Rubicon Technologies, Inc.

Good afternoon and welcome to Rubicon Technology's fourth quarter and full year 2022 earnings call. My name is Emma and I'll be your operator for today's call. As a reminder, this conference call is being recorded. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. It is now my pleasure to introduce Chris Spooner, Senior Vice President of Finance. You may begin.

Thank you. Hello, everyone, and welcome to Rubicon's fourth quarter and full year 2022 earnings call. A few quick reminders before we start. Today's call is being webcast and can be accessed from the investor section of our website, which can be found at www.rubicon.com. Today, we will present Rubicon's financial results for the fourth quarter and full year of 2022. This will be followed by a Q&A session. During the call, management will be making forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, and our actual results may differ materially due to known and unknown risks and uncertainties, as discussed in greater detail in our earnings release and our SEC filings. We assume no obligation to update forward-looking statements except as required by law. Additionally, we will refer to non-GAAP financial measures during our call today, including adjusted gross profit and adjusted EBITDA. We provide these non-GAAP results for informational purposes, and they should not be considered in isolation from the most directly comparable GAAP measures. A discussion of why we believe these non-GAAP measures are useful to investors, certain limitations of using these measures, and reconciliations for the most directly comparable GAAP measure can be found in our earnings release and our filings with the SEC. Joining me on the call today are Phil Redoni, Rubicon's Chief Executive Officer, and Kevin Schubert, President and Chief Financial Officer. With that, I would now like to turn the call over to Phil.

