In the second quarter, Bird had a rough time. The company announced plans to dismantle its retail business, shut down operations in unprofitable markets, had a corporate shakeup, and was warned by the New York Stock Exchange for trading too low.
Bird, one of two public micromobility companies that debut via a special purpose acquisition, presented its Q2 earnings for the year after the bell, showing an increase in revenue year over year and quarter over quarter, but also an increase in spending that doesn't yet square up to the moves
The long-term trends point to the attractive demographic tailwinds for this industry as consumer spending preferences shift from goods to services. We have to contend with any evolving macro environment, including significant near-term inflation pressures on discretionary spending and resulting lower consumer sentiment, as well as adjust our cost structure to be able to weather economic downturns.
Bird's stock is up afterhours.
Wall Street expected Bird to bring in $82 million in revenue, instead it brought in $7 million. This is an increase from the same time last year. Bird's Q1 revenue was $38 million, which is to be expected given that spring and summer are usually any micromobility company's most profitable season.
The number of rides doubled from quarter to quarter and averaged 1.5x per day. Many experts think that a shared micromobility company should be averaging 2x rides per vehicle per day to turn a profit. It should be much higher in the warmer months. The total number of rides increased, but the number of vehicles Bird put on the ground decreased. In the second quarter, Bird had 109,900 vehicles deployed, compared to 69,500 last year and 78,900 last quarter.
The gross margins were down slightly at 27%, compared to 28% in the prior year period, but up from their low of 9% in the first quarter. The ride profit has gone up every year and last quarter. Bird said the improvement was due to further maximization of the fleet manager revenue share. Bird will continue to spend too much on overhead for not building e-scooters with swappable batteries, which can help streamline the costs, despite the fact that the Bird Three has led to longer battery and vehicle life.
Spending increased from around $100 million in the first quarter to over $300 million in the second quarter, despite the fact that Bird had moved to sunset its retail unit. Bird attributes the increase in expense to the costs of shifting away from product sales and the inefficiencies of assets. Bird had an operating loss of $331.2 million, compared to almost 97 million last quarter, when Bird did not report any impairment of assets. Bird had a net loss of $310.4 million in the second quarter of the year.
We don't seem to be seeing the cost savings from all those layoffs on the balance sheet just yet. Balance sheets don't point to employee salaries, but they are included in total current liabilities. The first quarter's total was $160 million. In the second quarter it increased to $230 million, instead of decreasing as a result of lower staff wages.
Many of the cost savings from restructuring will show up in the third quarter, but we don't know what's happening there.
Bird had $58 million in cash at the end of the quarter, up from $35 million in the first quarter, but down from $128.6 million in the second quarter of last year.
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The company revised its guidance last quarter. Bird expects its revenue to fall on the lower end of that spectrum if trends are to remain consistent with Q2 In the third quarter, Bird expects to realize an annual run-rate cost savings of at least 80 million dollars.
The majority of the cost savings will come from reducing expenses associated with our product sales business.
In the third quarter of 2022, the company expects to achieve its first quarter of positive adjustedEBITDA.
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