Zoomcar Holdings - Earnings Call - Q1 25/26

Transcript

Speaker 1

Before we begin, I would like to draw your attention to the disclaimer slide. During this presentation, we will make forward-looking statements regarding upcoming events and our expectations for Zoomcar's business and financial performance. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those stated. Please refer to our press release issued earlier today, as well as our annual and quarterly filings with the SEC, for a detailed discussion of these risks. We will also reference certain non-GAAP measures during today's presentation. These are meant to provide additional insights into our performance and should be considered alongside our GAAP results. With that, let me hand it over to our CEO, Deepankar Tiwari.

Speaker 0

Thank you, Anirudh, and hello everyone. Q1 financial year 2025-2026 was another strong quarter for Zoomcar, delivering contribution profit of $1.14 million, which represents 49% of the revenue, up from $0.46 million, or 20% of the revenue a year ago. This also marks our seventh consecutive quarter of positive contribution profit and the fourth in a row above $1 million. Our focus on improving both guest and host experience continues to pay off. Repeat user rates rose to 13% from 9% last year, and high-quality host rates rated 4.5 or higher increased to 46% from 30%. These are important indicators of the platform's health and loyalty on both sides of our marketplace. Next slide. Partnerships remain a key lever in strengthening our competitive advantage. This quarter, we executed four high-impact initiatives.

With Google Cloud, we integrated generative AI tools that have already reduced host onboarding time by 30% and improved our trust and fraud detection. With CARS24, which is India's largest platform for used car transactions, we rolled out GPS-enabled pre-delivery inspections to improve safety, transparency, and vehicle quality. Through our Home Delivery expansion, we have partnered with driver platform networks to double delivery coverage, making it easier and faster for guests to access vehicles. We also launched ZoomPro, our dedicated platform for business fleet partners, providing real-time fleet insights, pricing controls, and earning dashboards to help multi-car hosts and operators improve quality, efficiency, and scale. These initiatives not only enhance customer experience but also support long-term growth by deepening engagement and improving operational efficiency. Customer loyalty is central to our strategy. The investments we have made in product enhancements, in-trip communication, and supply quality are delivering results.

Repeat user rates increased 45% year over year. High-quality car rated 4.5 or higher increased by 54% over the previous comparable quarter to 46% of active supply. These gains translate directly into better unit economics, higher lifetime value, and stronger retention across the marketplace. We are maintaining profitability momentum with our seventh consecutive quarter in the green on a contribution basis. Contribution profit per booking nearly tripled year on year to $10.89, up from $4.07, driven by better cost management and improved booking quality. With that, let me hand it over to our CFO, Sachin Gupta, to walk through our financials.

Speaker 2

Thank you, Deepankar. Thanks, everyone, for taking time out to join today. We remain focused on strengthening our balance sheet. In fiscal year 2025, we raised about $16.5 million in gross proceeds. On top of that, we raised another $0.6 million during the current fiscal year. These funds have been primarily deployed towards growth initiatives and selective debt payment. We are actively pursuing further capital through bridge financing or public raise with our S-1 already filed with the SEC. Debt restructuring efforts continued, aimed at reducing interest burden and increasing sustainability.

Just to provide a perspective, while we incurred a loss from operations of about $1.8 million and an additional cost of about $0.3 million on account of finance costs during the current fiscal quarter, we still managed to keep the total liabilities at par with the total liability at the end of fiscal year ending March 31, 2025, due to all of the restructuring efforts that we have been taking on an ongoing basis. Moving on to the operational and financial measures, let me highlight a few key numbers for the quarter ended June 30, 2025, versus the same quarter last year. Bookings served by the platform were 104,549 versus 112,944, a marginal decline of 7%. However, we managed to improve the retention and repeat usage of the platform on both sides of the marketplace spectrum, with improved quality and higher repeat usage.

This meant that our gross booking value was about $6.47 million, which is 4% higher on a year-on-year basis without dollars being spent on performance marketing for more than a year now. Contribution profits were about $1.14 million, which is a 148% improvement year over year, with margins improving from 20% to 49%. Just to give you a perspective here, while we only used to generate about $4.07 for every booking served during the quarter ended June 30, 2024, we are now generating a record contribution profit of $10.89, almost $11, for every booking that is served by the platform.

Loss from operations declined by a significant 48% to about $1.76 million during the current fiscal quarter ended June 30, 2025, as compared to a loss from operations of $3.37 million during the previous comparable quarter, with the similar improvements reflected in adjusted EBITDA loss year over year in terms of 47% improvement. It is also worth mentioning here that the significant reduction in loss from operation in the current quarter ended June 30, 2025, is in addition to already a significant reduction that the company was able to achieve of about 67% during the previous concluded fiscal year ended March 31, 2025, reflecting the company's stronger focus on unit economics, disciplined cost management, and a sharper focus on profitability and long-term value generation for all our stakeholders. Our adjusted EBITDA continues to trend upwards over the past several quarters, reflecting our operational efficiency gains.

This trajectory positions us well to achieve breakeven in the near term. The next couple of slides provide a detailed reconciliation of contribution profit and adjusted EBITDA. These measures are being used by the management to evaluate the performance of the business on a monthly, quarterly, and annual basis, and hence, we believe that providing these measures to our stakeholders gives much more clarity of the current progress and the directional growth path that the company is currently on. However, we encourage you to review them in conjunction with our GAAP financials measures for a complete understanding of our performance. What we have done here is we have summarized six big wins that we have been able to achieve during the current quarter as compared to the previous comparable quarter.

These metrics here, from a higher repeat usage and host quality to improved contribution margin and reduced losses, show how disciplined execution has strengthened the business. It also shows that our playbook is working, and we see a clear path to scaling it further in the fiscal year ended 2026.

Speaker 1

Thank you, Deepankar and Sachin. Thanks for sharing this. Everyone who's joined us, this concludes Zoomcar's Q1 FY 2025-2026 earnings call. For more details, please refer to our press release published earlier in the day and earnings material available on our investor relations site. If you have any additional questions, feel free to reach out to us at [email protected]. Thank you and have a great day.