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Rohan Malhotra, CEO and Founder of Roadzen
Roadzen Inc. a global leader in AI at the convergence of insurance and mobility, today announced its first quarter financial results for the three-months ended June 30, 2024.
“We closed another solid quarter of year-over-year revenue growth, primarily driven by our U.S. and India markets. This momentum positions us for continued growth in FY25, even as we navigate challenges including the UK’s Financial Conduct Authority’s (“FCA”) temporary, industry-wide pause on automotive GAP insurance product sales in the UK, which had been tracking above $5 million in quarterly revenue for Roadzen. Despite this pause, we have achieved our best first quarter in our history and are confident that European growth will resume in the coming months,” commented Rohan Malhotra, CEO and Founder of Roadzen. “Our drive to profitability is yielding results, with Adjusted EBITDA improvements over the past three quarters. Additionally, we expect to complete the restructuring of our one-time going-public costs and liabilities in the next quarter. This will not only normalize our balance sheet but also allow us to refocus on the excitement surrounding Roadzen’s technology, our strong revenue growth, and the continued addition of marquee global clients over the past year.”
Mr. Malhotra continued, “Looking ahead, I believe that with our leadership in AI, enterprise- focused business model, and operating presence in three of the largest auto insurance markets in the world – the U.S., India, and the U.K./E.U. – Roadzen has the potential to be one of the most exciting insurance technology companies in the public markets.”
Jean-Noël Gallardo, Roadzen’s CFO added, “We have clear goals for our company this year: to simplify and right-size our balance sheet, grow revenues and cut costs, and we have made significant progress this current quarter on achieving these goals. We are emerging from the legacy overhang inherited from the going-public process and are encouraged by the support received from all parties involved. We’re also pleased to have extended the maturity and increased the amount of our senior secured debt with Mizuho through the end of the calendar year, as they remain supportive partners for our growth.”
First Quarter 2024 Financial Highlights:
Revenue and Key Performance Indicators
- Revenue reached $8.9 million, an increase of 59% over the same period in the prior year, reflecting incremental revenue from the U.S. market and continuing growth in India. Revenue from brokerage solutions accounted for 35% of revenue, increasing $2.0 million, or 186% over the prior year’s first quarter, while IaaS revenue accounted for the remaining 65% of revenue, increasing $1.3 million, or 29% over the prior year period.
- The Company’s U.K. business was impacted by a countrywide halt of automotive GAP insurance sales by the FCA for all insurance carriers in the U.K. The FCA issued guidance for the resumption of online sales of GAP insurance in July, and for embedded sales to be resumed within the next quarter.
- As of June 30, 2024, we had 34 insurance customer agreements (including carriers, self- insureds and other entities processing insurance claims), compared to 26 last June. There were 71 automotive customer agreements at the end of the quarter, compared to 33 last June. We had approximately 3,400 agents and fleet customer agreements compared to 2,000 last June.
- In the brokerage business, 99,695 policies were sold during the first quarter, equating to $11.5 million in Gross Written Premium (“GWP”), compared to 27,168 sold in the same quarter last year, totaling $3.5 million of GWP, a 267% and 229% year-over-year increase, respectively.
- In our IaaS business, 547,233 claims and vehicle inspections were conducted using our AI solutions during the first quarter compared to 350,107 the prior year first quarter, representing a 56% increase.
Expenses and Net Results
- Operating expenses excluding depreciation and amortization totaled approximately $33.4 million in the first quarter of fiscal 2025, an increase of $26.6 million compared to the same period in the prior year. Included in this fiscal year operating expenses was $26.2 million of non-cash equity compensation expense related to RSUs granted to employees on September 18, 2023.
- Other expenses totaled approximately $18.0 million in the first quarter, which includes $17.2 million of non-cash expense related to fair market valuation adjustments of financial instruments, including the Forward Purchase Agreement and warrants.
- In total, net loss for the first quarter of fiscal 2025 includes $44.2 million of non-cash, non- recurring and other extraordinary items that, when excluded, result in an Adjusted EBITDA loss of $2.9 million. This compares to an Adjusted EBITDA loss of $1.7 million in the prior year’s first quarter.
First Quarter 2025 Operational Highlights
- In July, the Company announced it was kicking off a balance sheet reconstitution program aimed at strengthening and simplifying its balance sheet, while addressing the legacy overhang inherited through the going-public process. To start this program, the Company agreed to convert nearly $3.5 million of short-term liabilities due to entities affiliated with our Chairman and CEO into equity, followed by an agreement with Mizuho to extend its $7.5 million note through December 31, 2024 while increasing the total principal to $11.5 million. Roadzen is committed to restructuring its balance sheet by seeking to convert other short-term liabilities into equity or long-term notes.
- On June 25, 2024, Roadzen announced that it has been chosen to provide AI-powered claims processing for India’s government-owned Oriental Insurance Company Ltd., the 6th largest insurer in India. It is estimated that Roadzen will be processing a minimum of 50,000 claims annually with significant upside potential upon the successful demonstration of faster processing speed, lower loss ratio and enhanced customer experience.
- On June 12, 2024, Roadzen announced a significant partnership with a leading commercial auto-focused agency network that is expected to add $10+ million to Roadzen’s annual revenue. Roadzen completed the onboarding process within 36 hours of a 1,200-person salesforce that is presently generating revenues for Roadzen at a run rate of approximately $1 million per month which is expected to grow to full monthly output by the end of the calendar year.
- On April 29, 2024, the Company announced that it received a 5-year contract from Dalmia Transport & Logistics, one of India’s largest logistics fleet operators, to install Roadzen’s DrivebuddyAI technology across its entire fleet.