This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk04: Good morning and welcome to the Autonomo fourth quarter and full year 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Juliette McGinnis, Senior Director of Communications at Autonomo. Please go ahead.
spk07: Thank you, Operator, and thank you all for joining us today. Welcome to Autonomo's fourth quarter and full year 2022 earnings call. Before we begin, I would like to remind you that our discussions today will include forward-looking statements that are subject to risk and uncertainties relating to future events and the future financial performance of Autonomo. Actual results could differ materially from those anticipated in forward-looking statements. Forward-looking statements made today speak only to our expectations as of today and we undertake no obligation to publicly update or revise them. For discussion of some of the important risk factors that could cause actual results to differ materially, From any forward-looking statements, please see the risk factors section of Autonomo's form 20F, filed with the SEC on March 31st, 2022, and other documents filed by Autonomo from time to time with the SEC. If you have not received a copy of the earnings press release, please download one from the investor relations section of the company's website. Today's call will be accompanied by a PowerPoint. you are welcome to view the presentation on Autonomo's Investor Relations website. Please follow the call. A replay of this webcast will be available on Autonomo's Investor Relations website. Please also note that we will present non-GAAP operating laws on today's call, which is a historical non-GAAP financial measure. Because of this financial measure is used in Autonomo's internal analysis of financial and operating performance. Autonomo believes that it provides increased transparency to investors of management's view of economic performance. Autonomo also believes the presentation of this measure allows investors to more effectively evaluate and compare the performance of Autonomo to that of its peers, although Autonomo's presentation of this non-GAAP measure may not be comparable to other similarly titled measures. measures of other companies. A reconciliation of this measure to its most directly comparable GAAP financial measure is included in our earnings release. Today, we are joined by Ben Falcao, CEO and co-founder of Autonomo, Bonnie Moev, CFO of Autonomo, and Ben will start us off with an update on the current state of the market, Q4 results, and a summary of 2022. Next, Bonnie Moev will give us an overview of the company's financial results for Q4 and the full year 2022. We will then open the call up for a live Q&A session. During the Q&A section of this call, Ben will be joined by Bonnie. With that, I'd like to pass the call over to Ben Volkow. Ben, please go ahead.
spk02: Thank you, Juliette. Hi, everyone, and thank you for joining Autonomous Fourth Quarter and Full Year 2022 Financial Results Conference Call. Before I get into our Q4 results, let me first address the need of our agreement to enter into a merger transaction with Urgently that was announced last week. We couldn't be more excited about the merger. It is highly complementary and synergetic and will enable us to create exceptional customer-centric assistance experiences and accelerate growth by advancing delivery of preventive and predictive mobility services and products, digital platform integration for faster assistance response with multi-channel delivery, value creation across the mobility ecosystem of OEM, transportation, insurance carriers, fleet companies, and mobility assistance service providers. The combined company will be extremely well capitalized, with revenues north of $185 million in 2022, with solutions operating in more than 26 countries with more than 100 partnerships agreements across the automotive, OEM, transportation, insurance, fleet, and rental sectors, covering more than 70 million vehicles, and more than 80,000 connected assistance service professionals. And of course, 36 registered and pending patents. With over 1.7 billion connected vehicles expected to be on the road by the next decade, the combined company will serve markets totaling more than $100 billion. This all-stock transaction is expected to close in the third quarter of 2022. Upon closing, Matt Booth, currently CEO of Urgently, will be the CEO of the combined company. I will continue on the journey and will be joining the board of directors of the combined company. I'll be happy to address your questions regarding the merger at the end of our prepared remarks today. Now let's shift our focus to Q4 and year-end 2022 results for Autonomo. Q4 was yet another record-breaking quarter for Autonomo, with positive revenue growth and continued strong bookings. All of our key metrics were positive quarter-on-quarter, and we signed substantial new contracts that will position the company well for continued growth in the coming quarters. Q4 also marked a significant shift in our operating strategy, as we took the difficult but necessary steps to reduce costs to be more in line with our revenue outlook and the overall market adoption. We estimate the year-over-year impact of these cost reductions will result in substantial cost savings for the company. We think that this sets Autonomo up well in preserving