Urgently Inc. is a leading provider of digital roadside and mobility assistance technology and services in the United States. The company’s platform connects vehicle owners and operators with service professionals who deliver traditional roadside assistance, proactive maintenance, and repair services. Urgently’s innovative approach has positioned it as a trailblazer in the evolving mobility assistance industry.
Urgently’s Journey of Innovation and Growth
Urgently was founded in May 2013 in Vienna, Virginia, and incorporated in the State of Delaware. The company’s initial years were marked by significant challenges as it worked to build its platform and establish relationships with customer partners. During this period, Urgently faced recurring operating losses and relied on debt and equity financing to fund its operations. By 2021, the company had accumulated substantial losses and a net tangible asset deficit, reflecting the difficulties in establishing the business.
In 2022, Urgently took important steps to address its capital structure by securing $30 million in new debt financing. This infusion of capital provided the company with additional resources to invest in its technology and expand its customer base. Although Urgently continued to report operating losses during this time, it began to build momentum by adding new customer partners and strengthening relationships with existing ones.
A significant milestone in Urgently’s growth came in 2023 with the acquisition of Otonomo Technologies Ltd., a provider of an automotive data service platform. This strategic move enhanced Urgently’s capabilities and brought new customer relationships into its portfolio. However, the company also faced challenges during this period, including a material weakness in its internal controls over financial reporting, which it was actively working to remediate.
Throughout its history, Urgently has remained focused on its core mission of providing innovative, digitally-enabled roadside and mobility assistance services to its customer partners, which include leading brands across the automotive, insurance, and transportation industries. Despite navigating a challenging operating environment, the company has made steady progress in building its platform, expanding its customer relationships, and working to improve its financial performance and internal controls.
Over the years, Urgently has steadily expanded its reach and capabilities, forging partnerships with leading automotive and insurance brands. As of September 30, 2024, the company boasts a network of 55 customer partners and more than 75,000 participating service providers across the United States and Canada.
Urgently’s Differentiated Offering and Competitive Advantages
Urgently’s platform combines location-based services, real-time data, artificial intelligence, and machine-to-machine communication to provide quick, safe, and innovative roadside assistance services. The company’s unique approach has earned it industry recognition, including the recent AutoTech Breakthrough Award for “Overall Transportation Tech of the Year.”
One of Urgently’s key competitive advantages is its next-generation yield-based pricing technology, which enables the reliable prediction and optimization of job prices for roadside assistance services. This innovative feature allows the company to better manage surges in demand, similar to the surge pricing model used by ride-hailing services. By leveraging this technology, Urgently can deliver higher-quality customer experiences while optimizing its own margins.
Navigating Challenges and Pursuing Growth Opportunities
Despite the positive momentum from recent contract renewals and new customer acquisitions, Urgently’s business is not immune to the broader challenges facing its partners. In October 2024, the company was informed that one of its top five global OEM customer partners had decided to close its mobile technical support trucks and eliminate dealer technicians providing remote services, resulting in a contract wind-down. This customer partner represented less than 5% of Urgently’s revenue in the first nine months of 2024.
However, Urgently remains focused on winning new business and renewing and expanding relationships with its existing customer partners. The company is also dedicated to improving its margin profile and delivering profitable growth, as evidenced by its recent operational initiatives and the divestiture of its Autonomous Business Unit, The Floow. This strategic divestiture will enable greater focus and capital allocation towards advancing Urgently’s core platform and services.
Urgently’s Strategic Priorities and Financial Performance
Urgently’s core priorities moving forward include expanding its existing B2B incident business through securing renewals, expanding relationships with existing partners, and developing new customer partner opportunities. The company is also committed to achieving non-GAAP operating breakeven through operational improvements, margin expansion, and managed growth, while continuing to provide innovative and differentiated services to its partners.
