Helbiz’s third-quarter earnings show a company that is burning through cash, failing to grow revenue and losing passengers year after year. However, Helbiz’s burgeoning sports streaming service did make some small gains.
Micromobility SPAC reported its third-quarter earnings on Monday, the same day as its only public-market competitor, Bird. Neither company is doing well operationally or on the stock market. Bird issued a warning of growing concern and admitted to overstating his income for two years. Both companies are trading below $1.00 and are at risk of going public.
Helbiz closed the quarter with $3.7 million in revenue, which is down from $4.7 million last year, and just $3.3 million in cash. Meanwhile, the company is also spending more and losing more on operations. Helbiz’s operating expenses reached $26.5 million, an increase from the $24.4 million Helbiz spent in the third quarter of last year. Operating losses are $22.8 million, up from $19.7 million last year.
Most of the revenue loss came from Helbiz’s mobility segment. Shared scooter and bike rides alone generated $2.5 million in revenue this quarter, compared to $3.9 million in the third quarter of 2021. The media division of Helbiz, a sports streaming platform, generated more revenue this year than last at $1.1 million, up from $760,000 last year.
Helbiz reported $129,000 in “other income,” which likely refers to the company’s ghost kitchen service, pointing to some growth in that questionable business foray. The company recently partnered with Glovo and Deliveroo in Italy to feature its Helbiz Kitchen restaurants on both food delivery apps.
In a regulatory filing, Helbiz says it believes “increasing markets for expansion is critical to the success of our core business for the foreseeable future.” However, compared to last year, the number of trips made by Helbiz passengers decreased by 30.7%. Strangely, between the second and third quarters, the number of quarterly unique users of Helbiz increased slightly by around 4,820 additional unique users. However, in the same period, the number of trips completed decreased by around 78,000 trips, suggesting that perhaps more users decided to travel in a Helbiz and then thought that once would be enough.
In October, Helbiz completed the acquisition of Wheels, promising to generate “more than $25 million in revenue for the full year of 2022,” leveraging Wheels’ user base of 5 million passengers and expanding into new markets such as Los Angeles. During the first nine months of 2022, Helbiz generated $11.9 million in revenue. The company would need to earn another $13 million in the fourth quarter, which is typically the slowest in the micromobility industry due to colder weather, to meet that goal.
Helbiz relies on a lifeline in the form of a Standby Stock Purchase Agreement (SEPA) with YA II PN, a hedge fund operated by Yorkville Advisors Global. Helbiz will attempt to sell Yorkville up to $13.9 million of its shares at any time during the next 24 months.
The company said it may also have to seek additional equity or debt financing, but there is no guarantee it will be able to raise funds on acceptable terms or at all.
Perhaps investors were encouraged by Helbiz’s SEPA or streaming gains, because Helbiz shares were up 3.09% today. The shares are trading at $0.22.