the necessary capital to build a sustainable and scalable business. For the full year 2022, our revenue growth, product development, and customer success has been nothing short of remarkable. We grew revenues from $1.7 million to $7 million, and we exited the year with an 82% recurring revenue run rate. While we did not meet our expectations on the top line for the year, and we would have preferred to have less disruption in the business, we remain optimistic about the future of the market and our strategy. From a market perspective, the back half of 2022 was all about extended decision cycles with our ecosystem. As a result, the strong demand we see for autonomous data services did not translate into revenues as quickly as we expected. We anticipate that these macro-factors will persist well into 2023, and thus are positioning the company accordingly from a financial perspective. The next two to three years will be pivotal in the mobility sector, as we believe the industry will reach a tipping point in the adoption of software-defined telematics because of the increasing number of connected vehicles on the road, as well as the rate of electric vehicle adoption, because the maturation of key applications and use cases, and because of the adoption of new transformative economic models for our segment of the industry. Q4 continued our momentum across key metrics. Some of the Q4 highlights are revenue for the fourth quarter of 2022 grew by 6% quarter over quarter. Recurring revenue reflects 82% of autonomous revenue for the fourth quarter 2022. Bookings for the fourth quarter grew by 65% quarter over quarter, to $3.6 million, of which 79% is recurring revenues. Backlog as of December 1, 2022, was $6.3 million. Annual recurring revenues, ARR, was $7 million, an increase of 5% quarter over quarter. For 2022, here are some of our highlights. Revenue for 2022 was $7 million, compared to $1.7 million in 2021. For the full year 2022, recurring revenues was $4.8 million. Booking for 2022 were 9.3 million. We increased also our current OEM contracts from 22 to 24. We added 55 new customers for connected vehicle data and insurance in 2022. We completed the flow acquisition to address motor insurance, one of the largest segments in the mobility sector. We launched fleet mileage and maintenance management consoles as well as FlowFusion that combines phone and car data to create a 1 plus 1 equals 3 offering to insurance carriers. And we increased the number of fleet vehicles on the platform by more than 5.5x. I want to touch some of the strategic partnerships announced in the quarter. First, Microsoft. Microsoft has selected Autonomo to support and improve its global mapping products and services. The streaming connected vehicle data provided by Autonomo will allow Microsoft to develop enhancements to its mapping services for Microsoft Map users. across Microsoft Azure, Windows, and Bing, including providing current traffic conditions, accident notification, and route optimization. Microsoft will use connected vehicle data, including traffic data, road safety events, and road sign data, to enrich and validate its current road network data. With this additional data set, Microsoft can derive additional insights to support its mapping products and services, such as new road geometry or turn restrictions, for example. Microsoft mapping products and services include its own branded solutions and licensed third-party offerings. We also signed a multi-year partnership with global automobile manufacturer Renault Group to provide its fleet customers easier and cost-effective access to reach actionable vehicle data insights across multiple vehicle brands. Unlike other solutions that require aftermarket hardware, such as OBD dongle to be installed to gain access to the data, Autonomo is able to access the vehicle data directly from Renault Group through Renault Cloud Platform. Easy connect for fleet. So moving from hardware to software-based telematics. This will reduce installation and maintenance costs for fleet customers. as well as time spent managing these aftermarket devices. We also signed a multi-year agreement with ITERIS, the World Trusted Technology Ecosystem for Smart Mobility Infrastructure Management, to integrate connected vehicle data available through the Autonomous Smart Mobility Data Platform into ITERIS Clear Mobility Platform. The additional data source will help Iteris unlock new mobility insights from its multiple sources of traffic intelligence, advance its digital mobility infrastructure solutions for the public sector and commercial enterprise customers, and deliver on its mission of creating a future of smarter and connected transportation. And finally, Michelin DDI, the business unit within Michelin Group, specialized in driving behavioral data analysis, has selected Autonomo to advance the development of its near-miss zoning identification service in Europe. Michelin DDI will leverage acceleration and deacceleration connected vehicle data events available through the Autonomous Smart Mobility Data Platform to identify potential accidents, hotspots, and help European road authorities reduce risk and improve road safety for drivers, beginning in France and followed by additional countries across Europe. Now, for more detail on our Q4 and full year 2022 financials, I'll hand it over to Autonomous CFO Bonnie Mohan.