Financials
Urgently operates in a single reportable segment – Mobility Assistance Services. This segment encompasses all of Urgently’s products, services, and software used to generate revenue under its commercial agreements. The company’s primary revenue is generated from its roadside assistance services (RAS) platform, which enables its Customer Partners to outsource the delivery of their roadside assistance programs.
In the most recent fiscal year (2023), Urgently reported revenue of $184.65 million, net income of $74.73 million, operating cash flow of -$65.15 million, and free cash flow of -$65.29 million.
For the third quarter of 2024, Urgently reported revenue of $36.25 million, which was in line with its expectations. This represents a 21% decrease compared to the prior year period, primarily driven by the non-renewal of a major auto manufacturer Customer Partner, which resulted in a $11.9 million revenue reduction. The company’s net income for Q3 2024 was -$10.61 million, with operating cash flow of -$8.73 million and free cash flow of -$11.61 million.
Urgently’s gross margin for the third quarter was 21%, representing the sixth consecutive quarter that gross margin exceeded 20%. The company’s non-GAAP operating loss for the third quarter improved by 17% year-over-year, reflecting the progress made through its operational efficiency initiatives.
For the nine-month period ended September 30, 2024, Urgently generated $110.88 million in total revenue, a 21% decrease from the same period in the prior year. This decline was largely due to the loss of the auto manufacturer Customer Partner, as well as the decision to exit certain non-profitable Customer Partnerships. Gross profit for the nine months was $24.45 million, with a gross margin of 22%.
Looking ahead, Urgently has provided guidance for the fourth quarter of 2024, expecting revenue in the range of $30 million to $33 million and targeting a non-GAAP operating loss of approximately $2 million. For the full year 2024, the company expects revenue in the range of $141 million to $144 million. Urgently remains committed to achieving non-GAAP operating breakeven in the first quarter of 2025.
Urgently primarily operates in the United States and Canada, with no significant geographical breakdown of revenues provided in the available information.
Liquidity
As of the third quarter of 2024, Urgently reported cash and cash equivalents of $17.37 million. The company’s debt-to-equity ratio stood at -2.31, while its current ratio and quick ratio were both 0.56. These figures indicate potential liquidity challenges that the company will need to address.
Urgently is currently in discussions with lenders regarding a senior secured working capital line of credit solution to meet its debt maturity in January 2025. This highlights the importance of securing additional financing to support the company’s operations and growth initiatives.
While the company has previously relied on debt and equity financing to fund its operations, the $30 million debt financing secured in 2022 likely improved Urgently’s liquidity position at that time. However, as Urgently continues to report operating losses, monitoring its cash flow and liquidity will be crucial for investors.
The company expects its common stock shares outstanding at the end of Q4 2024 to be 13.5 million.
Conclusion
Urgently’s journey of innovation and growth in the digital roadside assistance space has positioned the company as a leader in the evolving mobility assistance industry. Despite the challenges faced, including revenue declines and the loss of a major customer partner, Urgently’s differentiated offering, strategic priorities, and financial discipline have enabled it to navigate the complex landscape and pursue new growth opportunities.
The company’s focus on enhancing its platform capabilities, improving operational efficiency, and expanding its Customer Partner base demonstrates its commitment to long-term success. The integration of Otonomo’s Mobility Platform is expected to further enhance the customer service experience for Consumers on Urgently’s platform by improving data capabilities, features, and data ingest capacity.
As Urgently continues to drive technological advancements and deliver exceptional customer experiences, its ability to add and retain Customer Partners, invest in innovation, and manage its operating expenses will be key drivers of the company’s financial performance and growth. While facing liquidity challenges, Urgently’s efforts to secure additional financing and achieve non-GAAP operating breakeven underscore its determination to build a sustainable and profitable business model.
Urgently’s story continues to unfold, highlighting its potential to shape the future of the mobility assistance sector. Investors and industry observers will be closely watching the company’s progress in executing its strategic initiatives, improving its financial performance, and capitalizing on the opportunities in the evolving digital roadside assistance market.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.