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spk00: Greetings, and welcome to the WeJoe first quarter business update call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to WeJoe's Senior Vice President, Investor Relations, Kevin Clark. Please go ahead.
spk04: Thank you, Kevin. Thank you, Kevin. Good morning, everyone, and thank you for joining WeJo's Business Update call to discuss our first quarter 2022 operational and financial results. With me on the call today are Richard Barlow, our founder and CEO, John Maxwell, our CFO. Remarks made today on this call about future expectations, events, strategies, objectives, trends, or projected financial results, and other similar items are forward-looking. Forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and as such should be taken in the context of the risks and uncertainties that are outlined in the SEC filings of WEJO, including our recently filed quarterly report on Form 10Q, as well as other documents filed with the SEC. Forward statements speak only as of the date made, and the company undertakes no obligation to update such statements in the future. In addition, during this call, we will be discussing certain financial metrics that do not conform to generally accepted accounting principles in the U.S., better known as GAAP. For a reconciliation of these financial metrics to GAAP, please refer to our quarterly report on Form 10Q filed with the SEC. And now, I'll turn the call over to Richard.
spk01: Thank you for joining Wejo's first quarter 2022 business update. So much progress has been made this year for Wejo as our smart mobility solutions gain traction across a wide range of sectors. And some of the biggest corporations in the world are starting to utilize autonomous, electric, and connected vehicle data to unlock incredible untapped value and revenue. Every day across the US, we are having conversations with public sector, governmental organizations about how Wejo can help deliver on the goals of the Infrastructure Investment and Jobs Act. As a result of these conversations and deals that have recently come to fruition, Ouija is on track to deliver our results consistent with our guidance, full year 2022. And we are excited about the progress that we have made so far. During the period, we expanded our relationship with Microsoft, and they are now using us to deliver the datasets that power their mapping solutions. We also continue to be a primary data source to Amazon Flex, delivering solutions that enhance our global logistics and help enable deliver millions of packages every day. I'm also pleased to announce we now have Renault live on platform, which supports our guidance of having more than 27 million vehicles live on platform, giving us data as well as supporting our substantial moves into Europe. Another significant update is with Honda. This is our first global OEM framework agreement where we'll have coverage including the Asia-Pacific regions. Which brings us to the paramount question, why do large companies like Microsoft and Amazon rely on Ouija's size for their traffic and mapping solutions? The reason they rely on Wejo is because creating real-time data solutions from connected vehicles is hard work and not easily replicated. Wejo's killer app is processing real-time data at scale, at speed. This is why some of the world's largest companies work with Wejo. It's our moat. No one else processes so much data as Wejo. Let me give you four examples of the type of companies we are attracting. First, there's a major US automotive company who are trusting us to design and manage their privacy operations around their connected vehicle data. Privacy platforms are going to be paramount as more OEMs engage in using vehicle data to deliver more valuable services to their customers. As part of our suite of products, we can customize privacy solutions to meet the specific needs of our OEM partners, and we expect to execute similar deals. Second, an insurance giant in the US are in discussions with Wejo to help develop its end-to-end insurance products and breakdown services. Our software and cloud solutions powered by autonomous, electric and connected vehicle data will reduce insurance fraud and premiums, improve repair times, ultimately help them improve their business offering to millions of Americans. The third relationship is with Japanese insurance provider SOMPO, who have progressed significantly over the last few months, resulting in the signing of a second services agreement. The fourth relationship is with Palantir. I'm pleased to announce that in addition to our recently announced electric vehicle infrastructure operating system, EVOS, that we've built in collaboration with Palantir, our relationship is now running deeper as we're also using Palantir's platform to build an autonomous vehicle operating system, AVOS, to help accelerate the advancement of autonomous vehicle future. And these deals are just the tip of the iceberg, as we closed other major deals in the period, including Telenaf, Recall, and Inrix, which substantially accelerated our gross bookings when compared to last year. And while we generated new business from larger accounts mentioned, we also added a number of smaller accounts, resulting in 25 new customer agreements in the first quarter. This underscores the significant customer activity that we're just experiencing. To speak more about the strength of our growth spookings and other key performance indicators, here is our CFO, John Maxwell.