spk10: Thank you, Ben. Revenues for the fourth quarter 2022 reached $2.1 million compared to $1.1 million for the fourth quarter of 2021. Growth was primarily driven by growth in our core connected vehicle data and the contribution of the flow revenues. Before I move further into the numbers, I want to remind you that our non-GAAP item consists of stock-based compensation expenses, restructuring expenses, depreciation, amortization of acquired intangible assets, contingent liability income related to the flow acquisition, and interments of intangible and goodwill. Non-GAAP information is presented excluding these items. Our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results, can be found in our earning release. I will now turn to the detailed financial results for the quarter. Our GAAP operating loss for Q4 2022 was $17.2 million, including a restructuring cost of $2.2 million and transaction costs of $1.9 million compared to $16.2 million in the fourth quarter of 2021. In the fourth quarter, non-GAAP operating loss was $13.8 million, including transaction costs of $1.9 million compared to $14 million for the fourth quarter of 2021. Our cloud infrastructure expenses consist primarily of costs related to third-party cloud services, which decreased by 12% from $1.1 million in Q4 2021 to $0.9 million in Q4 2022. The decrease is attributed to the efficiency measures the company adopted to reduce costs. Cost of services includes purchasing of data of 0.7 million, an increase of 148% year-over-year, which reflects the cost we pay to the OEMs and other data providers for their data used in our products. In addition, 0.4 million is related to the cost of services provided to our customers. Our research and development expenses and our sales and marketing expenses for the fourth quarter of 2022 were $6.2 million and $5.9 million, which increased by 29% and 36%, respectively, year over year, mainly due to the workforce growth in connection with the flow acquisition. The increase in workforce does not reflect yet the recent restructuring process, which will take effect in 2023. General and administrative expenses for the fourth quarter of 2022 were $6.4 million compared to $6.3 million in the same period a year ago. The current quarter expenses include $1.9 million in transaction costs. If excluded, it reflects a reduction of 29% quarter over quarter mainly due to reduction in D&O insurance costs and management bonus. During the fourth quarter, the company started a process of cost reduction, including head reduction of approximately 100 employees worldwide. This process will be completed by the end of the first quarter of 2023 and is expected to result in substantial cost savings. Turning to the balance sheet, we ended up the quarter with $140.6 million in cash, cash equivalents, short-term investment, restricted cash, and long-term investment, a decrease of $67.5 million from year-end 2021. This was mainly driven by $12 million in cash used for the flow acquisition and $55.5 million in cash used for operating activities. And now I will turn it back over to Ben.
spk02: As highlighted in today's call, Q4 and the full year 2022 are great progress and challenges to overcome for autonomous. Existing the year, we believe that we are well positioned from a capital standpoint to adjust to the rate of market adoption we are experiencing, growing our ecosystem of partners and creating strategic, highly scalable partnerships, and laser-focused on segments we believe will scale. Our momentum is carrying into 2023 as we started the year with a bang. First, the class action lawsuit filed last April against Autonomo has been dismissed. You may remember the strange lawsuit claimed that Autonomo affixed hardware tracking devices to BMW vehicles in the U.S. Well, we believe that the dismissal of this lawsuit highlights both the betterness of the plaintiff's complaint as much as it reinforces the importance that Autonomo places on data privacy. We are pleased with the outcome of this important step in our effort to resolve this matter and defend autonomous reputation and position in the industry. Second, our recently announced agreement to merge with Urgently is going to create a mobility service powerhouse that can vastly improve customer experiences and safety for our automotive OEM transportation, insurance, rental, and fleet partners, and their customers. The teams are now engaging to support anticipated close and integration in the third quarter of 2023. Operator, we are now ready to take questions.
spk04: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Josh Nichols with B. Reilly. Please go ahead.
