Shared micromobility company Bird reveals his Fourth quarter 2021 and full year results on Tuesday after the bell.
The report was the company’s second public earnings release after completing its SPAC deal in November. Since its merger, the company’s value has declined, mirroring declines seen in other SPAC mergers. Despite this, the company has raised capital and gone public, so we now receive regular financial information on its operations.
In the fourth quarter, Bird beat Wall Street’s revenue expectations, but its guidance fell short of analysts’ expectations and may lag compared to forecasts detailed in its SPAC investor presentation. Let’s dive in.
Bird’s full-year revenue of $205 million beat expectations of $193.1 million. That was a win for the company. The e-scooter company’s sales increased 117% over total 2020 sales. Of course, 2020 was a year that heavily impacted all mobility-focused startups, so there’s some nuance in the number, but it’s still a strong result.
In a call to TechCrunch, Bird stressed that its 2021 sales result was 9% above its SPAC guidance. Adjusted EBITDA for full year 2021 was -$67 million, which also exceeded the original SPAC guidance by 30%. Bird had originally projected an Adjusted EBITDA loss of $96 million in 2021.
However, the company’s fourth quarter wasn’t as impressive as its full-year results. Bird’s fourth-quarter 2021 revenue was $54 million, an increase from the prior-year result but a decrease from the sequentially prior quarter of $65.4 million in revenue. Bird’s Q4 revenue has outperformed Wall Street estimates $51.37 millionand despite a revenue decline from quarter to quarter, Bird’s gross margin was 15% in the fourth quarter, up from 13.5% in the third quarter of the same year.
Most of Bird’s revenue came from vehicle sharing, but revenue from Sale of e-bikes expanded. In 2021, product sales accounted for approximately $17.8 million of Bird’s revenue, up from $14.7 million in 2020. While that number doesn’t represent massive growth, Bird saw improved economics in its hardware business. Cost of sales of product sales in 2021 was $17.3 million compared to $22.7 million in 2020, which means the company keeps getting better at hardware to keep costs down and efficiency up increase.
Part of the overall decline in Bird’s fourth-quarter revenue — compared to its third-quarter metrics for 2021 — is due to average trips per vehicle per day falling in the fourth quarter compared to its full-year metrics. Bird attributes this decline to seasonality, with Q4 and Q1 tending to be slightly easier for key mobility metrics due to bad weather and lower tourism. Of course, COVID also had an impact on driver numbers in the fourth quarter.
Bird expects the market to rally further in 2022 as cities across the US ditch their mask requirements and tourism and commuting are expected to make a comeback. The company also noted that the rise in gasoline prices due to the war in Ukraine is expected to result in increased ridership as people seek alternative modes of transportation.
As for expenses, Bird’s total operating expenses increased sharply to $136.6 million in the fourth quarter, up from $40.0 million last quarter. Bird attributes this to $82.3 million in non-cash stock-based compensation expense triggered by its SPAC combination. Many companies are reporting short-term increases in stock-based compensation costs as they go public.
Gross margin for 2021 was 19% of sales, and Bird expects that percentage to drift into the 20s over time.
Following better-than-expected fourth-quarter 2021 revenue results and lower-than-promised full-year Adjusted EBITDA losses, you might be surprised to learn that Bird’s stock is down in after-hours trading. Why the declines? guidance it seems.
Bird expects revenue to be between $34 million and $36 million for the first quarter of this year. Investors had budgeted $49.0 million for Q1 2022, based on Yahoo Finance averages. For the full year, Bird expects sales of $350 million, an uninspiring estimate given the company’s previous target of $401 million, as stated in its SPAC deck.
Bird forecast its 2022 with flat usage compared to 2021 results, rather than modeling continued recovery from COVID and continued return to work and tourism, the company told TechCrunch. The company also argued that hitting $350 million from 2021’s $205 million would still be a healthy growth rate of 70% year over year. (We note here that $401 million in sales would represent even faster growth!)
