Zipcar Shrinks Net Loss in Second Quarter

Zipcar Inc. today reported results for the second quarter, which ended June 30, 2012.

For the 2012 second quarter, revenue increased 15% to $70.8 million compared to $61.6 million in the prior year period. Revenue growth in the 2012 second quarter resulted primarily from a 21% increase in membership to more than 731,000 members at quarter end.

Usage revenue per vehicle, per day was unchanged at $65 versus the prior-year period. Usage revenue represented $60.4 million in the second quarter of 2012, compared to $53.3 million in the prior-year period with fee revenue representing substantially all the remaining revenue in both periods. Fee revenue represented 14.6% of total revenue in the 2012 second quarter compared to 13.4% in the prior year period.

Scott Griffith, Zipcar chairman and CEO, said, "We generated solid double digit revenue growth in the second quarter and grew total membership by 21% year-on-year. We also launched our Zipvan service into new markets and extended our geographic reach in both North America and Europe. Despite these gains, we brought in fewer members than we had anticipated, and we faced economic challenges in our UK business. Moving forward, we are taking actions to maximize returns on our marketing spend, and we will be rolling out initiatives to accelerate adoption and expand our service offerings."

In Zipcar's Established Markets — Boston, New York, Washington, D.C. and San Francisco — second quarter revenue grew 16% to $39.8 million compared to $34.4 million in the prior-year period primarily due to new member additions.

Income before tax for the Established Markets was unchanged at 22% of revenue in the second quarter 2012 compared to the prior-year period.

US GAAP net loss in the second quarter of 2012 was ($422,000), compared to a loss of ($5.6) million in the prior-year period.

Non-GAAP Results

Adjusted EBITDA for the 2012 second quarter was $3.4 million compared to $2.3 million in the prior-year period as a result of revenue growth and operating leverage.

"We effectively managed expenses and reported solid year-on-year growth in adjusted EBITDA," commented Ed Goldfinger, Zipcar CFO. "Our focus in the near-term will be on introducing new initiatives designed to reignite member growth."

Outlook

For the full-year 2012, revenue is now expected in the range of $272 million to $278 million. Full-year 2012 Adjusted EBITDA is now expected to range from $12 million to $16 million and US GAAP net income is now expected to range from breakeven to $4 million.

For the 2012 third quarter, Zipcar expects revenue in the range of $74 million to $77 million. Adjusted EBITDA for the period is expected to range from $2.5 million to $5 million and US GAAP net income is expected to range from a loss of $0.5 million to a profit of $2 million.

Other Highlights

  • Membership grew to more than 731,000 at quarter end.
  • Launched Zipvan service in Chicago and Toronto for a total of 165 Zipvans in five markets in North America and more than 200 Zipvans in the UK.
  • Following quarter end, Zipcar expanded its European network with acquisition of CarSharing.at, the car sharing service in Austria with approximately 200 vehicles and 10,000 members.

To view other company results, click here.

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