Executive Summary

Q2 2023 delivered topline growth and significant margin expansion: revenue rose to $174.6M (+6.0% YoY), gross profit more than doubled to $11.8M, and adjusted gross margin reached 10.3% (up 260 bps YoY), marking a second consecutive record in adjusted gross profit .
Losses narrowed meaningfully: net loss improved to $(22.8)M from $(27.8)M YoY; adjusted EBITDA loss improved to $(9.7)M from $(18.9)M YoY, with management reiterating the goal of positive adjusted EBITDA in Q4 2023 .
Execution highlights included new RUBICONSmartCity deployments (Denver fleet of ~150 vehicles) and surpassing 100 municipal deployments, plus multi‑year commercial renewals (Gap 5‑yr; Goodyear 2‑yr) supporting higher‑margin SaaS and marketplace mix .
Estimate context: S&P Global consensus for Q2 2023 EPS and revenue was unavailable for RBT due to mapping constraints; therefore, beats/misses vs Street cannot be determined (see “Estimates Context”) [SpgiEstimatesError].

What Went Well and What Went Wrong

What Went Well

Adjusted gross margin inflected into double digits (10.3%), ahead of the company’s year‑end target, reflecting pricing actions, account high‑grading, and SaaS growth; CEO: “second consecutive quarter of record Adjusted Gross Profit… remain on target to achieve positive Adjusted EBITDA for the fourth quarter” .
Municipal SaaS momentum: Denver partnership deployed across >150 vehicles; milestone of >100 cities including eight of the top 20 U.S. cities—building a higher‑margin mix and strong reference base .
Commercial renewals bolster revenue durability: Gap 5‑year extension across >2,000 stores; Goodyear 2‑year renewal across >800 locations, underpinning marketplace volume and margin initiatives .

What Went Wrong

Commodity revenue declined sharply YoY amid pricing pressure, to $13.9M (‑43% YoY), constraining total revenue growth despite service revenue gains .
Continued net losses and interest burden: net loss of $(22.8)M; interest expense of $(8.1)M in the quarter reflects capital structure heaviness during the profitability transition .
Street comparison unavailable: Without S&P Global consensus, investors lack a standardized lens on beats/misses, limiting near‑term estimate momentum signals (see “Estimates Context”) [SpgiEstimatesError].

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

Metric	Q2 2022	Q1 2023	Q2 2023
Revenue ($USD Millions)	$164.6	$181.1	$174.6
Gross Profit ($USD Millions)	$5.5	$9.3	$11.8
Gross Profit Margin (%)	3.3%	5.2%	6.8%
Adjusted Gross Profit ($USD Millions)	$12.7	$16.1	$17.9
Adjusted Gross Margin (%)	7.7%	8.9%	10.3%
Net Loss ($USD Millions)	$(27.8)	$(9.5)	$(22.8)
Adjusted EBITDA ($USD Millions)	$(18.9)	$(14.0)	$(9.7)
Diluted EPS ($USD)	N/A (pre‑merger presentation)	$(0.05)	$(0.12)

Revenue Mix

Metric	Q2 2022	Q1 2023	Q2 2023
Service Revenue ($USD Millions)	$140.3	$166.4	$160.6
Recyclable Commodity Revenue ($USD Millions)	$24.3	$14.7	$13.9
Total Revenue ($USD Millions)	$164.6	$181.1	$174.6

Additional P&L and Cash Items (Q2 2023)

Interest expense: $(8.1)M .
Weighted avg shares (Q2 2023 three-months): 106,211,259 .
Cash and cash equivalents at 6/30/2023: $23.5M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA	Q4 2023	“Expect to achieve positive Adjusted EBITDA for Q4 2023.” (Q4’22 release)	“Remain on target to achieve positive Adjusted EBITDA for the fourth quarter of this year.” (Q2’23)	Maintained
Adjusted Gross Margin	FY 2023	Target “double digits by end of 2023” (strategic plan goal; achieved early per year‑in‑review summary)	Achieved 10.3% in Q2 2023	Achieved ahead of plan
Liquidity Outlook	Q2 2023	N/A (no prior numeric guidance)	~$27M available (cash + revolver) at quarter‑end commentary (CFO on call)	Informational update