spk05: Yeah, thanks for taking my question. Just kind of curious, I mean, obviously there's a lot going on with the company, but just to hit on some of the expense management items that you talked about towards the end of the call. So the company had an operating loss of around $14 million in the fourth quarter. How is that expected to change going forward? And once all these cost-saving initiatives are completed, is there a target cash burn there? quarterly run rate that the company is looking at achieving?
spk10: Yeah, thank you for the question, Josh. Yes, we continue to monitor the cost very carefully. As mentioned in the call, we are finalizing the process of terminating approximately 100 employees, and we are doing some other cost reduction. As mentioned in the call, We already managed to reduce our cloud services cost and looking to reduce it in other places. It's going to be a substantive cutting, so we believe it's going to take us to between 35% to 40% cut in our burn rate going forward. forward from probably the beginning of Q2.
spk05: Thanks for clarifying. And then just last question for me. Can we talk a little bit about the pro forma cap structure of the new entity? I know it's subject to a couple of things that could change, but overall based on the current exchange rate, like what's the shares outstanding today and what's that going to look like on a pro forma basis? cash and debt, high-level balance sheet items that we should expect to see.
spk10: So unfortunately, there's not a lot we can share at this point, and also there are lots of moving pieces between signing and closing. It could take several months, and there is a lot of things that are going to change between signing and closing, so we are not disclosing at this time how the cap table will look. We think that we... We cannot describe it as it could significantly vary from this point to the closing point.
spk05: Right. But I guess I think you did disclose in the 6K, right, that there was going to be, I guess at least at the date that it was filed, the conversion rate was one share for every 1.41. shares of Otomano stock, right, that were going to be outstanding, at least that's how I interpret what was disclosed in the 6K that was published?
spk10: We did disclose that the legacy autonomous holders will get around 33% of the combined entity. It can change, you know, a few percentage up or down depends on the other conditions.
spk12: Okay, thank you.
spk09: You're welcome.
spk04: This concludes our question and answer session. I would like to turn the conference back over to Juliette McGinnis for any closing remarks.
spk01: Thank you, everyone, for joining us. We look forward to seeing you on our next call.
spk04: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you. Thank you. Bye. Good morning and welcome to the Autonomo fourth quarter and full year 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Juliette McGinnis, Senior Director of Communications at Autonomo. Please go ahead.
spk07: Thank you, Operator, and thank you all for joining us today. Welcome to Autonomo's fourth quarter and full year 2022 earnings call. Before we begin, I would like to remind you that our discussions today will include forward-looking statements that are subject to risk and uncertainties relating to future events and the future financial performance of Autonomo. Actual results could differ materially from those anticipated in forward-looking statements. Forward-looking statements made today speak only to our expectations as of today, and we undertake no obligation to publicly update or revise them. For discussion of some of the important risk factors that could cause actual results to differ materially, from any forward-looking statements, please see the risk factors section of Autonomo's form 20F, filed with the SEC on March 31st, 2022, and other documents filed by Autonomo from time to time with the SEC. If you have not received a copy of the earnings press release, please download one from the investor relations section of the company's website. Today's call will be accompanied by a PowerPoint. You are welcome to view the presentation on Autonomo's Investor Relations website. Please follow the call. A replay of this webcast will be available on Autonomo's Investor Relations website. Please also note that we will present non-GAAP operating loss on today's call, which is a historical non-GAAP financial measure. Because of this financial measure is used in Autonomo's internal analysis of financial and operating performance. Autonomo believes that it provides increased transparency to investors of management's view of economic performance. Autonomo also believes the presentation of this measure allows investors to more effectively evaluate and compare the performance of Autonomo to that of its peers, although Autonomo's presentation of this non-GAAP measure may not be comparable to other similarly titled measures. measures of other companies. A reconciliation of this measure to its most directly comparable GAAP financial measure is included in our earnings release. Today, we are joined by Ben Falcao, CEO and co-founder of Autonomo, Bonnie Moev, CFO of Autonomo, and Ben will start us off with an update on the current state of the market, Q4 results, and a summary of 2022. Next, Bonnie Moev will give us an overview of the company's financial results for Q4 and the full year 2022. We will then open the call up for a live Q&A session. During the Q&A section of this call, Ben will be joined by Bonnie. With that, I'd like to pass the call over to Ben Volkow. Ben, please go ahead.
