By the numbers
Q1 net loss: $17.2M
Compared to a net loss of $9.5M in Q1 ‘23
Q1 gross profit: $10.1M
Up 8.2% year over year
- Financial update: Rubicon, a waste broker and technology platform, said in a Monday earnings call that the recent sale of its fleet technology business will help stabilize the company’s financial standing in the near term. CEO Phil Rodoni said the deal “provides the resources for each unit to accelerate their growth” and is “transformational for Rubicon.”
- Software divestment: The company sold its fleet technology business to Rodina Capital (an investment firm affiliated with key Rubicon investors) on May 7 for $68.2 million, plus a future earnout consideration of $12.5 million and a $20 million issuance of convertible preferred stock. Rubicon reported paying off $57 million in debt with these proceeds.
- SaaS financials: Rubicon executives had long touted the growth potential of these software-as-a-service assets, which focused on clients such as local governments, but the company never reported specific revenue. According to a new securities filing, Q1 revenue from this business was $3 million with a net loss of $669,000.
- Liquidity and costs: Rubicon reported having an estimated $13.9 million in cash on hand at the end of the quarter, but President and CFO Kevin Schubert said that number is now around $33 million when accounting for proceeds from the sale. “We feel good about our liquidity position going forward and our ability to fund the business as we move towards profitability,” he said.
- Product development: Costs in this area declined slightly year over year, to $7.3 million in Q1. This included $700,000 for the divested assets. The company said it plans to focus more on reducing costs going forward and anticipates “product development costs to decrease as a percentage of total revenues in the next 12 months.”
- Profitability: The company’s gross profit margin was 6.1%, up from 5.2% in Q1 ‘23. Rubicon reported an adjusted gross profit of $17.1 million, up 5.9% year over year.
- EBITDA: Adjusted earnings before interest, taxes, depreciation and amortization were -$11 million, versus nearly -$14 million in Q1 ‘23. Schubert said the company aims to reach positive adjusted EBITDA this year.
- New client: Rubicon recently won a “significant” contract with an unspecified new customer to provide waste and recycling service to over 500 grocery stores in the U.S. and Canada. Rodoni said Rubicon sees future opportunities to attract these types of clients.
- Future results: Rubicon didn’t provide a detailed financial outlook but said the sale of its fleet business won’t have a notable effect. “[T]he smart city business was fast growing, but wasn't significant from a revenue or [adjusted gross profit] perspective compared to the rest of the business. So we expect to kind of be at a similar cadence as you saw before,” said Schubert.
