Serve Robotics Announces Second Quarter 2024 Results
- Manufacturing activities commenced on 2,000-robot fleet deployment following entry into manufacturing agreement with Magna and amendment to lidar supply agreement with Ouster
- Cash position bolstered by proceeds of $40 million equity offering, as well as post-quarter $15 million private placement transaction
SAN FRANCISCO, Aug. 13, 2024 /PRNewswire/ -- Serve Robotics Inc. (the "Company" or "Serve") (Nasdaq: SERV), a leading autonomous sidewalk delivery company, today announced financial results for the second quarter 2024 ended June 30, 2024.
"We are pleased to report another strong quarter, extending our 30-month track record of double-digit month-over-month growth and improvements in key operational metrics," said Dr. Ali Kashani, Serve's Co-founder and CEO. "This quarter, we expanded into Koreatown in Los Angeles, signed important agreements with Magna International Inc. ("Magna") and expanded on our supply agreement with Ouster Inc. ("Ouster"), and appointed our Chief Hardware & Manufacturing Officer to spearhead our fleet expansion efforts. I am particularly pleased to announce that Serve has completed the design of our third-generation robot. Looking ahead, we are focused on executing Serve's fleet expansion plan to deploy at least 250 additional robots in Los Angeles by the end of Q1 2025. We believe our continued execution of this plan through year end 2025 will position Serve to deploy all 2,000 robots under our Uber Eats agreement, which at full utilization is expected to generate $60 to $80 million in run-rate revenue annually."
Second Quarter 2024 and Recent Highlights
- Public Offering & Follow-on Transaction: On April 18, 2024, Serve completed a successful public equity offering, which generated $40.0 million in gross proceeds, and through which Serve's common stock began trading on The Nasdaq Capital Market under the ticker symbol "SERV". Post quarter-end, the company also completed a private placement transaction with gross proceeds of $15.0 million.
- Operational Performance: Serve averaged 385 daily supply hours during the second quarter 2024, a 106% increase year-over-year and a 28% increase quarter-over-quarter. The Company also achieved an 85% increase in daily active robots year-over-year and a 23% increase quarter-over-quarter.
- Los Angeles Expansion: In June 2024, Serve announced the expansion of its delivery operations into Koreatown and began onboarding new local merchants through its partnership with Uber Eats. The coverage expansion represents execution of Serve's long-term plan to broaden its geographic reach in Los Angeles and across the U.S.
- Manufacturing activities commenced following Magna and Ouster agreements: In the second quarter Serve commenced manufacturing activities on its 2,000-robot fleet, led by Euan Abraham, the Company's newly promoted Chief Hardware & Manufacturing Officer. Serve also entered into a purchase and production agreement with Magna, under which Magna will become the contract manufacturer of Serve's delivery robots, and signed an amendment expanding its supply agreement with Ouster to equip its next-generation robots with upgraded sensors for enhanced performance.
Second Quarter Financial Highlights
- Second quarter revenue was $0.47 million, including $0.30 million of software service revenue derived from the Company's software services agreement with Magna. As forecasted, Serve's services contract with Magna was significantly completed during the second quarter, and the Company does not anticipate material software services revenue in Q3 2024.
- As of June 30, 2024, the Company had $28.8 million of cash and cash equivalents.
- As of June 30, 2024, the Company had 36.5 million shares of common stock outstanding, and 42.6 million shares outstanding on a fully diluted basis. Following the Company's July 2024 private placement, the Company had approximately 48.2 million shares outstanding on a fully diluted basis.
Quarterly Conference Call
Company management will host a conference call and webcast today at 2:00 p.m. PT / 5:00 p.m. ET to discuss the financial results and provide a corporate update. A live webcast and replay can be accessed from the investor relations page of Serve's website at investors.serverobotics.com.
Individuals interested in listening to the conference call may do so by dialing (646) 968-2525 and referencing conference ID#: 1640108.
About Serve
Serve develops advanced, AI-powered, low-emissions sidewalk delivery robots that endeavor to make delivery sustainable and economical. Spun off from Uber in 2021 as an independent company, Serve has completed tens of thousands of deliveries for enterprise partners such as Uber Eats and 7-Eleven. Serve has scalable multi-year contracts, including a signed agreement to deploy up to 2,000 delivery robots on the Uber Eats platform across multiple U.S. markets.
For further information about Serve (Nasdaq: SERV), please visit www.serverobotics.com or follow us on social media via X (Twitter), Instagram, or LinkedIn @serverobotics.
