Shared micromobility company Bird had a tumultuous second quarter. The company announced plans to dismantle its retail business, ceasing operations in unprofitable marketsthere was corporate upheaval including Bird CEO Travis Vanderzanden stepping down as president, laid off nearly 140 employees and received a warning from the New York Stock Exchange to trade too low.
Bird, one of two public micromobility companies that debuted through a special purpose acquisitionreported its second-quarter earnings for the year after the bell, showing year-over-year and quarter-over-quarter increases in revenue, but also an increase in expenses that still didn’t match the moves Bird has made to cut costs.
“Absent temporary distortions caused by the pandemic, these longer-term trends point to attractive demographic tailwinds for this industry as consumer spending preferences shift from goods to services,” VanderZanden said on Monday’s earnings call. “However, we must contend with any evolving macro environment, including significant near-term inflationary pressures on discretionary spending and resulting lower consumer sentiment, and adjust our cost structure to be resilient to economic headwinds.”
Shares of Bird were up 3.72% after hours, trading at $0.65.
Bird Q2 2022 Financials
The bird just missed Wall Street analysts expected $80.96 million revenue, bringing in $76.7 million for the quarter instead. This is an increase of 28% compared to the same quarter of the previous year. That’s also a huge improvement over Bird’s first-quarter revenue of $38 million, which is to be expected given that spring and summer are typically the most profitable seasons for any micromobility company.
Quarter-on-quarter, trips doubled to 14.5 million, with average trips per vehicle per day up 1.5x. While that’s an increase from last quarter’s 1x average trips per vehicle per day, many experts say a shared micromobility company really needs to average 2x trips per vehicle per day to break even. And in warmer seasons, that number should really be much higher. Byrd’s total number of trips did increase, but so did the sheer number of vehicles that Byrd put on the ground. Bird has 109,900 vehicles in the second quarter of 2022, compared to 69,500 last year and 78,900 in the most recent quarter.
Gross margins as a percentage of sharing revenue fell slightly to 27%, compared to 28% in the year-ago period, but were up from their first-quarter lows of 9%. Ride profit also increased on a year-over-year and quarterly basis to $38.4 million — up from $27.9 million last year and $13 million last quarter. Bird attributes this improvement to “further optimization” of the fleet manager’s revenue share as well as operational efficiencies. No doubt the implementation of Bird’s newest vehicle, Bird Three, resulted in longer battery and vehicle life; however, many industry experts say Bird will continue to spend too much on overhead because it doesn’t build e-scooters with replaceable batteries, which could help streamline the cost and time involved in charging and rebalancing scooters.
One would imagine that Bird’s move to close the retail division would reduce Bird’s operating expenses, but alas, expenses actually increased QoQ from about $100 million in the first quarter to $317.9 million in Q2. While general and administrative expenses were flat at about $85 million, Bird attributed that increase in expenses to $216 million in “asset impairment” as well as relocation costs from product sales. That put Bird at an operating loss of $331.2 million, compared with nearly $97 million in the last quarter, when Bird did not report an asset impairment on its balance sheet. Bird ended the quarter with a net loss of $310.4 million, down from $43.7 million in Q2 2021.
We also don’t seem to be seeing the cost savings from all these balance sheet cuts yet. While balance sheets do not explicitly state employee salaries, these expenses are usually included in total current liabilities. In the first quarter, that number was $160 million. Instead of that number shrinking as a result of reduced staff salaries, it actually increased in the second quarter to $230 million.
We’re not exactly clear what’s going on there, but Shane Torchiana, Bird’s new president, said many of the cost savings from the restructuring will come in the third quarter.
Bird ended the quarter with $57 million in cash, up from $35 million in the first quarter, but down from $128.6 million in the second quarter last year.
Bird’s eye view
Bird’s full-year guidance remained unchanged after the company revised its guidance last quarter. The company expects revenue between $275 million and $325 million for 2022 — Torchiana cautioned that if trends remain in line with Q2, Bird expects its full-year revenue to fall at the lower end of that spectrum. Bird’s expectation of annual cost savings of at least $80 million will be realized primarily in the third quarter, according to Torchiana.
“The majority of these cost savings will come as a result of cost reductions related to our product sales business and reductions in our corporate expenses,” Torchiana said.
The company also expects to achieve its first quarter of positive adjusted EBITDA in the third quarter of 2022 as well as for the full fiscal year of 2023.