Serve Robotics Inc.

Thank you for standing by and welcome to CERV Robotics' first quarter 2025 earnings conference call. Please be advised that today's conference call is being recorded. I would now like to hand the conference to your host, Head of Communication and Investor Relations, Aduk Thawel. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to CERV Robotics' first quarter 2025 earnings call. With me today are CERV's CEO and co-founder, Ali Kashani, and our CFO, Brian Reed. During today's call, we may present both GAAP and non-GAAP financial measures. If needed, a reconciliation of GAAP to non-GAAP measures can be found in our earnings release filed earlier today. Certain statements in this call are forward-looking statements. You should not place any reliance on forward-looking statements. Actual risks may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks and uncertainty described in our most recent annual reports on Form 10-K and in our filings made with the SEC. We published our quarterly financial press release and our updated corporate presentation to our investor relations website earlier this afternoon, and we ask you to review those documents if you haven't already. With that, let me hand it over to Ali.

Thanks, Hadoukei, and thank you all for being here. We made great progress in Q1, and I'm excited to share what we've been up to. First of all, we made our key targets for the first quarter, which was to build 250 new third-generation robots. As a result, we are on track to reach our end-of-year target, which is to deploy 2,000 robots. Our team has been heads down, really relentlessly executing, and despite all the external uncertainties in the market, I feel confident that will be able to hit our target by the end of the year. Let me highlight some of our accomplishments since our last update. First and foremost was the addition of the 250 new robots, which were added to the fleet in LA, Miami, and Dallas. We've spent the last few weeks now bringing the new delivery capacity online, which involves working with city officials and our delivery partners and local merchants and restaurants. We've been launching new geographies and markets and bringing new restaurants online. As a result of all this, in Q1, we increased our daily supply hours by over 40% compared to Q4. The increase in capacity has also led to a sharp increase in our delivery volume. During the first quarter, as we got more robots deployed, Our delivery volume increased over 75% between the first and the last week of the quarter. We expect this growth to continue in Q2, even before we add more robots to the fleet. We'll have more geos to cover and more merchants to bring online, which all results in more utilization of the robots. We are also anticipating approximately 60% to 75% quarter-over-quarter delivery volume growth in Q2 compared to Q1. Speaking of geos, since the start of the year, we've launched two new markets, Miami in February and Dallas in April. We've been ahead of our timeline by a few weeks and have been able to also enlist key partners like Shake Shack and Mr. O1 at each new market launch. We have also increased our presence in LA significantly by bringing our robots to Glendale and Long Beach in January. In total, we now serve over 320,000 households around the country, which has more than doubled since December of 2024. The flip side of this is our merchant volume, which is also growing quickly. As of today, we serve over 1,500 restaurants. That is a 50% increase since our last update call, and it's five times more restaurants than a year ago. Now, expanding the fleet size and adding markets and increasing delivery volume, these are just half of the equation. The other half is the quality of deliveries. What's great is that we've been able to rapidly expand our volume and coverage and even launch new robots while at the same time successfully maintain our high delivery quality. For example, the percentage of deliveries that failed to meet our internal delivery deadline was reduced by roughly 65% in Q1 compared to a year ago. We have also kept our delivery completion rate similar to what it was in Q4 before we launched any of the new robots and markets. Also, our average delivery drop-off time has remained consistent throughout this period. All of this rapid growth and sustained quality is why I said earlier that I feel confident in our ability to continue to scale to our 2,000 robot target by the end of the year. Let's also quickly touch on hardware costs. Despite the broader supply chain challenges, another key highlight has been the fact that we've managed our robot bomb cost in such a way that the current tariffs have had so little impact on us. In fact, if you recall, our Gen 3 robots cost nearly one-third of Gen 2 robots, and the current 10% tariffs have actually been offset by the additional savings on the bomb cost. Last but not least, I also want to highlight our solid capitalization position. We raised an additional $91 million in Q1 and had $198 million on the balance sheets by the end of the quarter. In the current market conditions, this has provided us with more flexibility. It's given us more leverage in negotiations and an opportunity to out-execute competition in growth and in technology investment. So to summarize, I hope that I've been able to do justice to highlight our team's relentless efforts and the great results. Having built the first major batch of our 2,000 robots, deployed them, increased delivery volume by over 75%, and expanded to new markets while maintaining our high quality of deliveries, all I can say is that I'm really proud of our team. for living up to the challenge every single day. Now, let me hand this to Brian to provide a more detailed overview of our Q1 financial results, and I'll be back later to provide an update on our plans for the rest of the year.