Supplemental Financial Information
The key metrics and financial tables outlined below are metrics that provide management with additional understanding of the drivers of business performance and the Company's ability to deliver stockholder return. Investors should not place undue reliance on these metrics as indicators of future or expected results. The Company's presentation of these metrics may differ from similarly titled metrics presented by other companies and therefore comparability may be limited.
Table 1: Key Metrics
Three Months Ended | Six Months Ended | ||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
Key Metrics | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
Daily Active Robots (1) | 48 | 39 | 23 | 44 | 25 | ||||
Daily Supply Hours (2) | 385 | 300 | 152 | 342 | 169 | ||||
(1) | Daily Active Robots: The Company defines daily active robots as the average number of robots performing daily deliveries during the period. |
(2) | Daily Supply Hours: The Company defines daily supply hours as the average number of hours the Company's robots are ready to accept offers and perform daily deliveries during the period. |
Table 2: Revenue
Three Months Ended | Six Months Ended | ||||||||
June 30, 2024 | March 31, | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
Revenue | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
Software services | $ 296,035 | $ 851,101 | $ - | $ 1,147,136 | $ - | ||||
Delivery services | 75,540 | 51,760 | 32,467 | 127,300 | 57,719 | ||||
Branding fees | 96,800 | 43,850 | 29,542 | 140,650 | 44,542 | ||||
$ 468,375 | $ 946,711 | $ 62,009 | $ 1,415,086 | $ 102,261 | |||||
Forward Looking Statements
This press release contains "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward- looking statements may be identified by the context of the statement and generally arise when we or our management are discussing our beliefs, estimates or expectations. Such statements generally include the words "believes," "plans," "intends," "targets," "may," "could," "should," "will," "expects," "estimates," "suggests," "anticipates," "outlook," "continues," or similar expressions. These statements are not historical facts or guarantees of future performance, but represent management's belief at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside of our control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's partnership with Magna, timing of the Company's robot deployment, the Company's ability to expand to additional markets, and the Company's timing and ability to scale to commercial production.
The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission ("SEC"), including in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations'' in our Annual Report on Form 10-K for the year ended December 31, 2023, our Quarterly Report on Form 10-Q for the three months ended June 30, 2024 that will be filed following this earnings release, and in our subsequent SEC filings. We can give no assurance that the plans, intentions, expectations or strategies as reflected in or suggested by those forward-looking statements will be attained or achieved. The forward-looking statements in this release are based on information available 3 to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Contacts
Aduke Thelwell, Head of Communications & Investor Relations
Serve Robotics
aduke.thelwell@serverobotics.com
347-464-8510
Investor Relations
investor.relations@serverobotics.com
Serve Robotics Inc. | |||
June 30, | December 31, | ||
ASSETS | |||
Current assets: | |||
Cash | 28,780,034 | $ 6,756 | |
Accounts receivable | 93,132 | 2,955 | |
Inventory | 709,289 | 774,349 | |
Prepaid expenses | 1,119,995 | 676,969 | |
Escrow Receivable | 180,000 | - | |
Total current assets | 30,882,450 | 1,461,029 | |
Property and equipment, net | 819,244 | 48,422 | |
Right of use asset | 552,143 | 782,439 | |
Deposits | 512,659 | 512,659 | |
Total assets | 32,766,496 | $ 2,804,549 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||
Current liabilities: | |||
Accounts payable | 1,387,559 | $ 2,050,605 | |
Accrued liabilities | 46,079 | 255,849 | |
Deferred revenue | 52,863 | - | |
Note payable, current | 750,000 | 1,000,000 | |
Note payable - related party | — | 70,000 | |
Right of use liability, current portion | 413,800 | 496,963 | |
Lease liability, current portion | 1,617,224 | 2,363,807 | |
Total current liabilities | 4,267,525 | 6,237,224 | |
Note payable, net of current portion | — | 230,933 | |
Restricted stock award liability | — | 158,617 | |
Right of use liability | 35,230 | 211,181 | |
