May 25, 2022

Micromobility co-production company Bird announced its fourth-quarter and full-year 2021 earnings after a bell on Tuesday.

The report was the second result released by the company since the deal with SPAC in November. After the merger, the value of the company fell, reflecting the decline of other SPAC mergers. However, the company has raised capital and been listed on the stock exchange, so now we regularly receive financial reports on its activities.

In the fourth quarter, Byrd beat Wall Street’s earnings expectations, but the outlook fell short of analysts’ expectations and may fall short of estimates made in the SPAC investor presentation. Let’s dig.

Bird. finance

Bird’s annual revenue of $205 million was higher than expected at $193.1 million. It was the profit of the company. The e-scooter company’s revenue increased by 117% of total 2020 revenue. Admittedly, 2020 has had a big impact on all mobility-focused startups, so there are some nuances in the number, but it’s still a strong result.

In the appeal, Byrd stressed to gaming-updates that his 2021 income was 9% higher than SPAC’s forecast. Adjusted EBITDA for the full year for 2021 was $67 million, also up 30% from SPAC’s original guidance. Byrd originally expected an adjusted EBITDA loss of $96 million in 2021.

However, the company’s fourth quarter was not as impressive as its full-year results. Bird’s Q4 2021 revenue was $54 million, up from a year ago but down from the previous quarter, with $65.4 million in revenue. Bird’s fourth-quarter revenue topped Wall Street’s estimate of $51.37 million, and despite a quarter-on-quarter decline in revenue, Bird’s gross margin was 15% in the fourth quarter compared to 13.5% in the same year’s third quarter. .

Most of Bird’s revenue came from vehicle sharing, but revenues have been boosted by e-bike sales. Bird generated approximately $17.8 million in product sales in 2021, up from $14.7 million in 2020. While this number isn’t indicative of massive growth, Bird has seen better economics in its hardware business. Product sales were worth $17.3 million in 2021, up from $22.7 million in 2020, meaning the company is getting better at cutting costs and improving efficiency.

Part of the decline in overall Bird sales in the fourth quarter compared to the third quarter of 2021 is due to the average number of trips per day per vehicle in the fourth quarter compared to the full year. Bird attributes this decline to seasonality: the fourth and first quarters were slightly lighter on key mobility indicators due to inclement weather and fewer tourists. Of course, COVID also affected the driving style in the fourth quarter.

Bird expects the market to improve further in 2022 as mask-wearing requirements return in U.S. cities and tourism and commuting are expected to return. The company also noted that the increase in gas prices due to the war in Ukraine is expected to lead to an increase in the number of passengers as people look for alternative modes of transport.

In value terms, Bird’s total operating expenses soared to $136.6 million in the fourth quarter from $40.0 million in the previous quarter. Bird attributes the $82.3 million to non-cash, stock-based compensation expenses that were associated with the SPAC merger. Many companies report an increase in the value of share-based compensation in the near future after their debut on the public market.

Gross profit in 2021 was 19% of sales, and Bird expects that percentage to increase over time into the 1920s.

updated guide

With higher-than-expected fourth-quarter 2021 top-line earnings and lower-than-expected full-year adjusted EBITDA losses, you might be surprised to hear that Bird shares are falling after hours. Why the decline? Leadership, it seems.

Byrd expects first-quarter sales of this year to be between $34 million and $36 million. According to the Yahoo Finance Average, investors were forecasting $49.0 million for the first quarter of 2022. Bird expects $350 million in annual revenue, which is an unmotivated estimate given the company’s previous goal of $401 million, as outlined in the SPAC deck.

The company told gaming-updates that Byrd predicted 2022 with unchanged usage compared to 2021 results, instead of continuing the current post-COVID recovery and returning to work and tourism. The company also argued that reaching $350 million would still be a significant 70% year-on-year increase from $205 million in 2021. (Note that $401 million in revenue means even faster growth!)

Despite the challenges, Byrd says each quarter is profitable on a number of fronts. The question is, can it sustain a sustainable business and achieve long-term GAAP profitability?

Do birds have wings?

Bird’s earnings report claims the company has a presence in 400 cities around the world, which could give it the reach it needs to become fully profitable. Bird began selling scooter stock in New York in August, which it says was successful, and will double Bird’s footprint this summer. In return, Bird will double the size of its fleet in the city, Bird founder and CEO Travis Vanderzanden said during an earnings call on Tuesday. The company said that existing key markets such as Washington DC and Marseille, France have also updated their e-scooter programs in 2021.

Vanderzanden said Bird will enter 250 cities with a population of less than 500,000 by 2021 thanks to its scooter fleet management business model, which outsources the scooter fleet to third-party operators and is a constant source of income for Bird.

“Despite the seasonal impact on our sales, this model is a significant differentiator for Bert due to our focus on both profitability and operational efficiency, which we disclose as each partner drives an average of approximately 100 vehicles. In fact, our supply chain to logistics partners remains strong even as we continue to raise our expectations. Going forward, we will continue to optimize and develop our fleet management program, which includes further investment in the technology platforms our partners use to manage their operations,” the CEO said.

Bird’s ride profit margin before vehicle depreciation has increased from 20% in 2020 to 49% in 2021, and Bird tells gaming-updates there’s room to increase that number even further as gross margins increase, adding that Bird and both operators her fleet will get more profit. . profit. As usage increases, these percentages will rise.

Bird also relies on vehicle innovation to make a profit. Bird Three, a new scooter with a larger battery and longer shelf life that hit the streets in the summer of 2021, showed a higher load factor than other models, which can be attributed to the novelty factor of the new equipment. could. But Byrd says their new scooter got used more and more during the launch because it’s just such a great ride. It is also very easy to repair, and vehicle deployment damage vectors are very small, which can increase some of the company’s profit margins. At the end of 2021, the Bird Three will account for 40% of the entire Bird fleet, but the company expects this vehicle to make up the bulk of its fleet by the end of the year.

The great thing about previous models is still on the road, Bird keeps fixing them up and getting them back on the road. There’s a balance here because Bird Three outperforms newer cars but bears the burden of full depreciation when those older cars basically give Bird a free ride because they’re already fully depreciated.

In order to further increase ridership, Bird will focus on longer journeys by using more of its shared Bird bikes. It will also expand its Smart Bikeshare program to include local bike sharing on its app, in the hope that it will encourage a larger regime change that could eventually return to Bird.

How much further does a startup need to grow to get closer to profitability? Fourth-quarter revenue of $54 million brought in $8.2 million, up from $13.5 million in the third quarter of 2021. The figure shows a $2 million improvement in gross margin from last year when the first winter of COVID hit, but operating expenses of $136.6 million in the quarter are still a long way off, widening from the previous quarter. hope.

Bird still has $159.9 million in cash in “general cash and cash equivalents and restricted cash and cash equivalents,” meaning it has time to recover its losses.

But not forever. In 2021, the company spent $131.6 million in cash on operations, while cash flow from capital investments over the same period was large and negative at $215.8 million. The purchase of vehicles by the company is included in the investment cash flow for reference.

Bird told gaming-updates that it is focusing on its core exchange business and moving towards profitability. Overall year-on-year growth is still on an upward trajectory, and if these headwinds do turn into tailwinds, Bird could still maintain its conservative estimates for the full year.

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