Car Rental Company Zoomcar’s Loss Down By 92% To $2.5 Mn, Revenue Falls 15%

In the first quarter of fiscal year 2024–25 (Q1 FY25), Zoomcar, a self-driving car marketplace listed on the Nasdaq, successfully reduced its loss thanks to a substantial decrease in financing expenses. Net loss for the company decreased 92% from $28.78 million to $2.53 million in the quarter under review.

Still, operating revenue decreased as well. From $2.61 million in Q1 FY24 to $2.20 million in Q2 FY24, services revenue decreased 15%.

According to a statement from the startup, traction for its services increased during the quarter despite the decline in revenue. In the first quarter of FY25, Zoomcar had 1.12 lakh bookings, a 9% increase from the previous year. Bookings increased, it was reported, even though less money was spent on host incentives and performance marketing.

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The quarter’s total costs and expenses decreased by 44.5% to $5.61 million from $10.11 million in the previous year due to lower sales and marketing and revenue costs. Revenue costs decreased by 58% to $1.51 million from $3.61 million in the same quarter last year, while marketing and sales costs decreased by 70% to $802.5K in Q1 FY25 from $2.70 million in the same quarter previous year.

In addition, the startup’s financing expenses dropped significantly over the quarter. Finance expenses decreased by more than 97% to $551K from $21.52 Mn in the same quarter last year.

“Broad-based cost optimisation initiatives driven by technology and product,” according to Zoomcar, are the reason behind the decrease in expenses.

It claimed to have tightened the guest verification procedure during the quarter, which decreased the number of accidents and late returns.

The firm reported that, from $6.8 million in Q1 FY24 to $3.3 million this quarter, its adjusted EBITDA loss decreased as well.

“Our continued efficiency efforts have shown strength in our first fiscal quarter results. In addition to setting the stage for significant revenue growth in the upcoming quarters, we achieved record non-GAAP gross profit and contribution profit,” said Hiroshi Nishijima, Zoomcar’s recently hired CEO, in a statement.

Zoomcar released a unified app earlier this month to improve the car-sharing experience for both hosts and visitors.

The company’s finances have improved, but in recent months, there have been several changes to its upper deck. Greg Moran, a cofounder of Zoomcar, lost his job as CEO on June 27. Nishijima, its former COO, subsequently assumed Moran’s position.

In addition, Adarsh Menon, the worldwide president of Zoomcar, resigned in July.