Urgent.ly targets Q3 breakeven and insurance expansion as AI platform drives operational gains

Earnings Call Insights: Urgent.ly Inc. (ULY) Q2 2025

MANAGEMENT VIEW

* CEO Matthew Booth stated that the company delivered revenue of $31.7 million in the second quarter, marking the eighth consecutive quarter of meeting revenue guidance. Booth highlighted, "our second quarter performance was our best quarter as a public company to date."
* Booth emphasized sequential quarterly revenue growth and progress following the Otonomo merger and earlier customer partner nonrenewal, noting, "we delivered modest sequential quarterly revenue growth versus the first quarter of 2025, which is a milestone for us as we finished cycling through the noncomparable quarters resulting from the Otonomo merger and the customer partner nonrenewal."
* The company achieved a gross margin of 25%, within its midterm outlook, and reported "non-GAAP operating loss for the quarter was approximately $200,000, the best reported to date and better than our guidance of about $500,000," according to Booth.
* Booth discussed the signing of a new contract with a premium insurance provider, ongoing negotiations with two additional insurance providers, and a new contract with an EV manufacturer.
* Technological advancements included the launch of SPARK, an AI-powered market analyzer, which Booth said contributed to "wait time... reduced by over 20 minutes on average" in Miami Beach and improvements in other markets.
* Booth noted customer satisfaction reached an all-time high at 4.7 out of 5 stars.
* Booth outlined core priorities: expanding B2B business through renewals and new customer partner opportunities, maintaining operational breakeven, and entering new and adjacent markets.
* Andrea Makkai, Principal Accounting Officer, stated, "revenues were $31.7 million, which was just ahead of the midpoint of our guidance range of $30 million to $33 million and a decline of 8% or $3 million from the same quarter last year."
* Makkai discussed improvements in operating expenses, stating, "operating expenses for the second quarter were $10.1 million, a decrease of $5.6 million or an improvement of 36% from the same period last year."

OUTLOOK

* For Q3 2025, Makkai said, "we expect revenue to be between $31 million to $34 million, and we continue to target maintaining non-GAAP operating breakeven in the third quarter."
* Management reported ongoing positive contract negotiations and highlighted continued focus on revenue growth, operational improvements, and margin expansion.

FINANCIAL RESULTS

* The company reported gross profit of $7.9 million for Q2, an increase of $600,000 compared to the same period last year.
* Gross margin was 25% compared to 21.2% for the same period last year, attributed to technology optimizations and service provider cost management.
* Operating expenses were $10.1 million, with significant year-over-year decreases across R&D, sales and marketing, operations and support, and general and administrative costs.
* Non-GAAP operating expenses for Q2 were $8.1 million, an improvement of 40% from the prior year period; GAAP operating loss was $2.2 million, a decrease of $6.2 million or an improvement of 74% from the prior year period.
* As of June 30, 2025, the company reported cash and cash equivalents of $4.8 million and a principal debt balance of $55.3 million.

Q&A

* Christopher Alan Pierce, Needham: Asked about revenue timing from the new insurance provider and seasonality impacts. Booth responded, "end of Q3, beginning of Q4 is when we'll start to see the pickup in volume," and discussed flattening seasonality due to AI initiatives.
* Pierce inquired about further OpEx leverage. Makkai replied, "ongoing OpEx costs, we expect to be minimal. And so we are going to expect there to be more of a breakeven on a non-GAAP basis situation as well."
* James Patrick McIlree, Chardan Capital: Asked about renewal revenue quantification. Booth stated, "it's about 40% of the renewals that are up for this year, we've renewed so far with the other ones making very good progress."
* McIlree asked about sales cycle speed. Booth indicated, "I wouldn't say that it's taken longer than we thought or it's taken a shorter amount of time...it's pretty much following the standard playbook."
* McIlree requested clarity on recurring, nonrecurring transaction costs. Makkai said, "we don't expect any large ones on an ongoing basis."

SENTIMENT ANALYSIS

* Analysts were inquisitive and focused on the timing of revenue growth, operating leverage, and progress on renewals, with a neutral to slightly positive tone as they sought clarity on growth catalysts and cost containment.
* Management maintained a positive and confident tone in both prepared remarks and Q&A, emphasizing progress and technological advancements. Booth stated, "The momentum is exciting, and I look forward to the remaining of the year ahead."
* Compared to the previous quarter, management’s tone remained optimistic, with similar analyst emphasis on growth drivers and operational efficiency.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for Q3 2025 revenue ($31 million to $34 million) is consistent with the previous quarter’s Q2 guidance.
* Management shifted toward highlighting operational breakeven and margin improvement, and placed increased emphasis on AI-driven operational scale and the insurance market expansion.
* The transition in CFO role from Tim Huffmyer to Booth as Principal Financial Officer and Makkai as Principal Accounting Officer was noted.
* Analyst questions maintained focus on renewals, insurance market entry, and operating leverage, mirroring previous quarter themes.
* Key metrics such as gross margin, operating expenses, and customer satisfaction continued to improve or remain strong.

RISKS AND CONCERNS

* Revenue decline year-over-year was attributed to loss of a major OEM partner and Otonomo-related reductions.
* Ongoing transaction and restructuring costs from Otonomo were flagged but are expected to diminish.
* High debt levels and reliance on contract renewals and new insurance partnerships remain ongoing areas to monitor.

FINAL TAKEAWAY

Urgent.ly management highlighted a strong operational quarter driven by AI and technology investment, with sequential revenue growth and margin improvements. The company is focused on expanding its insurance market presence, maintaining operational breakeven, and leveraging new contracts to drive revenue in the second half of the year. The leadership transition and continued reduction in Otonomo-related costs are positioning Urgent.ly for sustained profitable growth. Investors are directed to watch for developments in insurance contract execution and the rollout of AI-driven products for future performance.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/uly/earnings/transcripts]

MORE ON URGENT.LY INC.

* Urgent.ly Inc. (ULY) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4812875-urgent-ly-inc-uly-q2-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on Urgent.ly Inc. [https://seekingalpha.com/symbol/ULY/ratings/quant-ratings]
* Historical earnings data for Urgent.ly Inc. [https://seekingalpha.com/symbol/ULY/earnings]
* Financial information for Urgent.ly Inc. [https://seekingalpha.com/symbol/ULY/income-statement]