Bird’s fourth-quarter revenue beat expectations, but investors don’t like its conservative 2022 growth forecast – TechCrunch

Bird shared micromobility company disclosed his Fourth quarter and full year 2021 results Tuesday after the bell.

The report was the company’s second public earnings release after finalizing its SPAC deal in November. Since its combination, the company’s value has fallen, mirroring declines seen in other SPAC combinations. Still, the company raised capital and went public, so we now receive regular financial updates regarding its operations.

In the fourth quarter, Bird beat Wall Street revenue expectations, but its forecast fell short of analysts’ expectations and may fall short of the projections listed in its SPAC investor presentation. Let’s dig.

Bird’s finances

Bird’s annual revenue of $205 million beat expectations of $193.1 million. It was a victory for the company. The e-scooter company’s revenue is up 117% from its 2020 total. Naturally, 2020 was a year that heavily impacted all mobility-focused startups, so there are some nuances in the number, but it’s still a solid result.

During a call, Bird told TechCrunch that its 2021 revenue result was 9% higher than its SPAC forecast. Adjusted EBITDA for the full year 2021 was -$67 million, which also exceeded SPAC’s original guidance by 30%. Bird originally forecast an adjusted EBITDA loss of $96 million in 2021.

The company’s fourth quarter, however, was not as impressive as its annual results. Bird’s fourth-quarter 2021 revenue was $54 million, an increase from its year-ago result, but a decrease from its previous sequential quarter, which recorded $54 million. business of $65.4 million. Bird’s fourth quarter revenue beat Wall Street estimates $51.37 millionand despite declining quarter-over-quarter revenue, Bird’s gross margin in the fourth quarter was 15%, compared to 13.5% in the third quarter of the same year.

Most of Bird’s revenue came from vehicle sharing, but revenue from the sale of e-bikes has grown. In 2021, product sales accounted for approximately $17.8 million of Bird’s revenue, compared to $14.7 million in 2020. While this number does not represent massive growth, Bird has seen an improvement in the economy of its hardware business. Product sales revenue costs in 2021 were $17.3 million, compared to $22.7 million in 2020, which means the company is improving on hardware to reduce costs and increase l ‘efficiency.

Part of Bird’s overall revenue decline in the fourth quarter – compared to its third quarter 2021 metrics – is attributable to lower average trips per vehicle per day in the fourth quarter compared to its full year metrics. . Bird attributes the drop to seasonality, where Q4 and Q1 tend to be a bit lighter for key mobility metrics due to bad weather and lower tourism. COVID, of course, also affected ridership in the fourth quarter.

Bird expects a bigger market recovery in 2022 as cities across the United States drop mask mandates and tourism and travel are expected to return. The company also noted that rising gas prices due to the war in Ukraine should explain the increase in ridership as people turn to other modes of transportation.

On the cost side, total fourth quarter operating expenses at Bird rose sharply to $136.6 million from $40.0 million last quarter. Bird attributes that to $82.3 million in non-cash stock-based compensation expenses, which were triggered by his SPAC suit. Many companies are reporting short-term increases in stock-based compensation costs following public market debuts.

Gross margin for 2021 was 19% of revenue, and Bird expects that percentage to grow into the 20s over time.

Updated guidance

In the wake of its better-than-expected Q4 2021 revenue and full-year Adjusted EBITDA losses below promises, you might be surprised to learn that Bird’s shares are down in after-hours trading. Why the declines? Guidance, it seems.

Bird expects first-quarter revenue this year to be between $34 million and $36 million. Investors had estimated $49.0 million for the first quarter of 2022, based on Yahoo Finance averages. For the full year, Bird expects revenue of $350 million, an uninspiring estimate given the company’s previous goal of $401 million, as stated in its SPAC filing.

Bird forecast its 2022 with stable usage versus its 2021 results, rather than modeling the continued recovery from COVID and the continued return to work and tourism, the company told TechCrunch. The company also argued that hitting $350 million would still be a healthy 70% year-over-year growth rate from 2021’s $205 million. (We note here that $401 million in revenue would represent growth even faster!)

Bird says that despite the challenges, it was profitable by some metrics each quarter. The question remains, will it be able to maintain 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 footprint that could give it the kind of reach it will need to become fully profitable. Bird began operating scooter sharing in New York City in August, which he says has been a success and will lead the city to double Bird’s service area this summer. This in turn will lead to Bird doubling the size of its fleet in the city, Bird founder and CEO Travis VanderZanden said during Tuesday’s earnings call. Large existing markets like Washington DC and Marseille, France also renewed their e-scooter programs during 2021, the company said.

VanderZanden said Bird entered 250 cities with populations under 500,000 in 2021 through its fleet manager operating model, which involves handing over fleets of scooters to third-party operators and has been a steady source of revenue for Bird. .

“Despite the seasonal impact on our revenue, this model is a key differentiator for Bird, both because of the focus on profitability and the operational efficiencies we unlock, with each partner managing approximately 100 vehicles on average. In fact, our pipeline of logistics partners remains strong even as we continue to elevate our expectations. Going forward, we will continue to optimize and grow our fleet management program, including investing more in platforms. -technological forms that our partners use to manage their operations,” said the CEO.

Bird’s profit margin before vehicle depreciation has increased from 20% in 2020 to 49% in 2021, and Bird tells TechCrunch there is room to increase that number as gross profit increases, saying Bird and fleet managers see more benefits when usage increases. , which will cause these percentages to increase.

Bird also relies on vehicle innovation to generate profits. The Bird Three, a new scooter with a bigger battery and longer life that started hitting the streets in the summer of 2021, has had higher usage rates than other models, which could be attributed to the novelty factor provided by the new material. But Bird says its new scooter has seen higher user rates throughout its launch because it’s simply a great ride. It’s also much easier to repair, and damage vectors are down in vehicle deployment, which could give some of the company’s profit metrics a boost. At the end of 2021, the Bird Three made up 40% of Bird’s overall 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, however, is that Bird continues to fix them and get them back on the road. There is a balance here because the Bird Three outperforms these newer vehicles, but it bears the full depreciation burden, whereas these older vehicles effectively give Bird free rides because they are already fully depreciated.

To continue to increase ridership, Bird will focus on the use case of longer trips by deploying more of its Bird bikes for sharing. It will also expand its smart bike share program, in which it will integrate local bike shares on its app in the hopes that this will encourage greater fashion change, which may ultimately reflect on Bird.

How much additional growth will 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 gross profit of -2 million dollars from a year ago when the first COVID winter was upon us, but that’s still a far cry from the $136.6 million in operating costs in the quarter, a variance that was, in all honesty, widen in the last trimester.

Bird still has cash to the tune of $159.9 million in “total cash and cash equivalents and restricted cash and cash equivalents,” which means he has some time to reduce. his losses.

But not forever. The company’s operations consumed $131.6 million of cash in 2021, while its investing cash flow generated a larger negative $215.8 million during the same period. Company vehicle purchases are recorded in investing cash flow for reference.

Bird tells TechCrunch that he is focusing on his core sharing business and making progress toward profitability. Overall year-over-year growth is still on the rise, and if those headwinds really turned into tailwinds, Bird could finally make his conservative estimates for the full year.

Robert D. Coleman