spk03: Thank you, Richard. We are off to an excellent start in 2022. Net revenue for the quarter was $600,000, representing an 86% increase over the same period in the prior year. Most of this revenue performance reflects strong year-over-year growth in our traffic product. Traffic is where we started and forms our revenue base, and we believe that traffic management alone will be a several hundred million dollar revenue stream in a few years. But we are not just relying on traffic. We expect to launch additional Wejo Marketplace data product lines and are expecting strong software and cloud solutions growth, all of which will help accelerate our growth in 2022 and beyond. We are seeing acceleration in our most prominent KPI metrics to support our 2022 full-year guidance. The real exciting news is this. We will complete a number of major customer deals over the next several months. As we continue to build Wejo commercially across multiple markets and products, I want to highlight evidence of significant traction we are experiencing in the business that isn't yet reflected in our GAAP revenue. Our inbound customer activity is very strong. Large enterprises, small businesses, governments and colleges and universities all recognize the value that our unique platform can bring. Our total number of customers is up 122% over the same period last year, continuing an accelerating trend that was highlighted in our fourth quarter and year-end business update. New customer activity will help drive our revenue base as we progress towards our long-term revenue goals. Beyond revenue and new customers, total contract value is another metric that shows how customers are signing up at an increasing rate. TCV, which is the total value of all contracts Wejo has signed to date, is up $13 million, or over 97% when compared to last year. Acceleration in TCV comes from strong traction we are seeing in traffic data marketplace, which we entered in 2020. As we add new marketplace product lines and sign additional business and software and cloud solutions, we expect to see more growth in this metric. Additionally, gross bookings are up substantially, a 312% increase from the same period last year. We have strong bookings at these levels reflecting continued demand, which will generate significant value for WeJo over a multi-year horizon. Most of this quarter's bookings are in the traffic marketplace, our most prominent product introduced to date. The common refrain is that we are in the early stages of our business, and reported net revenue is not the only determinant of the progress we are achieving. We believe that given our stage of maturity, these other KPIs like customer growth, TCV, and gross bookings are better indicators of that success. Vehicles on platform are higher by 35%, and gross bookings per monetizable vehicle live on platform is up 57% to $1.18 on a rolling four-quarter basis. Turning to specific financial performance, our adjusted EBITDA loss was $25 million. This was ahead of our expectations for the quarter as we managed expenses to be lower than planned based on phasing of hiring of new employees and other efficiencies in our spending. As we discussed when we provided our outlook for the evolution of our customer relationships, these will move from transactional data licenses to a more subscription-based model that generates recurring revenues. Moving our business in this direction generated ARR of $4.5 million, which was up 46% when compared to last year. Our expansion to new product lines and marketplace should enable additional growth in ARR, along with the business that we expect in software and cloud solutions. To support greater subscription-based revenue models, we are currently developing tools and solutions in the traffic product line that will drive increased ARR. We've been developing tools in the traffic marketplace. Many of them will be able to be leveraged for additional product lines, improving our overall efficiency and return on investment. We expect that our expansion into five new product lines will accelerate our customer activity even further and continue to accelerate the pace of our gross bookings. As Richard expressed, our success in the traffic product line is readily apparent. But it is important to emphasize that the other data marketplace product lines are within our reach now. While we think traffic revenue will create a large and highly valuable company itself, these additional marketplaces and our software and cloud solutions can significantly increase revenue over time. To give a little context, let's talk about our strategy in three of the product lines that we're working to launch in the near term. With a focus on end-to-end insurance instead of usage-based insurance, we are in discussions with several insurance providers which love our analytics and solutions in the end-to-end insurance product line that can make their businesses more efficient, minimizing fraud and claims leakage to help customers receive car repairs faster. There are quite a few companies focused on UBI, but we believe focus on supporting the insurer's management of claims process and efficiency is significantly more valuable, and we are uniquely positioned to deliver these types of analytics. Wejo is built on smart mobility for good products and services, and the products... developed in end-to-end insurance will stay true to that mantra and share benefits derived from these services to the consumers. In remote diagnostics, we plan to work with the service departments of dealerships to enhance the customer experience. This includes automatic ordering of parts worn or defective parts, the remote scheduling of vehicle maintenance and repairs, and using connected vehicle data to analyze driver behavior and determine the best hours of operation of the service department to be open for their customers. These services will boost profitability, enhance customer loyalty, and improve business operations. Finally, in audience and media measurement, we have signed a memo of understanding with a large media company to generate insights around driver behavior inside the vehicle. As a result