spk02: Thank you, Juliette. Hi, everyone, and thank you for joining Autonomous fourth quarter and full year 2022 financial results conference call. Before I get into our Q4 results, let me first address the need of our agreement to enter into a merger transaction with Urgently that was announced last week. We couldn't be more excited about the merger. It is highly complementary and synergetic and will enable us to create exceptional customer-centric assistance experiences and accelerate growth by advancing delivery of preventive and predictive mobility services and products, digital platform integration for faster assistance response with multi-channel delivery, value creation across the mobility ecosystem of OEM, transportation, insurance carriers, fleet companies, and mobility assistance service providers. The combined company will be extremely well-capitalized, with revenues north of $185 million in 2022, with solutions operating in more than 26 countries with more than 100 partnerships agreements across the automotive, OEM, transportation, insurance, fleet, and rental sectors, covering more than 70 million vehicles, and more than 80,000 connected assistance service professionals. And of course, 36 registered and pending patents. With over 1.7 billion connected vehicles expected to be on the road by the next decade, the combined company will serve markets totaling more than $100 billion. This all-stock transaction is expected to close in the third quarter of 2022. Upon closing, Matt Booth, currently CEO of Urgently, will be the CEO of the combined company. I will continue on the journey and will be joining the board of directors of the combined company. I'll be happy to address your questions regarding the merger at the end of our prepared remarks today. Now let's shift our focus to Q4 and year-end 2022 results for autonomous. Q4 was yet another record-breaking quarter for Autonomo, with positive revenue growth and continued strong bookings. All of our key metrics were positive quarter-on-quarter, and we signed substantial new contracts that will position the company well for continued growth in the coming quarters. Q4 also marked a significant shift in our operating strategy. as we took the difficult but necessary steps to reduce costs to be more in line with our revenue outlook and the overall market adoption. We estimate the year-over-year impact of these cost reductions will result in substantial cost savings for the company. We think that this sets Autonomo up well in preserving the necessary capital to build a sustainable and scalable business. For the full year 2022, our revenue growth, product development, and customer success has been nothing short of remarkable. We grew revenues from $1.7 million to $7 million, and we exited the year with an 82% recurring revenue run rate. While we did not meet our expectations on the top line for the year, and we would have preferred to have less disruption in the business, we remain optimistic about the future of the market and our strategy. From a market perspective, the back half of 2022 was all about extended decision cycles with our ecosystem. As a result, the strong demand we see for autonomous data services did not translate into revenues as quickly as we expected. We anticipate that these macrofactors will persist well into 2023, and thus are positioning the company accordingly from a financial perspective. The next two to three years will be pivotal in the mobility sector, as we believe the industry will reach a tipping point in the adoption of software-defined telematics because of the increasing number of connected vehicles on the road, as well as the rate of electric vehicle adoption, because the maturation of key applications and use cases, and because of the adoption of new transformative economic models for our segment of the industry. Q4 continued our momentum across key metrics. Some of the Q4 highlights are revenue for the fourth quarter of 2022 grew by 6% quarter over quarter. Recurring revenue reflects 82% of autonomous revenue for the fourth quarter 2022. Bookings for the fourth quarter grew by 65% quarter-over-quarter, to $3.6 million, of which 79% is recurring revenues. Backlog as of December 1, 2022, was $6.3 million. Annual recurring revenues, ARR, was $7 million, an increase of 5% quarter-over-quarter. For 2022, here are some of our highlights. Revenue for 2022 was $7 million, compared to $1.7 million in 2021. For the full year 2022, recurring revenues was $4.8 million. Booking for 2022 were 9.3 million. We increased also our current OEM contracts from 22 to 24. We added 55 new customers for connected vehicle data and insurance in 2022. We completed the flow acquisition to address motor insurance, one of the largest segments in the mobility sector. We launched fleet mileage and maintenance management consoles, as well as FlowFusion that combines phone and car data to create a 1 plus 1 equals 3 offering to insurance carriers. And we increased the number of fleet vehicles on the platform by more than 5.5x. I want to touch some of the strategic partnerships announced in the quarter. First, Microsoft. Microsoft has selected Autonomo to support and improve its global mapping products and services. The streaming connected vehicle data provided by Autonomo will allow Microsoft to develop enhancements to its mapping services for Microsoft Map users. across Microsoft Azure, Windows, and Bing, including providing current traffic conditions, accident notification, and