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DATE

Wednesday, November 12, 2025 at 5:00 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Matthew Booth
  • Controller and Principal Accounting Officer — Andrea Makkai
  • Director of Investor Relations — Jenny Mitchell

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RISKS

  • NASDAQ has granted an extension only through February 16, 2026, for Urgent.ly (ULY +0.00%) to meet continued listing requirements, citing noncompliance on net income from continuing operations, market value of listed securities, and stockholders' equity.
  • Revenues declined by 9% year-over-year to $32.9 million, primarily due to the early termination of a top-five global original equipment manufacturer partner and reduced contributions from the Autonomous business.
  • Principal debt remains at $61 million with only $4 million in cash and cash equivalents as of quarter end.

TAKEAWAYS

  • Revenue -- $32.9 million for the quarter, which management noted was "in line with our expectations" and ahead of the midpoint of guidance; this marks the eighth consecutive quarter achieving revenue guidance.
  • Revenue Growth (Sequential) -- Achieved a second consecutive quarter of modest sequential revenue improvement.
  • Revenue Growth (YOY) -- Down 9%, or $3.3 million lower, driven by the loss of a major OEM partner and reduced Autonomous business revenue, partially offset by volume and rate increases from new and existing partners.
  • Gross Margin -- 25% for the quarter, up four points from the prior year period and within the stated 25%-30% midterm outlook range.
  • Gross Profit -- $8.1 million, increasing by $346,000 compared to the prior year due to improved margins.
  • Operating Expenses (GAAP) -- $9.9 million, a decrease of $3.8 million, or 28%, year-over-year.
  • Non-GAAP Operating Expenses -- $8.0 million, down 25% from $10.7 million in the prior year period, demonstrating realized operational efficiencies.
  • Non-GAAP Operating Income -- $123,000, a reversal from a non-GAAP operating loss of $2.9 million in the prior year, described as a "profitability inflection point."
  • GAAP Operating Loss -- $1.8 million, which improved by $4.1 million, or 70%, compared to the prior year.
  • Cash and Cash Equivalents -- $4.0 million at quarter end.
  • Principal Debt -- $61 million as of quarter end.
  • ATM Share Issuance -- Sold 181,000 shares for net proceeds of $273,000 at an average price of $4.19 per share during the quarter.
  • Customer Renewals -- Management reported an ongoing productive renewal cycle, with contracts ranging from two to five years and described as a "big year" due to multiple OEM and fleet partner renewals.
  • Insurance Segment Expansion -- Contract launches with a premium insurance provider slated for later in the month, with two additional mid-tier insurance providers in contract negotiations ("in red lines"), plus a pilot program awarded with a large-scale insurance provider.
  • Fleet and EV Market Wins -- Signed two new contracts in the fleet, autonomous vehicle, and affinity brand segments, with two additional agreements under negotiation.
  • New EV Partnership -- Signed with Sony Honda Mobility of America to provide roadside services to Aphelio owners nationwide, with service integration aligned for the launch of Aphelio I in 2026.
  • Technology Capex -- Approximately $1.5 million capitalized for software enhancements in the quarter; projected $1 million to $1.5 million for all of 2025.
  • Customer Satisfaction -- Reported average customer satisfaction score of 4.6 out of 5 stars.
  • Outlook (Full-Year 2025) -- Revenue expected between $30 million and $33 million; non-GAAP operating loss projected at less than $500,000, with non-GAAP operating breakeven targeted for the fourth quarter.
  • Recapitalization Plan -- Management emphasized the need for a balance sheet recapitalization as "key and necessary" to fulfilling NASDAQ compliance and unlocking incremental shareholder value.

SUMMARY

Management confirmed a non-GAAP operating income milestone after several quarters of negative results, characterizing it as a pivotal shift toward profitability. The quarter's financials reflect substantial reductions across operating expenses, particularly in research and development as well as in sales and marketing, largely attributed to scaling back the autonomous business. Strategic customer contract renewals and new insurance and fleet agreements are in progress, including a high-profile EV partnership with Sony Honda Mobility. The company emphasized execution on its technology-driven platform enhancements and pointed to steady customer satisfaction metrics. Ongoing NASDAQ compliance efforts hinge on recapitalization and operational discipline amid continued high leverage and modest cash levels.