of our rich data sets and insights, we believe this MOU will expand into a significant contract in the future as more products and solutions are developed and rolled out. These insights will allow media companies to understand the effectiveness of their advertising products and their subsequent impacts on driver behavior. For example, if a user listens to a retail commercial and then shortly thereafter goes to that retailer, the media company would have access to anonymized analytics that deliver robust insights and return profiles of the effectiveness of the various media. These are just a few of the use cases that will be applicable to these product lines. The most important takeaway is that we are already in discussions with private and public sector organizations, including some very large enterprises that will want to leverage these product lines today. By the end of 2022, we expect to have new customers in multiple end-user markets, and we expect to generate multi-year and multi-million dollar deals from these relationships. We believe that successful expansion into these additional product lines will result in accelerated gross bookings per vehicle. As of the end of the first quarter of 22, there are approximately 16.9 million vehicles on platform that can be monetized. Gross bookings per active vehicle was $1.18, representing a 57% increase versus the prior year. We believe that this metric will continue to grow as we gain traction in our new product lines, increase large enterprise customer relationships, and add various software solutions within our product lines. We have demonstrated that we can generate additional revenue just by bringing more vehicles on platform. The multiplier effect occurs when we drive our gross bookings per vehicle higher by expanding beyond the traffic to other product lines. Based on the ongoing engagement with major enterprise customers in these areas, we are well on our way. Currently, we have 24 Tier 1 OEM and fleet partnerships up from 22, which we can or expect in the future to generate data, and we expect to sign more OEM partnerships this year. Historically, we have primarily received data in the U.S., but this year we are adding to our OEM relationships internationally, including expansion in Japan. We believe our international growth will generate rich new data sets in regions where we can offer analytics and solutions to businesses and government organizations looking to improve their mobility presence. This will drive bookings across our business. Consistent with our previous guidance, we continue to expect net revenue of over $10 million, adjusted EBITDA loss between $110 and $120 million, and vehicles on platform in the range of $27 to $32 million. We, Joe, will make careful decisions about the timing of expenses and new capital raises based on the opportunities in front of us. At this time, the company does expect to access our committed equity facility and the proceeds from our Apollo forward purchase agreement, as noted earlier this year. Over to you, Richard. Thank you, Joe.
spk01: We are the industry leaders in autonomous, electric, and connected vehicle data, and our commitment to investment in people and technology for the last 10 years is paying off. We are the only company that has real-time processing of data from vehicles, and we are the only provider of real-time mapping solutions that can help understand and change your traffic behaviors in real time. Simply put, we know what is happening on 95% of US roads right now. We know how to have AVs operate on our roads with over 600 billion miles of data. We know how to supply real-time connected vehicle data to make maps smarter and highly accurate. We know that our cloud-based SaaS products and solutions, such as WeJ Studio, unlock incredible real-time insights that show the true human value of smart mobility movements. How do we know all this? Wejo's Real-Time Traffic Intelligence, or RTTI. Wejo RTTI is our new revolutionary traffic management product that we launched recently. Wejo RTTI provides a holistic view on traffic conditions and safety conditions on the road to predict faster and safer vehicle routing, reinforcing wide-propriety solutions that are utilized by leaders in industry. To demonstrate the capabilities of traffic intelligence, let's utilize our visualization tool and take a look at the surrounding area around me in Times Square. we are able to illustrate detailed traffic patterns traffic volume and density average speeds and travel times and even trigger alerts to warn of trouble areas ahead in real time and to reiterate we are the only company that can deliver these types of solutions to the marketplace underscoring while Ouija continues to see an acceleration of customer activity and gross booking trends to conclude Our commitment to innovation is really paying dividends for Wejo and our partners and customers. This is evidenced by the four examples of the type of enterprises we are attracting. First, there is a major U.S. automotive company who are trusting us to design and manage their privacy operations around their connected vehicle data. Second, an insurance giant in the U.S. are in discussions with Wejo to help develop its end-to-end insurance products and breakdown services. Third, the Japanese insurance provider Sonpo, a strategic partner of Wejo, has progressed significantly over the last few months. The fourth relationship is with Palantir, and we're using Palantir's platform to build an autonomous vehicle operating system, AVOS. leveraging over 600 billion miles of data. We also close incredible deals with Renault, Honda, Telenev, ReCore, and Inrix. We are the market leader. As John mentioned, we have made significant progress with our financials. Gross bookings up 312%, total contract value of 97%, annual recurring revenue of 46%, and vehicles on platform up 35%. I'd like to thank you for your time. John and I will now take your questions.
spk00: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. One moment, please, while we poll for questions. Our first question today is coming from Jeff Mueller from Baird. Your line is now live.