route optimization. Microsoft will use connected vehicle data, including traffic data, road safety events, and road sign data, to enrich and validate its current road network data. With this additional data set, Microsoft can derive additional insights to support its mapping products and services, such as new road geometry or turn restrictions, for example. Microsoft mapping products and services include its own branded solutions and licensed third-party offerings. We also signed a multi-year partnership with global automobile manufacturer Renault Group to provide its fleet customers easier and cost-effective access to reach actionable vehicle data insights across multiple vehicle brands. Unlike other solutions that require aftermarket hardware, such as OBD dongle to be installed to gain access to the data, Autonomo is able to access the vehicle data directly from Renault Group to Renault Cloud Platform. Easy connect for fleet. So moving from hardware to software-based telematics. This will reduce installation and maintenance costs for fleet customers. as well as time spent managing these aftermarket devices. We also signed a multi-year agreement with ITERIS, the world's trusted technology ecosystem for smart mobility infrastructure management, to integrate connected vehicle data available through the Autonomous Smart Mobility Data Platform into ITERIS Clear Mobility Platform. The additional data source will help Iteris unlock new mobility insights from its multiple sources of traffic intelligence, advance its digital mobility infrastructure solutions for the public sector and commercial enterprise customers, and deliver on its mission of creating a future of smarter and connected transportation. And finally, Michelin DDI, the business unit within Michelin Group, specialized in driving behavioral data analysis, has selected Autonomo to advance the development of its near-miss zoning identification service in Europe. Michelin DDI will leverage acceleration and deacceleration connected vehicle data events available through the Autonomous Smart Mobility Data Platform to identify potential accident hotspots and help European road authorities reduce risk and improve road safety for drivers, beginning in France and followed by additional countries across Europe. Now, for more detail on our Q4 and full year 2022 financials, I'll hand it over to Autonomous CFO Bonnie Mohan.
spk10: Thank you, Ben. Revenues for the fourth quarter 2022 reached $2.1 million compared to $1.1 million for the fourth quarter of 2021. Growth was primarily driven by growth in our core connected vehicle data and the contribution of the flow revenues. Before I move further into the numbers, I want to remind you that our non-GAAP item consists of stock-based compensation expenses, restructuring expenses, depreciation, amortization of acquired intangible assets, contingent liability income related to the flow acquisition, and impairment of intangible and goodwill. Non-GAAP information is presented excluding these items. Our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results, can be found in our earnings release. I will now turn to the detailed financial results for the quarter. Our GAAP operating loss for Q4 2022 was $17.2 million, including a restructuring cost of $2.2 million and transaction costs of $1.9 million compared to 16.2 million in the fourth quarter of 2021. In the fourth quarter, non-GAAP operating loss was 13.8 million, including transaction costs of 1.9 million, compared to 14 million for the fourth quarter of 2021. Our cloud infrastructure expenses consist primarily of costs related to third-party cloud services, which decreased by 12% from $1.1 million in Q4 2021 to $0.9 million in Q4 2022. The decrease is attributed to the efficiency measures the company adopted to reduce costs. Cost of services includes purchasing of data of 0.7 million, an increase of 148% year-over-year, which reflects the cost we pay to the OEMs and other data providers for their data used in our products. In addition, 0.4 million is related to the cost of services provided to our customers. Our research and development expenses and our sales and marketing expenses for the fourth quarter of 2022 were $6.2 million and $5.9 million, which increased by 29% and 36%, respectively, year over year, mainly due to the workforce growth in connection with the flow acquisition. The increase in workforce does not reflect yet the recent restructuring process, which will take effect in 2023. General and administrative expenses for the fourth quarter of 2022 were $6.4 million compared to $6.3 million in the same period a year ago. The current quarter expenses include $1.9 million in transaction costs. If excluded, it reflects a reduction of 29% quarter over quarter mainly due to reduction in D&O insurance costs and management bonus. During the fourth quarter, the company started a process of cost reduction, including head reduction of approximately 100 employees worldwide. This process will be completed by the end of the first quarter of 2023 and is expected to result in substantial cost savings. Turning to the balance sheet, we ended up the quarter with $140.6 million in cash, cash equivalents, short-term investment, restricted cash, and long-term investment, a decrease of $67.5 million from year-end 2021. This was mainly driven by $12 million in cash used for the flow acquisition and $55.5 million in cash used for operating activities. And now I will turn it back over to Ben.
