Rubicon Reports First Quarter 2024 Financial Results
Rubicon completes transformative transaction to accelerate journey to profitability
NEW YORK--(BUSINESS WIRE)--May 20, 2024--
Rubicon Technologies, Inc. ("Rubicon" or the "Company") (NYSE: RBT), a leading provider of technology solutions for waste and recycling generators, today reported financial and operational results for the first quarter of 2024.
First Quarter 2024 Financial Highlights Including Discontinued Operations
-- Revenue was $166.1 million, a decrease of $15.0 million or 8.3%
compared to $181.1 million in the first quarter of 2023.
-- Gross Profit was $10.1 million, an increase of $0.8 million or 8.2%
compared to $9.3 million in the first quarter of 2023.
-- Adjusted Gross Profit was $17.1 million, an increase of $1.0 million or
5.9% compared to $16.1 million in the first quarter of 2023.
-- Gross Profit Margin was 6.1%, an increase of 93 bps compared to 5.2% in
the first quarter of 2023.
-- Adjusted Gross Profit Margin was 10.3%, an increase of 138 bps compared
to 8.9% in the first quarter of 2023.
-- Net Loss was $(17.2) million, a decrease of $7.7 million or 81.5%
compared to $(9.5) million in the first quarter of 2023.
-- Adjusted EBITDA was $(11.0) million, an improvement of $2.9 million or
20.9% compared to $(14.0) million in the first quarter of 2023.
Operational and Business Highlights
-- On May 7, 2024 the Company announced that it had sold its fleet
technology business and issued convertible preferred stock in Rubicon to
Rodina Capital, a private investment firm based in Florida, in a sale
with a total transaction value of $94.2 million, which includes up-front
cash of $61.7 million and an earnout consideration of $12.5 million that
could become payable in 2024. The Company also issued $20.0 million of
convertible preferred stock to Rodina Capital.
-- Rubicon participated in a competitive evaluation and won a significant
contract with a new customer in the grocery sector at the beginning of
the second quarter. Providing waste and recycling services to over 500
stores across the United States and Canada, this is a valuable contract
for Rubicon, with strong potential for incremental growth opportunities
along the way. This customer is already experiencing the full benefits of
Rubicon's platform for scalable waste and recycling services, which
supports their efforts to reduce environmental impact while providing
exceptional value and service to their own customers. As a leader in
sustainability with multiple waste streams, this customer's needs and
values align with what Rubicon does best, reducing costs and increasing
diversion rates. Rubicon has achieved both with other grocery customers,
and we look forward to driving similar results with this new
relationship.
Sale of Fleet Technology Business Unit
On May 7, 2024, Rubicon announced that the Company has sold its fleet technology business unit and issued convertible preferred stock in Rubicon to Rodina Capital, a private investment firm based in Florida, in a sale with a total transaction value of $94.2 million, which includes up-front cash of $61.7 million and an earnout consideration of $12.5 million that could become payable in 2024, along with a $20.0 million issuance of convertible preferred stock.
These transactions are transformational for the Company, ensuring Rubicon's long-term viability, improving its balance sheet by reducing debts and providing additional liquidity to enable the Company to quickly achieve its business objectives, accelerate its journey to profitability, and continue growing its core business. Importantly, it marks a return to Rubicon's core principles, a business centered on a customer-focused approach that has been instrumental in the Company's growth from the outset. This strategic move underscores Rubicon's dedication to the RUBICONConnect$(TM)$ product, which serves commercial waste generators from small to medium-sized businesses to Fortune 500 companies. Many of the Company's commercial customers are looking to Rubicon to help them achieve sustainability goals with tailored zero waste and circular economy solutions, including through the Company's recently launched Technical Advisory Services $(TAS.AU)$. This sale and the new capital will be dedicated to improving services and strengthening Rubicon's longstanding relationship with more than 8,000 vendor and hauler partners, 90 percent of which are small, independent businesses.
"We are pleased to report our results for the first quarter, demonstrating our continued momentum through year-over-year Adjusted EBITDA improvement on our path to profitability. This performance is a testament to the dedication and hard work of our team, as well as the trust and support of our customers," said Phil Rodoni, Chief Executive Officer of Rubicon. "The recent sale of the fleet technology business unit aligns with our strategic vision to lead our industry by innovating and investing in sustainable practices that meet the evolving needs of both our hauler network and customer base. We are excited to leverage this newfound financial agility to drive growth, enhance our competitive edge, and deliver exceptional value to our shareholders and customers alike."
Webcast Information
The Rubicon Technologies, Inc. management team will host a conference call to discuss its first quarter 2024 financial results this afternoon, Monday, May 20, 2024, at 5:00 p.m. ET. The call can be accessed via telephone by dialing (929) 203-2112, or toll free at $(888.UK)$ 660-6863, and referencing Rubicon Technologies, Inc. A live webcast of the conference will also be available on the Events and Presentations page on the Investor Relations section of Rubicon's website . Please log in to the webcast or dial in to the call at least 10 minutes prior to the start of the event.
About Rubicon
Rubicon builds AI-enabled technology products and provides expert sustainability solutions to waste generators and material processors to help them understand, manage, and reduce waste. As a mission-driven company, Rubicon helps its customers improve operational efficiency, unlock economic value, and deliver better environmental outcomes. To learn more, visit rubicon.com.
Non-GAAP Financial Measures
This press release contains "non-GAAP financial measures," including Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA, which are supplemental financial measures that are not calculated or presented in accordance with generally accepted accounting principles (GAAP). Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this press release. The non-GAAP financial measures in this press release may differ from similarly titled measures used by other companies. Definitions of these non-GAAP financial measures, including explanations of the ways in which Rubicon's management uses these non-GAAP measures to evaluate its business, the substantive reasons why Rubicon's management believes that these non-GAAP measures provide useful information to investors and limitations associated with the use of these non-GAAP measures, are included under "Use of Non-GAAP Financial Measures" after the tables below. In addition, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included under "Reconciliations of Non-GAAP Financial Measures" after the tables below.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements. When used in this press release, the words "could," "should," "will," "may," "believe," "anticipate," "intend," "estimate," "expect," "project," the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon current expectations, estimates, projections, and assumptions that, while considered reasonable by Rubicon and its management, are inherently uncertain; factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the outcome of any legal proceedings that may be instituted against Rubicon or others following the closing of the business combination; 2) Rubicon's ability to continue to meet the New York Stock Exchange's listing standards; 3) changes in applicable laws or regulations; 4) the possibility that Rubicon may be adversely affected by other economic, business and/or competitive factors; 5) Rubicon's execution of anticipated operational efficiency initiatives, cost reduction measures and financing arrangements; and 6) other risks and uncertainties set forth in the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (filed March 28, 2024 with the Securities and Exchange Commission (the "SEC")), Registration Statement on Form S-3, as amended, filed with the SEC, and other documents Rubicon has filed with the SEC. Although
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