Urgent.ly Reports 22% Revenue Decline in Q1 2025 Amid Customer Losses

Urgent.ly Inc. reported a significant decline in its financial performance for the first quarter of 2025, with total revenue falling to $31.3 million, a decrease of 22% from $40.1 million in the same period last year. The company attributed this decline primarily to reduced dispatch volumes resulting from the non-renewal of a major auto manufacturer customer, which alone accounted for a $4.5 million drop in revenue. Additionally, existing customer dispatch volumes decreased, contributing to a $3.9 million revenue loss, while the Otonomo business also saw a $1.6 million reduction. Despite these challenges, the company did experience a $1.5 million revenue increase from two new customer partnerships and an expansion with an existing partner.

The cost of revenue also decreased, dropping by 24% to $23.3 million, largely due to the overall decline in dispatch volume, which led to a $6.3 million reduction in service provider fees. As a result, Urgent.ly's gross profit for the quarter was $8.0 million, down from $9.4 million a year earlier. Operating expenses were significantly reduced, totaling $10.4 million compared to $17.7 million in the prior year, reflecting a strategic effort to streamline operations and cut costs. This included a 54% reduction in research and development expenses and a 65% decrease in sales and marketing costs, resulting in an operating loss of $2.4 million, an improvement from the $8.3 million loss reported in the same quarter of 2024.

Urgent.ly's total liabilities as of March 31, 2025, stood at $82.5 million, with a stockholders' deficit of $36.1 million. The company has been actively managing its debt, with a principal balance of $56.7 million, and has recently amended its loan agreements to extend maturity dates and adjust interest rates. The company also undertook a restructuring initiative, reducing its workforce by 13% to align operational costs with revenue, which resulted in restructuring charges of $174,000.

Looking ahead, Urgent.ly faces substantial liquidity risks, as indicated by its history of operating losses and reliance on debt and equity financing. The company reported cash and cash equivalents of $6.4 million as of March 31, 2025, raising concerns about its ability to continue as a going concern. Management has acknowledged the need for additional capital to support operations and growth initiatives, and they are exploring various funding options. The company is also focused on enhancing its technology platform and expanding its customer base to drive future revenue growth.

In summary, while Urgent.ly has made strides in reducing operating expenses and improving its operational efficiency, the significant drop in revenue and ongoing liquidity challenges present critical hurdles for the company as it navigates the remainder of 2025. The management's forward-looking statements emphasize the importance of acquiring new customer partners and maintaining existing relationships to stabilize and grow the business in a competitive market.