  • CEO Booth stated, "we are now focused on new account growth and expanding our market share."
  • Controller Makkai reported, "Non-GAAP operating expenses for the third quarter were $8 million, an improvement of 25% from $10.7 million in the prior year period."
  • CEO Booth described the business as "anti-cyclical," noting that increased vehicle breakdowns in weaker economic environments could drive higher incident volumes and revenue.
  • Management highlighted "momentum in securing revenue from new logos across the fleet, autonomous vehicle, and affinity brand verticals."
  • Planned website relaunch will showcase platform, analytics, and machine learning offerings.
  • Guidance reiterated for managed operational costs and sustaining non-GAAP operating breakeven, with continued focus on advancing technology and market share expansion strategies.

INDUSTRY GLOSSARY

  • OEM (Original Equipment Manufacturer): A company that produces vehicles or parts that are purchased by another company and retailed under that purchasing company's brand name.
  • ATM Program: At-the-market equity offering program allowing a company to raise capital by selling shares directly on the open market at prevailing prices.
  • Red Lines: The contract negotiation phase where final edits and unresolved issues are being marked and discussed before agreement is executed.
  • Champion-Challenger Model: A vendor selection approach in which a primary supplier (champion) is periodically evaluated against a competing supplier (challenger) to ensure performance and pricing competitiveness.

Full Conference Call Transcript

Jenny Mitchell: Thank you, Operator. Good afternoon, everyone, and thank you for joining us for Urgent.ly Inc. Common Stock's financial results conference call for the third quarter ended September 30, 2025. On the call today, we have Urgent.ly Inc. Common Stock CEO, Matthew Booth, and Urgent.ly Inc. Common Stock Controller and Principal Accounting Officer, Andrea Makkai. Following Matthew Booth and Andrea Makkai's prepared remarks, we will take your questions. Before we begin, I'd like to remind you that some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions, which could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements.

A description of these risks, uncertainties, and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent annual report on Form 10-K for the year ended December 31, 2024, our quarterly reports on Form 10-Q, and other filings and reports that we may file from time to time with the SEC. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. During today's call, we will also discuss certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our earnings materials and press release, which are available on our website at investors.geturgently.com.

A replay of today's call will also be posted on the website. As you learned from our 8-K and press release filed on September 22, 2025, NASDAQ formally notified Urgent.ly Inc. Common Stock that its net income from continuing operations had fallen below the minimum requirement and that it did not meet the alternative listing criteria for market value of listed securities or stockholders' equity for continued listing on the NASDAQ Capital Market under NASDAQ Listing Rule 5,150. In response, Urgent.ly Inc. Common Stock requested a hearing and presented before the NASDAQ panel on October 23, 2025. At the hearing, Urgent.ly Inc.

Common Stock presented its plan to regain compliance with the NASDAQ listing rules and requested an extension through February 16, 2026, to achieve and demonstrate long-term compliance. Last week, on November 5, 2025, the NASDAQ panel granted Urgent.ly Inc. Common Stock the continued listing extension through the requested date. With that, I'll now turn the call over to Matthew Booth.

Matthew Booth: Thanks, Jenny, and good afternoon, everyone, and thank you for joining us today. I'm very pleased with our performance during the third quarter. The momentum is building across the business, and I'm excited to provide an update on our recent progress. To begin, we're happy to announce that for Q3, we have achieved positive non-GAAP operating income. This is an important milestone. Let me begin with some other important highlights from our financial performance. We delivered $32.9 million in revenue for the third quarter, which was in line with our expectations. And notably, our eighth consecutive quarter where we delivered on our revenue guidance commitment.

In addition, we delivered our second quarter of modest sequential quarterly revenue improvement, which demonstrates early signs of our return to growth. For the third quarter, we achieved a gross margin of 25%, which is again within our midterm outlook of the 25% to 30% range that we continue to reference as our longer-term target. This is a four-point improvement over the third quarter last year. Over the last three years, we've improved Q3 gross margin by 13 points, from 12% in Q3 2022 to 25% in Q3 2025. In all, we reduced the non-GAAP operating expenses by $2.7 million or 25% when compared to the same period last year.

