Roadzen Reports Q2 Revenue Growth, Adjusted EBITDA Loss Falls

Roadzen Inc. a global leader in AI at the convergence of insurance and mobility, today announced its second quarter and six-month financial results for the period ended September 30, 2024.

Rohan Malhotra, Founder and CEO of Roadzen, stated, "This quarter marked substantial progress in revenue acceleration, product development, and cost reduction. With 33% sequential revenue growth and a 25% improvement in Adjusted EBITDA loss from the prior quarter, we are advancing our long-term strategy. We expect revenue momentum to continue in the second half of FY25 as we aim to resume U.K. sales and pursue growth in the

U.S. and India."

Malhotra continued, “The verticalization of AI for legacy industries like insurance presents a generational opportunity, and our pioneering work at the convergence of AI, insurance and mobility delivers a better auto insurance experience to clients across the world. Our technology enables precise risk assessments, personalized pricing, real-time claims management, and accident prevention. The launch of MixtapeAI is one of our most significant product unveilings in recent years, and we are leveraging it to drive internal improvements, reduce operating costs, and transform customer interactions. Our shareholders have shown immense confidence in our vision to build one of the leading AI companies in the public markets, and we are committed to repaying that confidence through our execution.”

Roadzen’s Chief Financial Officer, Jean-Noël Gallardo, added, “Our efforts on improving the Company’s balance sheet yielded significant progress during the second quarter. Total accounts payable and accrued expenses were reduced by $4.0 million, an 11% decrease over the first quarter. We also continued to increase global operational efficiencies powered by our own AI models, enabling us to reduce headcount, consuming fewer resources while achieving results. Going forward, we expect to reap additional benefits from the continued optimization of our operations, which will be reflected in the second half of the year.”

Second Quarter and First Half Financial Highlights:

Revenue and Key Performance Indicators

Revenue for the second quarter totaled $11.9 million, an increase of 33% over the first quarter as the Company achieved organic growth across U.S. and India. Year-over-year, revenue for the quarter decreased by $3.6 million, or 23%, over the prior year quarter. Revenue for the six months ended September 30, 2024, was $20.8 million, a decrease of $0.3 million, or 1.3%, when compared to the same period last year. The revenue decrease for both periods was primarily due to the temporary countrywide suspension of GAP insurance sales by the U.K. Financial Conduct Authority for all insurance carriers. The Company is currently making plans to resume GAP product sales by the fourth quarter of this fiscal year.

As of September 30, 2024, Roadzen had 34 insurance customer agreements (including

carriers, self-insureds and other entities processing insurance claims), 74 automotive customer agreements, and approximately 3,550 agents and fleet customer agreements.

Roadzen sold 70,618 policies during the second quarter generating $10.1 million of Gross Written Premium (“GWP”), compared to 78,009 policies in the prior fiscal year second quarter, producing $20.6 million of GWP, with the difference entirely coming from the U.K. market. In addition, 607,577 claims, roadside assistance and vehicle inspections were conducted during the three months ending September 30, 2024, compared to 406,897 for the same period in the prior year.

Expenses and Net Results 

Operating expenses for the second quarter, excluding Cost of Services and Depreciation and Amortization, totaled approximately $30.0 million, an increase of $13.8 million compared to the prior year quarter due primarily to $20.7 million of non-cash equity compensation expense related to RSUs granted to employees a year ago, partially offset by a decrease in Sales & Marketing expenses in the U.K. while GAP product sales were temporarily halted.

Operating expenses for the six-month period, excluding Cost of services and Depreciation and Amortization increased $40.5 million over the prior year six-month period to $63.4 million, reflecting $42.1 million in non-cash RSU employee compensation expense. The 9.9 million RSUs granted in September 2023 have been fully accounted for and will have no further impact on the Company’s quarterly results; we will continue to incur expenses for newly issued RSUs.

The Company reported Other Income of $1.5 million for the quarter, compared to Other Expense of $23.6 million the same quarter last year. The Company reported Other Expenses of $16.4 million and $23.7 million for the six-month periods ending September 30, 2024 and 2023, respectively. The $7.3 million decrease reflects lower non-cash fair market valuation adjustment in the current year period of $5.3 million partially offset by an increase of $613,000 in interest expense, primarily due to an increase in borrowings from banks.

In total, the net loss for the second quarter of $21.8 million or $(0.32) per share includes $19.7 million of non-cash, non-recurring and other extraordinary items that, when excluded, result in an Adjusted EBITDA loss of $2.1 million, or $(0.03) per share. This compares to an Adjusted EBITDA loss of $3.6 million or $(0.16) per share in the second quarter of the prior year and

$2.9 million or $(0.04) per share in the first quarter.

The Company’s average monthly cash used in operating activities during the second quarter totaled approximately $1.9 million, an $82,000 decrease from the first quarter and a $3.2 million decrease over the same quarter last year, during which Roadzen had only just established operations in the U.S. and U.K.

Balance Sheet

Cash and equivalents at September 30, 2024 totaled $6.0 million, a decrease of $1.8 million as compared to the June 30, 2024 balance of $7.8 million.

Assets totaled $29.1 million at September 30, 2024, compared to $34.1 million as of June 30, 2024, a decrease of approximately 14.7% predominately due to a reduction in cash and a $2.5 million reduction in the prepayment balance resulting from a fair value adjustment of a forward purchase agreement.

Total liabilities were $63.4 million at September 30, 2024, a decrease of $3.7 million from June 30, 2024 and $5.2 million less than March 31, 2024, predominately reflecting a $4.3 million reduction in payables and accrued expenses during the quarter. The Company’s current liabilities totaled $61.0 million at September 30, 2024, which includes approximately $15.7 million in Accrued Expenses assumed by Roadzen in connection with the September 2023

Business Combination, and $13.2 million in liabilities to Mizuho Securities USA LLC (“Mizuho”) that includes short-term borrowings of $11.5 million and a $1.7 million fair valuation of warrants granted as part of the Mizuho debt agreement.

Long-Term debt totaled approximately $1.3 million at September 30, 2024, roughly in line with both year end and first quarter figures.

Second Quarter Financial Developments

 The Company announced in a press release that it is focused on strengthening and right sizing the balance sheet while addressing the accrued expenses and stock considerations it inherited through its September 2023 business combination with Vahanna Tech Edge Acquisition I Corp. As previously announced, during the second quarter, Roadzen entered into definitive agreements with certain related parties including Avacara Pte Ltd, and Pi Capital International Inc. and its affiliate Marco Polo Securities, Inc., entities controlled by the CEO and the Chairman of Roadzen, respectively, to swap $3.5 million in debt for equity at $2.80 per share; Mizuho agreed to extend its $7.5 million senior secured 15% note and provided an additional $4.0 million in cash under the same terms, bringing the total principal to $11.5 million; and at the end of the second quarter, shareholders holding approximately 56 million shares of the Company agreed - with no additional considerations - to extend their lock-up agreements for another twelve months to September 20, 2025.

Second Quarter FY2025 Operational Highlights New Product Launch – Subsequent Development

October 30, 2024, Roadzen’s AI Lab unveiled MixtapeAI, a platform designed to power AI agents and transform customer interactions in the insurance and mobility sectors. With MixtapeAI, insurers, brokers, agents, carmakers, and fleets can deliver natural, intelligent, personalized, quick, and secure customer responses, while automating complex workflows across multiple touchpoints.

Roadzen intends to initially deploy MixtapeAI internally by levering the technology to make internal administration functions more efficient and cost-effective. Roadzen has received strong, positive feedback on early demonstrations with select longstanding Roadzen customers.