During the quarter the company’s subscription revenue increased faster than the subscription transaction value because of success in upselling customers to higher value, and higher margin, subscription plans and also by adding more leased vehicles to the fleet during the March 2022 quarter.
In its statement to the Australian Securities Exchange (ASX), Carly said the quarter recorded increases in receipts, a higher proportion of gross revenue to receipts, material decreases in costs and the second consecutive quarter of significant reduction in net cash used in operating activities.
“Receipts from customers increased by 10 per cent compared with the December 2021 quarter and subscription transaction value increased by six per cent, while subscription revenue increased by 18 per cent,” the company said.
Chris Noone
The quarter also introduced some strategic business changes which played a key role in boosting returns.
The company traditionally operated an exclusively asset-light vehicle fleet, where third-party owners provide vehicles in return for owner fees.
“Since COVID-19 caused global disruptions to vehicle supply, Carly commenced purchasing and leasing vehicles to access more vehicle supply channels and meet the increasing demand for car subscription services,” said Carly CEO and director Chris Noone.
“This strategy has been very successful to date, with owned and leased vehicles generating more revenue per vehicle compared to vehicles in the asset-light fleet.”
In the March 2021 quarter, prior to the introduction of owned and leased vehicles, Carly said its subscription revenue was 38 per cent of the subscription transaction value.
This increased to 41 per cent in the December 2021 quarter and reached 46 per cent in the March 2022 quarter
“The success of the owned and leased fleet strategy demonstrates a positive track record of asset selection and monetisation which positions Carly to secure additional asset financing for vehicles to continue growing fleet size and profitability,” said Mr Noone..
“Carly has maintained revenue and use of owned and leased vehicles in excess of initial modeling and expectations” and “intends to continue expanding the vehicle fleet via financing mechanisms to substantially grow the vehicles available for subscription.”
“Carly took advantage of ongoing vehicle supply restrictions to increase subscription fees in March 2022 and rental fees in advance of the Easter and school holiday periods.
“As there were no impacts on demand or vehicle use and due to the continued constraints on vehicle supply, the higher pricing models remain in place.”
Mr Noone said that significant effort had gone into search engine optimisation and customer acquisition cost reductions “with considerable success.”
“Advertising and marketing costs declined by 55 per cent to $47,000 compared to the December 2021 quarter with the business continuing to deliver revenue growth and maintaining high fleet use,” he said in the ASX report.
By Neil Dowling
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