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Urgent.ly Inc. (ULY)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered sequential revenue growth and an inflection to positive non-GAAP operating income, with revenue of $32.94M (+4.0% QoQ, -9.1% YoY) and non-GAAP operating income of $0.12M; gross margin held at 25% (up 400 bps YoY) .
  • Revenue modestly beat consensus ($32.94M vs $32.30M), while GAAP EPS missed (actual -$3.63 vs consensus -$2.40); estimate depth remains thin (two estimates) *.
  • Operating discipline continued: GAAP opex fell 28% YoY to $9.88M and GAAP operating loss narrowed 70% YoY to -$1.77M, driven by autonomous-related cost reductions and process optimization .
  • Q4 2025 guidance: revenue $30–$33M and non-GAAP operating loss < $0.5M, targeting sustained non-GAAP break-even; sequential deceleration reflects normal seasonality and mix, while renewals and new insurance pilots ramp .
  • Balance sheet recapitalization and NASDAQ compliance extension to Feb 16, 2026 act as near-term stock narrative catalysts alongside AI productization (SPARK) and new logo momentum (Sony Honda Mobility Afeela) .

What Went Well and What Went Wrong

What Went Well

  • Achieved positive non-GAAP operating income for the first time ($0.12M), signaling profitability inflection and disciplined execution .
  • Gross margin expanded to 25% (from 21% YoY) on improved dispatch mix and technology optimizations managing provider costs; Q3 gross profit rose 4% YoY to $8.11M .
  • Contract momentum: productive renewal cycle across OEM/fleet partners (2–5 year contracts) and insurance pilot wins; management reiterated 8th consecutive quarter meeting revenue guidance commitments .

Management quotes:

  • “We have achieved positive non-GAAP operating income… an important milestone… signals a profitability inflection point.” — CEO Matt Booth .
  • “Gross margin was 25%… increase primarily related to the mix of service dispatches and continued technology optimizations.” — Controller Andy Makkai .

What Went Wrong

  • GAAP EPS missed consensus (actual -$3.63 vs -$2.40), and net loss remained sizable at -$5.18M despite YoY improvement *.
  • Year-over-year revenue decline (-9%) driven by early termination of a top-five global OEM customer and reductions in autonomous revenue; mix-driven growth offsets were modest .
  • Leverage and liquidity constraints persist: cash $4.00M vs principal debt ~$61M, necessitating balance sheet recapitalization; NASDAQ listing compliance remains a monitored risk despite extension .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$36.246 $31.272 $31.687 $32.943
GAAP EPS ($)-$9.49 -$4.69 -$4.50 -$3.63
Gross Profit ($USD Millions)$7.765 $7.989 $7.933 $8.111
Gross Margin (%)21% 26% 25% 25%
Operating Metrics ($USD Millions)Q3 2024Q1 2025Q2 2025Q3 2025
GAAP Operating Expenses$13.656 $10.436 $10.086 $9.880
Non-GAAP Operating Expenses$10.710 $8.363 $8.132 $7.988
GAAP Operating Loss-$5.891 -$2.447 -$2.153 -$1.769
Non-GAAP Operating Income (Loss)-$2.945 -$0.374 -$0.199 $0.123
KPIsQ3 2024Q1 2025Q2 2025Q3 2025
Dispatches (units)—189,000 191,000 194,000
Consumer Satisfaction (stars)—4.6 4.7 4.6
Estimates vs ActualsQ3 2024Q1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD Millions)$36.400*$31.100*$31.000*$32.300*
Revenue Actual ($USD Millions)$36.246 $31.272 $31.687 $32.943
EPS Consensus Mean ($)-$8.04*-$2.88*-$2.70*-$2.395*
GAAP EPS Actual ($)-$9.49 -$4.69 -$4.50 -$3.63
# of EPS Estimates1*1*2*2*
# of Revenue Estimates1*1*2*2*

Values retrieved from S&P Global.*

Balance sheet snapshot (context):

  • Cash and cash equivalents $4.00M; principal debt ~$61M as of 9/30/2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2025n/a$30–$33M New
Non-GAAP Operating LossQ4 2025n/a< $0.5M; target break-even New
Non-GAAP Operating Break-evenQ3 2025Breakeven targeted Achieved $0.12M non-GAAP OI Achieved
RevenueQ3 2025$31–$34M Actual $32.94M Met