spk02: Yeah, thank you. So totally understand why revenue is not the best metric at this point, and you give us various other metrics, but the one I'm struggling with reconciling is ARR. It's been running flat a couple of quarters sequentially now. So just help us understand what's going on with ARR and why the growth in billings and bookings isn't accruing to an ARR build.
spk03: Sure. Hi, Jeff. Good morning. So at the end of last year, we actually had a customer that, because they lost a customer, had canceled their order. So it showed up in the ARR metric. The way we measure the ARR is the month of the quarter end. times 12 so we do it on a monthly basis and it just happens that at that point in time there was a customer that churned out that same customer is churning back in and so we will see them pick back up over time so we'll see that continue to build over time.
spk02: Okay and then on traffic so naming Microsoft which you've named in the past and Amazon Flex as customers obviously some great logos and I guess one question that we continue to get is just within traffic, why WeJo? How are they different, including relative to providers like Google Waze? So what type of incremental information do you have? What types of sensors data do you bring in beyond kind of just location or accelerometer and help us understand the development of the RTTI solution?
spk01: So we've got sensors such as seatbelt deployment, which is a great proxy for measuring traffic. And there's other sensors as well, including radio station changes that we also get now. But you shouldn't underestimate the fact that we real-time process all data. That's why we're working with more than Microsoft as a cloud provider. We mentioned Enrix in that call now, as well as Recore as other examples. There are other mapping providers we work with and traffic providers we work with that we don't mention. None of them do complete real-time processing of data. It's a huge heavy lift that only WeJo does. So the most, you know, and we receive data from 95% of roads every day. The fact we can identify real-time congestion on any road in any part of the US at any point in time is a huge value add for us. We've benchmarked our congestion analysis versus the key, the leading mapping providers out there, And we show consistently, even versus, as you mentioned, Waze, we show consistently that our congestion analysis is a much higher quality and a much more accurate result than anything out there because of our real-time processing. So it's not just the sensor availability, it's the heavy lifting of processing and to date, over 13 trillion data points and over 17 billion a day. But other senses include the fact that because we don't rely on mobile data, our accuracy means we lane index as well. So whereas you can't do that with a mobile data asset. So because we've said pure play is a connected vehicle, electric vehicle, an autonomous vehicle data asset, it provides a much higher outcome, high quality outcome.
spk02: Okay. And then on the insurance and markets, As you mentioned, there's other players that attack UBI in other ways. So I guess just first, how is your data superior just for UBI? And then help us understand what's all included in the broader end-to-end solution. It sounds like there's some claims and fraud prevention that's part of it as well.
spk01: Yeah, so we call it end-to-end insurance deliberately, and that's because we believe the biggest area we're going to – UBI is plain vanilla. It's become commoditized in industry. Arguably, there's very little difference between any of the providers out there in terms of how they score driving behavior. The big saving of industry is the estimated claim shrinkage. of between 8% and 12% of all claims costs, which is, in the US alone, a $10 billion saving. With our data, we can help insurers have earlier intervention, have quicker recovery. That reduces the tow costs. That reduces the storage costs. And then in terms of the data we're getting from vehicles, so, for example, there's certain motor manufacturers where we can identify real-time panel damage. We can identify real-time parts failures. And that means in terms of the supply chain of getting parts delivered to body shops for vehicles to be repaired, we actually significantly shorten the repair times of vehicle, which again reduces, say, the credit high costs to the insurance provider, as well as potentially reducing other parts costs that may well be inaccurately identified in a manual sort of process. That's why we're in final discussions with one of the largest U.S. insurance carriers who haven't done UBI or telematics insurance before, and why our relationship with SOMPO has matured so much in the last quarter alone, never mind since they became investors last year.
spk02: Okay. Thank you.
spk00: Thank you. We reach the end of our question and answer session. I'd like to turn the floor back over for any further opposing comments.
spk01: Thank you all for joining our call today. As you'll have seen, we've shown significantly more contracts being added to our base of total contract value. We've shown that we're deploying more and more products that leverage our dominant position of being the only pure real-time provider of traffic information. But also, we've added further OEMs to our client base where we now, as John mentioned, we now have 24 OEMs. tier ones and fleet partners, where we have an industry-leading position of over 16.9 million vehicles on platform, which we receive data from. We're in a market-leading position. We're scaling our business, and we're happy with the guidance we've given to date, and we look forward to meeting you in various other calls on our next earnings call.
spk00: Thank you. That does conclude today's business update. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
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