And most notably, as I mentioned at the top of the call, we achieved non-GAAP operating income for Q3 2025. I am so proud of the team and their hard work for achieving this milestone. The results reinforce our commitment to disciplined execution and long-term value creation. This signals a profitability inflection point. As we have discussed previously, we are now focused on new account growth and expanding our market share. First, let me talk about revenue starting with renewals. As we've discussed on prior calls, a portion of our annual capacity is dedicated to securing revenue through renewals. This is a big year for us.

We're on pace for a productive renewal cycle with a handful of our OEM and fleet customer partners up for renewal. The specifics vary, but generally, we are looking at contracts from two to five years in length. Next, we would like to provide an update on our progress in the insurance markets. Last quarter, we mentioned that we signed a new contract with a premium insurance provider. This contract is now scheduled to launch later this month. We are also currently in red lines with two additional insurance providers in the mid-tier space. We are looking forward to providing transparent, high-quality service to this previously underserved segment of the insurance market.

We still believe that most of the single-source roadside contracts will have two providers in the future, and this champion-challenger model produces better results for partners. To this end, we have been awarded a pilot with a large-scale insurance provider, which provides us with an excellent opportunity to feature our technology and prove our value. We will provide more details on this in the coming months. We are also gaining momentum in securing revenue from new logos across the fleet, autonomous vehicle, and affinity brand verticals. We have signed two new contracts and are in red lines with two others. Last quarter, we discussed that we signed a contract with a new EV manufacturer.

In our October 7 press release, we announced this partnership with Sony Honda Mobility of America to provide its Aphelio owners with reliable nationwide coverage across all 50 states and the District of Columbia. The vehicle and the Urgent.ly Inc. Common Stock logo were proudly displayed in Las Vegas at the InsurTech Conference held in September. Beginning with the US delivery of the Aphelio I in 2026, Sony Honda Mobility customers will have access to Urgent.ly Inc. Common Stock's extensive network of mobility assistance providers. Our partnership with Sony Honda Mobility and their Aphelio brand centers on delivering an exceptional customer assistance experience that matches their groundbreaking vehicle.

We anticipate Aphelio customers to be digitally sophisticated, expecting seamless high-quality service when assistance is needed, which perfectly aligns with our technology-driven approach to roadside assistance. With this agreement, we are already preparing service integration to align with the Aphelio One delivery to ensure that roadside assistance will be ready from day one. Our digitally native platform leveraging AI and machine learning has given us substantial operating scale and credibility in the market by creating predictive models to enhance performance for partners using temporal, spatial, and network data. On that front, we look forward to sharing even more about our capabilities in these areas. Our company website is undergoing a much-needed refresh and update.

We have transformed this experience to showcase our platform, product features, data analytics dashboards, products, including our full suite of AI machine learning capabilities, and our service and solutions offering. Our website relaunch will be in the next few weeks. As Jenny mentioned earlier, we are actively pursuing strategies to comply with our NASDAQ listing requirements. More specifically, these strategies are focused on recapitalizing our balance sheet. For those that have been following our journey and are familiar with our financials, the recapitalization of our balance sheet is expected.

We do believe that this is a key and necessary step to unlocking incremental value for shareholders, especially as we are pivoting to profitability, gaining momentum in new account growth, and producing high customer satisfaction scores, which are currently at 4.6 out of 5 stars. We are looking forward to providing updates on all of these topics as we are able. As we look ahead to 2025, our growth priorities remain returning to growth by expanding our existing B2B incident business through securing renewals, expanding relationships with existing customer partners, and developing new customer partner opportunities.

Continuing to maintain non-GAAP operating breakeven through our operational improvements, margin expansion, and managed growth, transforming the market for roadside solutions with product innovations that differentiate Urgent.ly Inc. Common Stock from our competitors, improve our margin, and provide exceptional experiences for our customer partners and drivers. We plan to enter new and adjacent markets in the future. It's been a fantastic quarter, and I am proud of all the progress we have made. The momentum is exciting, and I look forward to the remainder of the year ahead. Thank you again for your time and continued support. I'll now turn the call over to Andrea Makkai to discuss our financial results.

Andrea Makkai: Thank you, Matthew, and good afternoon, everyone. Today, I will discuss our results for the third quarter ended September 30, 2025. For the third quarter, revenues were $32.9 million, which was ahead of the midpoint of our guidance range of $31 million to $34 million and a decline of 9% or $3.3 million from the same quarter last year. The year-over-year revenue decline was in line with our expectations and was primarily driven by the reduction in dispatch volume from the early termination of a top-five global original equipment manufacturer customer partner referenced in our Q1 2025 filings and the reduction of revenue due from the Autonomous business.

