a year over year basis in booking of 19%. Demand remains strong, while we concentrate efforts on increasing supply. Organically and through partnerships with supply partners. These improvements have led to an increase in the number of hosts and in host retention rate. Reflecting the strengths of the Zoomcar platform and brands that we continue to develop. We continue to focus on optimizing our cost structure and improving the profitability of the business while driving booking growth. This quarter, we saw another increase in contribution profit. Marking this the fifth consecutive quarter of positive contribution profit. Lastly, we continued to make progress in restructuring of the debt on our balance sheet. Which will ultimately reduce the cash burden of the business. We appreciate that some of the audience may be learning about ZoomCo for the first Zoomcar, Let me take you through a few slides for a brief introduction of the business and to discuss the key problems we are solving for in India.

Zumka is an app that supports India's leading marketplace forecast sharing. The app connects hosts who provides access to their vehicles, two guests who choose from a selection of cars for use at affordable prices all of which promote a sustainable smart transportation solution. We are headquartered in Bangalore, and have been in existence for more than ten years. The company has 143 employees, of which the majority are engineering, design and product related staff. We host 10,000,000 guests, and there are over 25,000 cars on our platform. We are well recognized our home market, and have over 90% brand awareness among car sharing and rental car users. So What are the major problems that hosts and guests face? And how does Zoom go offer a solution? For hosts, vehicle ownership is highly expensive in India while big underutilized. This is the problem. Our marketplace provides hosts an opportunity to make side income from vehicles which would have otherwise been sitting idle. How do hosts make money? Let's say a host has a full time job and his monthly income for the full time job is approximately $1,000 By listing a compact SUV, he or she can earn $150 to $200 net of loan repayment, maintenance cost and insurance that is 15%, 20% extra income.

So this is a good side income and many consider adding the second vehicle to further increase their side income. We have host through obtained financing for multiple vehicles upwards of say 15 plus where Zumka is their main income source as a professional house. Through these examples, you can see how Zoomcar enables entrepreneurs to start their own car sharing Moving to the guest side, there are two problem statements. One, buying a car is still very expensive in India. The most popular vehicle is the Suzuki Swift, which costs over $10,000 This is significant for the average consumer who earns around $2,700 per year. As a guest, I may not be able to afford my own car. However, I may still want to occasionally rent a vehicle and go on holiday with my The second program, people still require vehicles to travel from one city to another. And need access to cars during the duration of the trip, whether it is for personal or business related travel. I'm personally very imparted to these programs Unlike in The U. S, where car ownership is high, owning a vehicle is very aspirational in India. And this is why we are excited to help our consumers by improving access to mobility in India through our platform.

How big is the scale of these programs? India has a population of 1,400,000,000 people of which the majority is working age. Only one in 10 households are able to afford vehicles as the most popular car model costs four times of GDP per capita. So accessibility to mobility needs to be significantly improved. We believe there is a massive opportunity for SunKa. Digital brand penetration is quite high, where more than 1,000,000,000 mobile phones are connected to the Internet. And importantly, digital wallets the predominant way to transact in India. You can even buy coconuts or bananas on the street using your mobile. We believe Zumka is well positioned in India where there exists a large market for cash sharing on the digital platform. Where penetration today is still very low. And demand for vehicle is high. With this overview of the business, let me dive deeper into some of these key highlights from this quarter's results. The customer experience has been a key priority as it impacts greatly whether a guest books another Zoom car as well as a host decision to remain on our platform. We are taking several initiatives to improve the customer experience, including doubling customer support capacity, which is supported by Gen AI tools, machine learning based dynamic pricing and loyalty points became more attractive for repeat users increasing supply with freed partners with nearly 10% of high quality cars provided by one large fleet operator and Zoomcast fulfillment centers across four main cities.

These developments have led to improving metrics on our platform such as percentage of repeat users doubling from 6% at the end of the quarter ended 09/30/2024 to 12% at the end of quarter ended 12/31/2024. In addition, we saw a continued increase in the number of hosts as well as an improvement in high quality host retention which increased from 11% in fiscal Q2 to 30% by the end of the fiscal Q3 twenty twenty four. We achieved another record quarter of contribution profit. The improvement in guest and host customer experience have also allowed us to continue optimizing costs related to marketing, [indiscernible] Combined with continuous improvement in operational efficiencies and smarter machine learning based dynamic pricing, we continue to optimize our cost base. Which led to another increasing quarter of contribution profit. I will now hand it over to Sachin to provide an update on the company's fundraising and to discuss the financials in greater detail. Thank you, Dusse.

Hello, everyone, and thank you for joining our earnings call today. I would like to share an update on the fundraising process. Totaling $3,000,000 on 01/31/2025. We will continue to raise additional funds during fiscal quarter four to support the needs of the business. These funds will primarily be used to support the growth of our operations and in part to pay down the restructure debts. In terms of debts on the balance sheet, we are in discussion with our debt partners to restructure the existing debt, which we believe will help us in reducing the near term cash and funding needs for the and and improve the sustainability of our balance sheet. Let's take a look at our operational and financial measures. The fiscal quarter marked a solid quarter of performance as exhibited in our The numbers presented here are for the quarter ended 12/31/2024 as compared to the quarter ending 12/31/2023, unless otherwise mentioned. Number of booking grew by 19% to 103,599 booking in quarter three. Over the prior year period. Gross booking value remained flat and revenue increased by 1% following a similar pattern to the last quarter whereby we are seeing more frequent but shorter duration bookings relative to the prior year period.