Thank you, Chris, and thank you to everyone for joining us today. For those who are new to our story, I will begin by taking a few minutes to describe Rubicon and the work we do with our customers and partners. Rubicon was founded over a decade ago and has grown today to be a global leader in providing cloud-based waste and recycling solutions to businesses and governments. We manage waste and recycling services for a network of waste generators, such as companies and cities, fleets of waste haulers, and waste and recycling processors. Rubicon provides innovative solutions that deliver greater transparency, efficiency, and customer engagement within the waste management industry. Prior to Rubicon, businesses had to coordinate with multiple vendors, most of which focused on the use of landfills and had little to no reporting capabilities. This made it virtually impossible to have a unified corporate diversion program or unified commodities management processes. Furthermore, there was no way to track or report landfill diversion environmental, social, and governance metrics. Today, Rubicon Solutions address these problems through a suite of transformative artificial intelligence and computer vision technology products which deliver better service management, data, analytics, and reporting. Through their partnership with Rubicon, customers can easily procure services optimize their service schedule, and easily monitor and report their ESG performance. This approach has allowed Rubicon to achieve significant scale, today surpassing over 10 million unique service locations and 8,000 hauler and recycler partners, with the ability to manage over 160 types of waste streams. As our network continues to grow, our customers benefit from better pricing, broader offering and diversion capabilities, and improved service performance. For businesses that generate waste, we properly align incentives and provide an expanding array of solutions that enable businesses to divert more material from landfill and in some cases, turn what was a cost line into a revenue generating opportunity through commodity extractions. Our fleet customers can use the Rubicon platform to find new business opportunities, many of which are exclusive to our proprietary platform. Our technology also provides easy to use fleet management and route optimization services as well as a buying consortium where fleets can purchase products and services such as fuel, parts, tires, and insurance at discounts. These benefits can help fleet customers save time and money, and for our city and municipal fleet customers, have resulted in taxpayer savings. In fact, our solution for municipal fleets, Rubicon Smart City, is one of our fastest-growing products. Our proprietary technology helps cities run faster, smarter, and more effective waste recycling and heavy-duty municipal fleet operations. Our software not only helps drivers become more time efficient with their routes, it also captures and sends information back to city employees, which can improve response times for issues like block bins, missed pickups, recycling contamination, and illegal dumping. All of this can lead to increased citizen satisfaction, lower carbon operations, improved driver safety and morale, and substantial cost savings for municipal operators. With this understanding of Rubicon services and platform, I want to take a moment to walk you through how Rubicon makes money. Our platform primarily generates revenue from the network via three sources. First, our revenues are reflective of all the waste and recycling services that transact over our platform. We make a margin based on the difference between the price at which we sell our services to our waste generator customers and the price for which we're able to procure those services from within our hauler network. As we drive hauler density within markets and as we leverage our technology to optimize service levels for waste generators, Rubicon's marketplace margins improve. Secondly, Rubicon monetizes the commodities pulled from the waste and recycling streams for our customers, which otherwise may have ended up in the landfill. Through this process, we are able to earn higher margins derived from providing unique value to our customers by turning previous costs into revenue and by adding predictability and quality of supply to processor volumes. It is worth noting that we structure our agreements with waste generators and processors such that we do not assume exposure to commodity price risk at the adjusted gross profit level. Further, our contracts typically feature incentives for achieving certain environmental outcomes to align our interests with our customers, so that as we drive positive environmental outcomes, our margins improve. Finally, whether a customer is a waste generator or fleet, Rubicon charges constituents a monthly software subscription fee for access to our proprietary platform. We at Rubicon are very proud of our achievements to date, so I would now like to take a few minutes to review a few of our accomplishments and commercial milestones from the fourth quarter. The first of these was the extension of a multi-year agreement with Walmart, enabling Rubicon to continue to increase the retail corporation's waste diversion from landfills, as well as the consolidation of its waste and recycling services, and the enhancement of account management for Walmart's distribution centers and retail stores. Amidst this renewal, Rubicon was able to improve its adjusted gross profit margins, add new recycled material streams to its program, and subsequently expanded its wallet share by adding five new states. In addition, Rubicon secured a three-year extension with Sweetgreen, the mission-driven restaurant brand which seeks to serve healthy food at scale. Our partnership is enabling Rubicon to continue to expand the company's waste diversion efforts and provide enhanced account management as Sweetgreen's lead partner for waste, recycling, and composting services. We also continue to see increased momentum for within our higher margin SaaS product lines. Specifically, we are proud to announce that Rubicon Smart City experienced a record quarter with the addition of 11 new customers in Q4 and with new contracts that included the cities of Rochester, New York, Manchester, New Hampshire, Surprise, Arizona, and Rockville, Maryland. These cities chose Rubicon Smart City to help them save money and run more efficient solid waste collection operations. In addition, we are proud to report that 2023 is off to a strong start as well. In February, Rubicon was pleased to announce the formation of a multi-year channel sales partnership agreement with Bartek, a leading supplier of environmental and service management software in the United Kingdom. Under this non-exclusive retailer agreement, Bartek is able to license Rubicon's suite of innovative software-based products to cities and counties across the United Kingdom with a focus on Rubicon's market-leading route optimization and sequencing technology. Through partnerships with regional channel leaders such as Bartek, Rubicon is continuing to build on its existing footprint in new markets around the world, achieving further progress in the company's global expansion strategy. Before turning the call over to Kevin to provide a review of the fourth quarter and full year results, I would like to take a moment to acknowledge our recent management changes. The Rubicon board and I were pleased to announce in February that our president, Kevin Schubert, will also now serve as chief financial officer. Kevin took over for Jevin Anderson, who joined Rubicon in late 2021. Jevin was instrumental in leading Rubicon through the process of going public and in preparing the necessary financial framework and functions to support the company during the transition period. Jevin will be missed as he moves on to pursue other opportunities. Kevin has already assumed responsibility for the company's financial operations and management and is making great strides in helping Rubicon accelerate the achievement of the strategic goals we laid out during our last earnings call and in helping direct the course of our future targets. Rubicon has a strong leadership team and is well positioned for success in its next phase of public life. I will now turn the call over to Kevin to provide a review of the fourth quarter and full year results, as well as a financial update and 2023 outlook.