Note: The company did not issue explicit quarterly revenue/EPS ranges in the Q2 2023 materials; guidance was primarily directional on profitability .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2022, Q1 2023)	Current Period (Q2 2023)	Trend
Bridge to Profitability / Cost Actions	Plan launched; expense reductions, financing, pushing maturities; Walmart extension (Q4’22)	Continued cost reductions; trajectory to positive adj. EBITDA by Q4 reiterated	Improving execution
SaaS (RUBICONSmartCity) Expansion	New partnerships (Miami, Atlanta); momentum building (Q1’23)	Denver launch across >150 vehicles; milestone of >100 cities	Accelerating
Commodity Markets	Limited commentary (Q4’22/Q1’23)	Commodity revenue down ~43% YoY; limited near‑term recovery expected	Headwind persists
Palantir / AI & Tech Optimization	Palantir licensing costs cited in 2022 impacts (Q4’22)	Management highlighted AI‑enabled process optimization (invoice processing, efficiency) via Palantir partnership	Strategic enablement
Liquidity & Financing	Debt push‑outs; upsized revolver (Q4’22)	~$27M available liquidity (cash + revolver) at Q2 quarter‑end; expense cuts progressing	Stabilizing

Management Commentary

CEO Phil Rodoni (Q2 2023 press release): “We are excited to announce our second quarter 2023 results, which include a second consecutive quarter of record Adjusted Gross Profit… we remain on target to achieve positive Adjusted EBITDA for the fourth quarter of this year.”
Strategic focus: “Having accomplished its initial foundational objectives, Rubicon can now focus on driving profitable growth through customer wallet share expansion, new product offerings, and improved operational efficiency.”
Municipal leadership: “RUBICONSmartCity… deployed in more than 100 cities, including eight of the top 20 U.S. cities by population.”

Q&A Highlights

Profitability path and cost discipline: Management reiterated price increases, account optimization, and cost reductions driving adjusted margin expansion toward positive adjusted EBITDA by Q4 .
Liquidity and balance sheet: CFO referenced ~$27M available via cash and revolver at quarter‑end, indicating focus on financial flexibility while executing the plan .
Technology enablement: Palantir‑enabled AI initiatives improving internal workflows (e.g., faster invoice processing) and operational optimization were emphasized as tangible drivers .
Customer momentum: Renewals and municipal additions discussed as supporting volume and higher‑margin mix .
For full transcript reference: See Q2 2023 call published by Seeking Alpha and others .

Estimates Context

S&P Global consensus for Q2 2023 EPS and revenue was unavailable for RBT due to a CIQ mapping constraint; as such, we cannot quantify beats/misses versus Street for this quarter [SpgiEstimatesError].
Implication: Without standardized consensus, investors should anchor on company‑reported trend metrics (adjusted margin trajectory, adjusted EBITDA improvement) and third‑party coverage for qualitative color .

KPIs and Operating Highlights

KPI	Q2 2023 Status
RUBICONSmartCity Deployments	>100 cities; eight of top 20 U.S. cities
Denver Deployment Scope	~150 vehicles across solid waste and recycling fleet
Gap, Inc. Renewal	5‑year extension; >2,000 stores
Goodyear Renewal	2‑year renewal; >800 locations

Key Takeaways for Investors

Margin expansion is the core narrative: adjusted gross margin reached 10.3% and adjusted EBITDA loss contracted to $(9.7)M, reinforcing the Q4 positive adjusted EBITDA target .
Higher‑margin mix shift continues via municipal SaaS and large‑account renewals (Denver, 100+ cities; Gap and Goodyear), supporting profitability trajectory despite commodity headwinds .
Commodity price pressure is a known drag; monitor service revenue growth and SaaS penetration to offset cyclical commodity volatility .
Liquidity appears adequate to execute near‑term plan (~$27M cash + revolver at Q2‑end per CFO), but interest expense remains a watch‑item until profitability inflects .
Near‑term trading lens: Narrative catalysts are tied to delivering Q3/Q4 margin progression and confirming the Q4 positive adjusted EBITDA milestone; any incremental municipal wins/large renewals could support sentiment .
Medium‑term thesis: If the company sustains double‑digit adjusted gross margins and scales SaaS/marketplace efficiencies, de‑leveraging via improved operating cash flow and reduced net losses becomes more plausible .

Sources

Q2 2023 8‑K press release with financials and reconciliations .
Q1 2023 8‑K press release and financials .
Q4 2022 8‑K press release and financials .
Municipal and commercial press releases (Denver; 100‑city milestone; renewals) .
Call coverage and quantitative context (Waste Dive; call transcript references) .

Disclaimer: S&P Global consensus estimates for RBT Q2 2023 were unavailable due to a CIQ mapping constraint, so Street comparisons could not be performed [SpgiEstimatesError].

Rubicon Technologies, Inc. (RBT)·Q2 2023 Earnings Summary