Bird says it’s been profitable on some metrics despite challenges each quarter. The question remains, will it be able to sustain a sustainable business and achieve long-term GAAP profitability?
Does bird have wings?
Bird’s earnings release claims the company has a presence in 400 cities worldwide, a presence that could give it the kind of reach it needs to become fully profitable. Bird began operating a Scooter stock in New York City in August, which is said to have been successful and will see the city double Bird’s catchment area this summer. That, in turn, will result in Bird doubling its fleet size in the city, Bird founder and CEO Travis VanderZanden said during Tuesday’s conference call. Existing major markets such as Washington DC and Marseille, France have also renewed their e-scooter programs throughout 2021, the company said.
VanderZanden said Bird entered 250 cities with fewer than 500,000 residents in 2021 through its fleet manager operating model, which will see scooter fleets handed over to third-party operators and is a steady revenue driver for Bird.
“Despite the seasonal impact on our revenue, this model is a key differentiator for Bird due to both the focus on profitability and the operational efficiencies we achieve with each partner managing approximately 100 vehicles on average. In fact, our pipeline for logistics partners remains robust even as we continue to raise our expectations. Looking ahead, we will continue to streamline and evolve our fleet manager program, including further investments in the technology platforms our partners use to manage their operations,” said the CEO.
Bird’s mileage margin before vehicle depreciation rose from 20% in 2020 to 49% in 2021, and Bird tells TechCrunch there’s scope to keep increasing that number as gross profit increases, saying that both Bird and fleet managers see more gains as occupancy increases, which will cause these percentages to increase.
Bird also relies on vehicle innovation to boost profits. the bird three, a new scooter with a larger battery and longer durability that hit the streets in summer 2021, has provided higher utilization rates than other models, which could be due to the novelty factor that new hardware brings. But Bird says its new scooter is seeing a higher usage rate during its launch because it’s just a great ride. It’s also much easier to repair and damage vectors are way down when using the vehicles, which could boost some of the company’s earnings metrics. At the end of 2021, the Bird Three made up 40% of Bird’s total fleet, but the company expects the vehicle to make up the bulk of its fleet by the end of the year.
The good thing about having the previous models still on the streets, though, is that Bird continues to fix them and get them back on the streets. There’s a balance here because the Bird Three outperforms these new vehicles, but it bears the entire depreciation charge, while these older vehicles are effectively giving Bird free rein because they’re already fully depreciated.
To further increase ridership, Bird will focus on meeting the use case of longer trips through deployment more of his Bird Bikes to share. It will also expand its smart bikeshare program, bringing local bikeshares to its app in hopes that this will lead to more mode shifting, which could eventually impact Bird.
How much growth does the startup need to get closer to profitability? Fourth quarter revenue of $54 million generated gross profit of $8.2 million compared to $13.5 million in the third quarter of 2021. The figure shows an improvement from -$2 million Gross profit a year ago as the first COVID winter loomed, but it’s still a far cry from operating expenses of $136.6 million in the quarter, a gap that was fairly expected to widen in the increased last quarter.
Bird still has cash on hand of $159.9 million in “total cash and cash equivalents and restricted cash and cash equivalents,” meaning it has some time to cut its losses.
But not infinite time. The Company’s operations consumed $131.6 million in cash in 2021 while its investing cash flows recorded a larger negative amount of $215.8 million during the same period. The company’s vehicle purchases are recorded as a reference in the investment cash flow.
Bird tells TechCrunch it’s focused on its core sharing business and chugging toward profitability. Overall, YOY growth is still trending higher and if those headwinds really turned into tailwinds, Bird could still give his conservative full-year guidance.
Bird’s Q4 revenues beat expectations, but investors don’t love its conservative 2022 growth forecast – TechCrunch Source link Bird’s Q4 revenues beat expectations, but investors don’t love its conservative 2022 growth forecast – TechCrunch