Total liabilities | 4,302,755 | 6,837,955 | |
Stockholders' equity (deficit): | |||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of both June 30, 2024 and December 31, 2023 | — | - | |
Common stock, $0.0001 par value; 300,000,000 shares authorized, 36,642,064 and 24,832,814 shares issued and 36,529,574 and 24,508,795 shares outstanding as of both June 30, 2024 and December 31, 2023 | 3,651 | 2,450 | |
Additional paid-in capital | 114,869,809 | 64,468,141 | |
Subscription receivable | — | (169,616) | |
Accumulated deficit | (86,409,719) | (68,334,381) | |
Total stockholders' equity (deficit) | 28,463,741 | (4,033,406) | |
Total liabilities and stockholders' equity (deficit) | $ 32,766,496 | $ 2,804,549 | |
Serve Robotics Inc. | |||||||||
Three Month Ended | Six Months Ended | ||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
Revenues | $ 468,375 | $ 946,711 | $ 62,009 | $ 1,415,086 | $ 102,261 | ||||
Cost of revenues | 326,013 | 352,438 | 391,367 | 678,451 | 758,628 | ||||
Gross profit (loss) | 142,362 | 594,273 | (329,358) | 736,635 | (656,367) | ||||
Operating expenses: | |||||||||
General and administrative | 1,873,320 | 1,008,071 | 970,819 | 2,881,392 | 1,986,806 | ||||
Operations | 871,211 | 540,974 | 592,648 | 1,412,185 | 1,114,335 | ||||
Research and development | 5,787,906 | 6,638,441 | 2,125,685 | 12,426,347 | 4,208,634 | ||||
Sales and marketing | 165,612 | 118,236 | 83,136 | 283,848 | 362,718 | ||||
Total operating expenses | 8,698,049 | 8,305,722 | 3,772,288 | 17,003,772 | 7,672,493 | ||||
Loss from operations | (9,055,688) | (7,711,449) | (4,101,646) | (16,267,137) | (8,328,860) | ||||
Other income (expense), net: | |||||||||
Interest expense, net | (260,120) | (1,326,522) | (496,862) | (1,586,642) | (538,606) | ||||
Change in fair value of derivative liability | (221,560) | - | - | (221,560) | - | ||||
Change in fair value of simple agreements for future equity | - | - | (367,748) | - | (1,236,912) | ||||
Total other income (expense), net | (481,680) | (1,326,522) | (864,610) | (1,808,202) | (1,775,518) | ||||
Provision for income taxes | - | - | - | - | - | ||||
Net loss | $ (9,037,367) | $ (9,037,971) | $ (4,966,256) | $ (18,075,339) | $ (10,104,378) | ||||
Weighted average common shares outstanding - basic and diluted | 33,795,009 | 24,556,343 | 6,678,372 | 29,176,370 | 6,678,372 | ||||
Net loss per common share - basic and diluted | $ (0.27) | $ (0.37) | $ (0.74) | $ (0.62) | $ (1.51) | ||||
Serve Robotics Inc. | |||
Six Months Ended | |||
2024 | 2023 | ||
Cash flows from operating activities: | |||
Net loss | $ (18,075,338) | $ (10,104,378) | |
Adjustments to reconcile net loss to net cash used in | |||
Depreciation | 27,500 | 931,279 | |
Stock-based compensation | 7,735,469 | 200,872 | |
Amortization of debt discount | 1,677,942 | 466,706 | |
Loss on conversion of note payable | 221,560 | - | |
Change in fair value of simple agreements for future equity | - | 1,236,912 | |
Interest on recourse loan | (2,504) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (90,177) | 23,697 | |
Inventory | 65,060 | (4,704) | |
Prepaid expenses | (443,026) | 16,253 | |
Escrow receivable | (180,000) | - | |
Accounts payable | (663,046) | 704,870 | |
Accrued liabilities | (120,232) | (36,045) | |
Deferred revenue | 52,863 | - | |
Right of use liabilities, net | (28,818) | (23,163) | |
Net cash used in operating activities | (9,820,242) | (6,590,205) | |
Cash flows from investing activities: | |||
Purchase of property and equipment | (798,322) | - | |
Net cash used in investing activities | (798,322) | - | |
Cash flows from financing activities: | |||
Proceeds from simple agreement for future equity | - | 2,666,953 | |
Proceeds from convertible notes payable | 4,844,625 | 2,798,410 | |
Proceeds from note payable, related party | - | 399,000 | |
Exercise of warrants | 5,907 | - | |
Exercise of options | 8,757 | - | |
Proceeds from issuance of common stock pursuant to offering, net of offering costs | 35,849,136 | - | |
Repayments of note payable | (500,000) | (500,000) | |
Repayments of notes payable, related party | (70,000) | - | |
Deferred offering costs | - | (352,617) | |
Repayment of lease liability financing | (746,583) | (1,118,348) | |
Net cash provided by financing activities | 39,391,842 | 3,893,398 | |
Net change in cash and cash equivalents | 28,773,277 | (2,696,807) | |
Cash and cash equivalents at beginning of period | 6,756 | 2,715,719 | |
Cash and cash equivalents at end of period | $ 28,780,033 | $ 18.912 | |
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SOURCE Serve Robotics Inc.
