Getaround, Inc. Reports Quarterly Results for the Period Ended June 30, 2024

Overview

Getaround is a global carsharing marketplace that connects car owners (hosts) with people who need to rent a car (guests). The company’s proprietary technology platform makes it easy for hosts to share their cars and for guests to book and access vehicles on-demand. Getaround has been focused on building and innovating its digital carsharing business since launching in 2011.

As of June 30, 2024, Getaround’s platform supports approximately 2.2 million unique guests and has around 72,000 active cars in over 1,000 cities across 8 countries. The company generates revenue primarily from fees charged to guests for carsharing trips as well as subscriptions paid by hosts to access Getaround’s connected car technology.

Recent Developments

Getaround has undergone several key changes in its executive leadership and operations in recent months:

• In March 2024, the company transitioned part of its executive team, including the departures of the Chief Operating Officer and a board member.
• In April 2024, Getaround suspended its carsharing operations in New York state due to high insurance costs required under new state regulations. This is expected to reduce annual service revenue by $5-7 million but improve trip contribution profit by $2 million.
• In February 2024, the company appointed a new CEO, Eduardo Iniguez, who succeeded one of Getaround’s co-founders.
• In July 2024, the company’s Chief Financial Officer departed and the Chief Accounting Officer was appointed as Interim CFO.

Getaround has also taken on significant additional debt financing, with the Mudrick Super Priority Note increasing from an initial $15 million to over $83 million as of July 2024. This debt is secured by substantially all of Getaround’s assets.

Additionally, in July 2024 Getaround received notice that the New York Stock Exchange had suspended trading of its common stock and initiated the delisting process, as the company did not meet the minimum market capitalization requirement.

Financial Performance

Getaround’s total revenues for the three months ended June 30, 2024 were $18.6 million, relatively flat compared to the prior year period. Service revenue, which makes up the majority of total revenue, increased slightly to $18.3 million, offset by a decline in lease revenue.

The company’s net loss for the three-month period was $12.0 million, an improvement from a $30.3 million loss in the prior year quarter. This was driven by reductions in sales and marketing, operations and support, and general and administrative expenses.

For the six months ended June 30, 2024, total revenues increased 19% year-over-year to $35.7 million, primarily due to incremental revenue from Getaround’s acquisition of HyreCar in 2023. However, the company still reported a net loss of $43.0 million for the first half of 2024, though this was an improvement from a $53.1 million loss in the prior year period.

Key Metrics

Getaround tracks two key business metrics:

Gross Booking Value (GBV): Represents the total dollar value of all service transactions on Getaround’s platform during a period, charged to both guests and hosts, net of cancellations. GBV was $53.0 million in Q2 2024, down slightly from $53.6 million in the prior year quarter.

Trips: Measures the number of completed bookings on Getaround’s platform. Trips decreased 9% year-over-year to 235,000 in Q2 2024, largely due to the suspension of operations in New York.

Non-GAAP Metrics

Getaround also uses several non-GAAP financial measures to assess its performance:

Net Marketplace Value (NMV): Represents the dollar value of all transactions on Getaround’s platform contributing to service revenue, net of host earnings, incentives, and pass-throughs. NMV was $24.8 million in Q2 2024, up 2% from the prior year.

Trip Contribution Profit and Margin: Measures gross profit from service revenue adjusted for variable costs like insurance and customer support. Trip contribution profit was $9.7 million in Q2 2024 with a 53% margin, up from 43% a year earlier.

Adjusted EBITDA: A measure of operating performance that excludes the impact of fair value adjustments, interest, taxes, depreciation/amortization, stock-based compensation, and certain non-recurring expenses. Adjusted EBITDA was a loss of $11.4 million in Q2 2024, an improvement from a $22.4 million loss in the prior year period.

Strengths and Weaknesses

Strengths:

• Scaled global carsharing platform with 2.2 million guests and 72,000 active cars
• Proprietary technology that enables a seamless digital experience for hosts and guests
• Diversified revenue streams from carsharing fees and host subscriptions
• Improving unit economics as evidenced by rising trip contribution margin

Weaknesses:

• Significant and persistent net losses, with a $43.0 million loss in the first half of 2024
• Reliance on debt financing, with the Mudrick Super Priority Note growing to over $83 million
• Suspension of operations in key market of New York due to regulatory challenges
• Delisting from the NYSE due to failure to meet minimum market capitalization requirement

Outlook and Risks

Getaround faces an uncertain future as it continues to grapple with profitability challenges and regulatory hurdles. The company’s ability to fund its operations and capital needs will depend on its ability to generate positive cash flow, which it has struggled with to date.

Getaround will need to carefully manage costs and focus on improving the efficiency and unit economics of its business model. The suspension of operations in New York is a setback, and the company will need to navigate similar regulatory obstacles in other markets.

Additionally, Getaround’s delisting from the NYSE raises questions about its long-term viability as a public company. The company may need to seek additional financing, which could be difficult given its financial position.

Overall, Getaround faces significant headwinds and will need to execute a turnaround plan effectively to achieve profitability and sustainable growth. Investors should closely monitor the company’s progress in improving its financial performance and managing its capital needs in the quarters ahead.