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesDynamic pricing, predictive maintenance; SPARK AI analyzer launched to cut wait times (Miami -20 min avg) Platform leverages AI/ML; website relaunch to showcase AI dashboards and capabilities Expanding productization and visibility
Insurance strategy (Champion-Challenger)Re-entering insurance; signed premium provider; mid-tier outreach; dual-source model examples Pilot awarded with large-scale insurer; two mid-tier insurers in redlines; premium provider launch imminent Pipeline building toward revenue
Renewals/new logosFleet renewal wins; ongoing negotiations; OEM/fleet renewals in flight Productive renewal cycle; 2–5 year contracts; new fleet/autonomous/affinity contracts signed/in redlines Strengthening base revenue
Macro/tariffsn/aBusiness seen as anti-cyclical; no tariff impacts observed; older vehicles may increase incidents Cautiously constructive
NASDAQ compliance/recapCredit facilities extended; asset-based revolver; capital structure optimization NASDAQ extension granted to 2/16/2026; pursuing balance sheet recapitalization De-risking listing; recap focus
Cost disciplineOtonomo-related cost reductions; opex improvements GAAP opex -28% YoY; non-GAAP opex -25% YoY Sustained efficiency

Management Commentary

  • Strategic priorities: return to growth via renewals and new customer partners, maintain non-GAAP break-even through operational improvements and margin expansion, and transform roadside solutions with product innovation .
  • AI differentiation: “Our digitally native platform, leveraging AI and machine learning… predictive models to enhance performance… using temporal, spatial, and network data.” — CEO Matt Booth .
  • Profitability focus: “We met our stated guidance to achieve break-even on a non-GAAP operating basis during the third quarter of 2025.” — Controller Andy Makkai .
  • Balance sheet: pursuing recapitalization to unlock shareholder value; NASDAQ panel granted continued listing extension through Feb 16, 2026 .

Q&A Highlights

  • Macro sensitivity: Management views the business as anti-cyclical; economic weakness and deferred vehicle repairs can increase incident volume; no tariff impacts seen to date .
  • Growth drivers and seasonality: Insurance pilots and new logos expected to ramp; management sees seasonality flattening with AI/ML optimization; Q4 revenue guide reflects mix and seasonality .
  • Renewals and pipeline: Strong renewal cycle; multiple insurance providers in negotiations; EV OEM partnership (Sony Honda Mobility Afeela) to launch in 2026 .
  • OpEx trajectory: Additional (but modest) efficiencies expected; autonomous-related compliance costs largely behind the company .
  • Guidance clarity: Q4 revenue $30–$33M and non-GAAP operating loss < $0.5M; targeting continued non-GAAP break-even .

Estimates Context

  • Q3 revenue modestly beat consensus ($32.94M actual vs $32.30M consensus); GAAP EPS missed (-$3.63 actual vs -$2.395 consensus). Estimate depth is limited (two estimates for Q3), heightening potential volatility in perceived “beats/misses” *.
  • Prior quarters also showed revenue beats versus consensus (Q1: $31.27M vs $31.10M; Q2: $31.69M vs $31.00M), supporting the narrative of execution on guidance .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Profitability inflection: Positive non-GAAP operating income in Q3 alongside continued opex discipline validates the cost structure reset and supports the path to sustained break-even .
  • Top-line stabilization: Second consecutive sequential revenue increase and consistent delivery against guidance suggest early growth momentum into 2026, underpinned by renewals and insurance pilots .
  • Margin durability: Gross margin held at 25% on dispatch mix and optimization; management reiterates a 25–30% midterm target, implying potential leverage as volume scales .
  • Balance sheet is the swing factor: Low cash ($4.00M) vs high principal debt (~$61M) and NASDAQ compliance extension point to recapitalization outcomes as key stock drivers over the next 3–6 months .
  • AI differentiation as a commercial wedge: SPARK and broader AI/ML capabilities materially improve service times and performance, aiding renewals and new logo wins across OEM, fleet, and insurance channels .
  • Near-term trading setup: Q4 guide implies softer sequential revenue on seasonality/mix; watch for insurance pilot launch updates, renewal disclosures, and recap milestones; thin estimate coverage amplifies headline surprises *.
  • Medium-term thesis: Dual-source insurance adoption, OEM/EV wins, and AI-enabled unit economics can expand share while maintaining margin targets; successful recapitalization would de-risk the equity and improve strategic flexibility .