Zoomcar’s scale shrinks 19% in Q3 FY24, improves bottom line

Zoomcar has announced its financial results for the quarter ending December 2023 or Q3 FY24. The company’s scale slipped nearly 19% on a yearly basis but it also turned profitable during the period.

The improvement in the bottomline is the result of a one-time gain. We will detail this later in the story, for now, let's decode its revenue streams and operations.

The NASDAQ-listed company’s net revenue declined 18.8% to $2.42 million (Rs 20 crore) during the third quarter of the ongoing financial year in contrast to $2.98 million (Rs 24.7 crore) recorded in Q3 FY23, as per the company’s filings sourced from the US’ Securities and Exchange Commission.

“Our third fiscal quarter results capped a strong performance in our ongoing efficiency efforts as we achieved record gross profit and non-GAAP contribution profit while also paving the way for meaningful revenue growth over the next several quarters,” said Greg Moran, CEO and co-founder of Zoomcar. 

In December, Zoomcar inked a merger agreement with Innovative International Acquisition Corp and subsequently became a publicly listed entity. The decade-old company operates across more than 50 cities globally (majorly in India) and has over 3 million active users and over 25,000 vehicles registered on its marketplace.

Coming to expenses, operating cost of the company (excluding G&A costs) shrank 24% to $2.2 million (Rs 18.26 crore) in Q3 of FY24 from $2.9 million (Rs 24 crore) in the same quarter of the last fiscal year. As per the company, the decrease in operating expenses was a result of a decrease in sales and marketing costs and technology and development costs.

At the end, Zoomcar posted $14.4 million (Rs 119.52 crore) profits as compared to $8.7 million (Rs 72.21 crore) net loss in the same period last year. This improvement was primarily due to a one-time gain of $28.9 million from a deSPAC transaction, which involved financial instrument conversions at fair market value. Additionally, the company enhanced its gross margin profile and saw a decrease in host accident-related reimbursements during the period.

As per the filings, adjusted EBITDA loss of the company improved to $4 million from $5.2 million in the same period last year, this could be attributed to the cost reduction measures the company had undergone during the period. As of December 31, 2023, the company had total negative working capital of $26.2 million, including $6.1 million in cash.

The Indian entity of Zoomcar saw its revenue decline for the first time in FY23. As per its regulatory filing in India, the company’s revenue from operations declined to Rs 69 crore ($8.3 million) in FY23 from Rs 95 crore ($11.4 million) in FY22.