We will continue to focus on driving higher frequency of the guests bookings over the immediate revenue growth as we are prioritizing the growth of repeat guests and encouraging repeat booking behavior, which we believe will ultimately add value to our business in the longer active high quality cars which we define as cars with 4.5 plus rated out of five, increased from 5,830 to 7,247 And the average guest trip rating continued to improve from 4.16 during the quarter ended 03/31/2024 to 4.7 during the quarter ended December. All of this is driven by our efforts to improve the customer experience. Building various in app features and use it and the use of AI to improve [indiscernible] experience for both guest and the host. As mentioned earlier, revenue increased by 1% from 2,420,000.00 to about 2,450,000.00 Contribution profit increased significantly from $200,000 to about $1,280,000 due to a reduction in marketing costs, incentives and other cost improvement projects. This marks our fifth consecutive quarter of positive contribution And just to give you a perspective on a per booking basis, our contribution profit increased from $2.4 per booking during the quarter ended 12/31/2023 to $12.39 per booking during the quarter ended 12/31/2024, which also represents a significant growth in contribution margin from 9% to 52% as a percentage of revenue year over year.

Our adjusted EBITDA loss improved from $10,170,000 to a loss of $3,150,000 driven by company wide cost optimization efforts improvement in customer experience, which drove the improved retention metrics for both host and guest thereby reducing our requirement to spend on host incentives discounts and overall performance marketing. [indiscernible] operations also improved from $11,680,000 to a loss of $3,240,000 due to all of the aforementioned reasons. Our contribution we have presented in the subsequent slides, which is Slide number thirteen and fourteen, we have presented two non GAAP measures. Contribution margin and adjusted EBITDA. Which we believe are an important and supplemental to the GAAP measures. These slides provide a reconciliation of non GAAP measures to the numbers reported in our to be reported in our 10 Q. These reconciliations will also be part of the 10 Q filed with Securities and Exchange Commission to be filed later today after the market close. And will also be and is also part of the press release made earlier in the day today. I would now hand over the call to Vivian for the Q and A session. Thank you, Sachin.

Will now move on to the Q and A portion of the call. Thank you to those who have submitted questions prior to today's call. The first question for today's session is, can you please provide more details about the fundraising process and debt restructuring?

Sure. Let me take that question. In November 2024 and 12/02/2024, we raised $9,150,000 and $5,500,000 respectively, for a combined raise of $15,000,000 Earlier this month, or January, we raised an additional $3,000,000 of capital. We will opportunistically continue to raise additional capital this quarter. The funds raised so far and intended to be raised in future will will primarily be used to fund the growth initiatives of the business and part of the fund will also be used to pay down the restructured debt. Additionally, what we're doing is we are exploring various options with our debt partners to restructure the current debt on the balance sheet. This may include, for example, adjusting the terms of the debt to a longer pay down schedule, settling the debt via issuance of equity or settling in cash against substantial debt forgiveness. We believe this is an important exercise which will reduce the burden on the balance sheet reduce the interest expense and reduce the burden on the funds being raised in the short term shorter term. We believe our funds can then be better utilized to support the growth of the operations benefiting the business and increasing the shareholders' value in the longer run.

The next question is, please provide us with an update on your NASDAQ listing status.

Sure. So we've been diligently working to regain the compliance compliance with NASDAQ applicable rules and are making significant progress. Earlier this week, we received a notification from NASDAQ allowing us to transition to NASDAQ capital markets by 02/19/2025. And further granting us extension to regain compliance with the outstanding deficiency reflecting the efforts we have made so far and the comprehensive plan in place to restore our compliance. The company is fully committed to addressing the remaining deficiency and will continue to exert our best efforts in the weak side.

Last question is, what are management's near term priorities for the business?

I will take this question. Ultimately, we are prioritizing growth of the business by improving the customer experience for both hosts and guests. And we have many initiatives in place to support this. In addition, we expect this to also improve the cash flows of the business through cost optimization projects as well as the restructuring of the debt on our balance sheet. Which Sachin discussed earlier. Allow me to provide more details. Operationally, we'll prioritize two things. Increase [indiscernible] and two, provide a more seamless experience for our guests and hosts. We will continue to increase supply as this is a growth driver for us. By having more vehicles on our platform, it provides guests with more vehicle options in a given radius and with shorter distances. It makes it more convenient for pickups as well. Will continue to improve the customer experience providing a more seamless experience for guests and hosts that are on our platform Both of these factors will drive the growth of our business. Greater customer experience also has a positive impact on the financials which are essentially greater bookings volume and revenue as well as cost savings. Have been optimizing our cost structure and a big factor is being able to optimize marketing and incentives without impacting growth of host retention.

We believe we can continue to reduce costs to eventually reach a positive cash flow position. Our core contribution margin is strong over 50% and it continues to improve over time. Thank you, Roshi. This now concludes Sumkar's fiscal third quarter twenty twenty four earnings conference call.

For more information, please refer to our fiscal third quarter twenty twenty four earnings press release and other materials found on our Investor Relations website. You may also email us at investorsumcar dot com for any further questions. You for your participation today. You may now disconnect.