spk02: As highlighted in today's call, Q4 and the full year 2022 held great progress and challenges to overcome for autonomous. Existing the year, we believe that we are well positioned from a capital standpoint to adjust to the rate of market adoption we are experiencing, growing our ecosystem of partners and creating strategic, highly scalable partnerships, and laser-focused on segments we believe will scale. Our momentum is carrying into 2023 as we started the year with a bang. First, the class action lawsuit filed last April against Autonomo has been dismissed. You may remember the strange lawsuit claimed that Autonomo affixed hardware tracking devices to BMW vehicles in the U.S. Well, we believe that the dismissal of this lawsuit highlights both the betterness of the plaintiff's complaint as much as it reinforces the importance that Autonomo places on data privacy. We are pleased with the outcome of this important step in our effort to resolve this matter and defend autonomous reputation and position in the industry. Second, our recently announced agreement to merge with Urgently is going to create a mobility service powerhouse that can vastly improve customer experiences and safety for our automotive OEMs transportation, insurance, rental and fleet partners and their customers. The teams are now engaging to support the anticipated close and integration in the third quarter of 2023. Operator, we are now ready to take questions.
spk04: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. Please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Josh Nichols with B. Riley. Please go ahead.
spk05: Yeah, thanks for taking my question. Just kind of curious, I mean, obviously there's a lot going on with the company, but just to hit on some of the expense management items that you talked about towards the end of the call. So the company had an operating loss of around $14 million in the fourth quarter. How is that expected to change going forward? And once all these cost-saving initiatives are completed, is there a target cash burn there? quarterly run rate that the company is looking at achieving?
spk10: Yeah, thank you for the question, Josh. Yes, we continue to monitor the cost very carefully. As mentioned in the call, we are finalizing the process of terminating approximately 100 employees, and we are doing some other cost reduction. As mentioned in the call, We already managed to reduce our cloud services cost and looking to reduce it in other places. It's going to be a substantive cutting, so we believe it's going to take us to between 35% to 40% cut in our burn rate going forward. forward from probably the beginning of Q2.
spk05: Thanks for clarifying. And then just last question for me. Can we talk a little bit about the pro forma cap structure of the new entity? I know it's subject to a couple of things that could change, but overall based on the current exchange rate, like what's the shares outstanding today and what's that going to look like on a pro forma basis? cash and debt, high-level balance sheet items that we should expect to see.
spk10: So unfortunately, there's not a lot we can share at this point, and also there are lots of moving pieces between signing and closing. It could take several months, and there is a lot of things that are going to change between signing and closing, so we are not disclosing at this time how the cap table will look. We think that we... We cannot describe it as it could significantly vary from this point to the closing point.
spk05: Right. But I guess I think you did disclose in the 6K, right, that there was going to be, I guess at least at the date that it was filed, the conversion rate was one share for every 1.41. shares of Otomono stock, right, that were going to be outstanding, at least that's how I interpret what was disclosed in the 6K that was published?
spk10: We did disclose that the legacy autonomous holders will get around 33% of the combined entity. It can change, you know, a few percentage up or down, depends on the other conditions.
spk12: Okay, thank you.
spk09: You're welcome.
spk04: This concludes our question and answer session. I would like to turn the conference back over to Juliette McGinnis for any closing remarks.
spk01: Thank you, everyone, for joining us. We look forward to seeing you on our next call.
spk04: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer