Full year 2022 Adjusted Gross Profit grew to $53.3 million, 14% higher compared to 2021. The Company expects to achieve positive Adjusted EBITDA for Q4 2023.
New York, NY – March 8, 2023 – Rubicon Technologies, Inc. (“Rubicon” or “the Company”) (NYSE: RBT), a leading digital marketplace for waste and recycling and provider of innovative software-based products for businesses and governments worldwide, today reported financial and operational results for the fourth quarter and full year of 2022.
Fourth Quarter 2022 Financial Highlights
- Revenue was $166.0 million, 2% higher compared to $163.3 million in the fourth quarter of 2021.
- Gross Profit was $6.8 million, 17% higher compared $5.8 million in the fourth quarter of 2021.
- Adjusted Gross Profit was $13.4 million, which is roughly flat to the fourth quarter of 2021.
- Net loss was $18.0 million versus a loss of $30.3 million in the fourth quarter of 2021.
- Adjusted EBITDA was negative $17.6 million versus negative $19.5 million in the fourth quarter of 2021.
Full Year 2022 Financial Highlights
- Revenue was $675.4 million, which was 16% higher compared to $583.1 million the full year 2021.
- Gross Profit was $25.0 million for the full year 2022, an increase of 17% compared to $21.4 million generated in 2021.
- Adjusted Gross Profit was $53.3 million in 2022, an increase of 14% compared to the $46.9 million generated in 2021.
- Net loss for the full year 2022 was $281.8 million versus a loss of $73.2 million for the full year 2021.
- Adjusted EBITDA for the full year 2022 was a negative $74.3 million, compared to negative $57.7 million in 2021.
Operational and Business Highlights
- Rubicon made substantial progress on the ‘Bridge to Profitability’ plan during the quarter. This plan seeks to increase financial flexibility, curtail lower-ROI investments, achieve cost reductions, and increase profitability. The Company expects to generate positive Adjusted EBITDA for the fourth quarter 2023.
- Rubicon raised over $39 million of net funded capital and successfully extended certain debt maturities, with the earliest maturities now due at the end of this year. The Company also upsized its revolving credit facility.
- In the fourth quarter, Rubicon signed a two-year extension and expansion of its contract with Walmart, which has been a flagship customer since 2013.
- Also in Q4 2022, Rubicon secured a three-year extension with Sweetgreen, the mission-driven restaurant brand which seeks to serve healthy food at scale. The partnership is enabling Rubicon to continue to expand Sweetgreen’s waste diversion efforts and provide enhanced account management as its lead partner for waste, recycling, and composting services.
- In February, Rubicon established a multi-year channel sales partnership with Bartec, for the license of Rubicon’s products across the UK, furthering progress in the Company’s global expansion.
- In March, Rubicon announced significant growth within its RUBICONSmartCity business, adding 11 new customers in Q4 2022 including the cities of Rochester, NY; Manchester, NH: Surprise, AZ; and Rockville, MD. These cities chose RUBICONSmartCity to help them save money and run more efficient and effective solid waste collection operations.
“We are very proud of our achievements to date and are excited to begin our journey as a publicly traded company. It is a testament to the dedication and diligence of our team that we have already demonstrated significant progress against the goals we set out during our Q3 2022 earnings call,” said Phil Rodoni, CEO of Rubicon. “We believe we have built the definitive platform for eliminating waste which enables us to provide a differentiated service offering to our customers. Our core business is strong, and we are focused on accelerating the Company’s progress to profitability while driving Rubicon’s next phase of growth.”
In the fourth quarter, Revenue totaled $166.0 million, an increase of $2.7 million or 2% from $163.3 million in the fourth quarter of 2021. This growth was driven primarily by increased service with both new and existing customers across business lines.
Gross Profit in the fourth quarter was $6.8 million, 17% higher compared $5.8 million in the fourth quarter of 2021. The growth in Gross Profit was driven primarily by increased service with both new and existing customers across business lines.
In the fourth quarter, Adjusted Gross Profit was $13.4 million, a decrease of $0.1 million or 1% compared to $13.5 million generated in the fourth quarter 2021. This decline was driven by one-time customer expenses but was largely offset by stronger performance in the SaaS product lines.
Net loss was $18.0 million in the fourth quarter, an improvement of $12.3 million compared to $30.3 million in the fourth quarter of 2021. Impacts from increased revenue and decrease in general and administrative expenses as a result of a $10.4 million gain on the settlement of certain management bonuses contributed to the result in the fourth quarter of 2022.
In the fourth quarter, Adjusted EBITDA was negative $17.6 million compared to negative $19.5 million in the fourth quarter of 2021. Impacts from the Company’s merger with Founder SPAC (the “Mergers”) and strategic shift contributed to the result in the fourth quarter of 2022.
Full-Year 2022 Review
Revenue for the full year 2022 totaled $675.4 million, which was $92.3 million or 16% higher compared to the full year 2021. This revenue growth was driven by volume growth in the Company’s core business.
Gross Profit in 2022 totaled $25.0 million, which was $3.6 million or 17% higher compared to $21.4 million in 2021. The growth in Gross Profit was driven primarily by continued expansion within the Company’s existing customer base, as well as the addition of new customers.
In 2022, Adjusted Gross Profit totaled $53.3 million, an increase $6.4 million or 14% compared to $46.9 million generated in 2021. This growth was driven primarily by continued expansion within the Company’s existing customer base, as well as the addition of new customers.
Net losses totaled $281.8 million in 2022, compared to net losses of $73.2 million in 2021. Impacts from nonrecurring expenses in connection with the Mergers, including management bonus payments and equity compensation costs, contributed to the annual result in 2022.
Adjusted EBITDA totaled a negative $74.3 million compared to negative $57.7 in 2021. Impacts from the Mergers and strategic shift as well as a software expense increase related to our license and strategic partnership agreement with Palantir contributed to the lower result in 2022.
To address cash needs and increase working capital, the Company is currently in discussions with financing sources to potentially raise new equity and recapitalize debt prior to its maturity. In parallel, management is implementing additional measures to further reduce spending and extend cash availability. Though there is no guarantee the Company will be able to successfully implement any or all of its current plans, these initiatives are intended to increase financial flexibility and push out debt maturities with the ultimate goal of realizing greater shareholder value by improving Rubicon’s financial position and future liquidity.
Rubicon is aiming to accelerate its progress to profitability, investing in its leading digital marketplace and suite of products, and further developing the strategic vision and execution plan for Rubicon’s next phase of growth. Rubicon has increased focus on operational efficiencies and is working to accelerate cost reduction measures across the organization, with a goal of thoughtfully and diligently optimizing margins across the portfolio. The Company will share additional information on its “bridge to profitability” plan in the coming quarters as we continue to develop our plans.
On February 21, 2023, Rubicon announced that the Company’s President, Kevin Schubert, had been appointed Chief Financial Officer. Schubert had served as Rubicon’s Chief Development Officer since August 2022, until the time of his appointment as President in October 2022. Schubert now oversees Rubicon’s end-to-end financial operations and is working to further develop the financial infrastructure, teams, and processes to enable the Company to meet its strategic goals, including the acceleration of the Company’s progress to profitability. In addition, Schubert also oversees Rubicon’s legal function. Schubert brings a wealth of finance, legal, and corporate development experience to his roles as President and Chief Financial Officer. Prior to Rubicon, Schubert held senior executive and advisory roles with multiple public companies, including Red Rock Resorts Inc., the Las Vegas Sands Corp, and he recently held the role of Chief Financial Officer for Ocean Park Group, an early stage company focused on experiential hospitality.
The Rubicon Technologies management team will host a conference call to discuss its fourth quarter and full year 2022 financial results this afternoon, Wednesday, March 8, 2023, at 5pm ET. The call can also be accessed live via telephone by dialing (888) 660-6863 or for international callers (929) 203-2112, and referencing Rubicon Technologies. Please log in to the webcast or dial in to the call at least 10 minutes prior to the start of the event. The live webcast of the conference will also be available at https://investors.rubicon.com/events-presentations/default.aspx, on the Events and Presentations page on the Investor Relations section of Rubicon’s website.
Rubicon Technologies, Inc. (NYSE: RBT) is a digital marketplace for waste and recycling, and provider of innovative software-based products for businesses and governments worldwide. Striving to create a new industry standard by using technology to drive environmental innovation, the Company helps turn businesses into more sustainable enterprises, and neighborhoods into greener and smarter places to live and work. Rubicon’s mission is to end waste. It helps its partners find economic value in their waste streams and confidently execute on their sustainability goals. To learn more, visit rubicon.com.
Non-GAAP Financial Measures
This earnings release contains “non-GAAP financial measures,” including Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA, which are supplemental financial measures that are not calculated or presented in accordance with generally accepted accounting principles (GAAP). Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies. Definitions of these non-GAAP financial measures, including explanations of the ways in which Rubicon’s management uses these non-GAAP measures to evaluate its business, the substantive reasons why Rubicon’s management believes that these non-GAAP measures provide useful information to investors and limitations associated with the use of these non-GAAP measures, are included under “Use of Non-GAAP Financial Measures” after the tables below. In addition, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included under “Reconciliations of Non-GAAP Financial Measures” after the tables below.
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements. When used in this press release, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon current expectations, estimates, projections, and assumptions that, while considered reasonable by Rubicon and its management, are inherently uncertain; factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the outcome of any legal proceedings that may be instituted against Rubicon or others following the closing of the Mergers; 2) Rubicon’s ability to meet the NYSE’s listing standards following the consummation of the Mergers; 3) the risk that the Mergers disrupt current plans and operations of Rubicon as a result of consummation of the Mergers; 4) the ability to recognize the anticipated benefits of the Mergers, which may be affected by, among other things, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; 5) costs related to the Mergers; 6) changes in applicable laws or regulations; 7) the possibility that Rubicon may be adversely affected by other economic, business and/or competitive factors, including the impacts of the COVID-19 pandemic, geopolitical conflicts, such as the conflict between Russia and Ukraine, the effects of inflation and potential recessionary conditions; 8) Rubicon’s execution of anticipated operational efficiency initiatives and cost reduction measures; and 9) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Registration Statement on Form S-1, as amended, filed with the SEC, and other documents Rubicon has filed, with the SEC. Although Rubicon believes the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward looking statements will be achieved. There may be additional risks that Rubicon presently does not know of or that Rubicon currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements, many of which are beyond Rubicon’s control. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Rubicon does not undertake, and expressly disclaims, any duty to update these forward-looking statements, except as otherwise required by applicable law.
Sioban Hickie, ICR, Inc.
Chief Marketing & Corporate Communications Officer
Statements and balance sheets related to this release can be found on the Investor Relations section of Rubicon’s website.