This was partially offset by volume and rate increases from new and existing customer partners. Gross profit was $8.1 million, an increase of $346,000 compared to the same period last year, driven primarily by margin improvement initiatives. Gross margin was 25% compared to 21% for the same period last year. The increase in gross margin is primarily related to the mix of service dispatches and our continued technology optimizations allowing us to better manage our service provider costs. We remain focused on executing against our strategic initiatives to drive profitable growth and continue to make steady progress to maintain our long-term gross margin target of 25% to 30%. Now let's move on to operating expenses.

Operating expenses were $9.9 million, a decrease of $3.8 million or an improvement of 28% from the same period last year. Research and development expenses were $1.8 million compared to $3.1 million during the same period last year, a decrease of $1.3 million or 42%. The decrease was mostly related to the reduction in the autonomous-related research and development expenses and the reduction in employee and employee-related expenses. Sales and marketing expenses were $700,000 compared to $1.5 million during the same period last year, a decrease of $800,000 or 53%. The decrease was mostly related to the reduction in the autonomous-related sales and marketing expenses.

Operations and support costs were $2.5 million compared to $3 million during the same period last year, a decrease of $500,000 or 16%. This decrease was mostly related to the continued optimization of customer support representative resources and operational process improvements. General and administrative expenses were $3.7 million compared to $4.9 million during the same period last year, a decrease of $1.3 million or 26%. The decrease was mostly related to the reduction in the autonomous-related general and administrative expenses along with continued cost optimization. We remain focused on driving operational improvements, which include continued optimization of business processes to drive further operational efficiencies.

We also review non-GAAP operating expenses, which is defined as GAAP operating expenses plus depreciation and amortization expense, stock-based compensation expense, and nonrecurring charges such as transaction costs and restructuring costs. Non-GAAP operating expenses for the third quarter were $8 million, an improvement of 25% from $10.7 million in the prior year period. This non-GAAP operating expense is in line with our expectations and demonstrates the significant operational efficiencies and leverage we have achieved. GAAP operating loss for the third quarter was $1.8 million, a decrease of $4.1 million or an improvement of 70% from the prior year period.

Matthew Booth: We also review non-GAAP operating loss, which is defined

Andrea Makkai: as GAAP operating loss plus depreciation and amortization expense, stock-based compensation expense, and nonrecurring charges such as transaction costs and restructuring costs. Non-GAAP operating income for the third quarter was $123,000, an improvement from a non-GAAP operating loss of $2.9 million in the prior year

Matthew Booth: period.

Andrea Makkai: This is a significant milestone for the company as we met our stated guidance to achieve breakeven on a non-GAAP operating basis during 2025. While this represents a meaningful accomplishment, we view it as one step in our ongoing journey and not the destination. We remain committed to optimizing our business and operating model to drive continued improvement in this metric going forward. Now a few comments on our balance sheet. As of September 30, 2025, Urgent.ly Inc. Common Stock had a cash and cash equivalents balance of $4 million and a principal debt balance of $61 million.

During the third quarter, we capitalized approximately $1.5 million in software, mostly to make enhancements to our platform by adding features and functionality which benefit all our customer partners. We expect this practice to continue with approximately $1 million to $1.5 million to be capitalized in 2025. During the third quarter, we sold 181,000 shares of common stock under our ATM program to raise approximately $273,000 in net proceeds after fees and commissions at a weighted average price of $4.19 per share. As of September 30, 2025, we had 1.6 million shares of common stock outstanding. Turning now to our outlook.

For 2025, we expect revenue to be between $30 million to $33 million and our non-GAAP operating loss to be again less than $500,000. Additionally, we continue to target maintaining non-GAAP operating breakeven in the fourth quarter. With that, we are now happy to open the call for questions. Operator, please open the line for Q&A.

Operator: Ladies and gentlemen, at this time, we'll begin the question and answer session. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Christopher Alan Pierce from Needham. Please go ahead with your question.

Christopher Alan Pierce: Hey, just one big picture question and then one kind of more smaller, like, near-term question. How should investors think about Urgent.ly Inc. Common Stock positioning if we do see a weakening economy, maybe less new car sales, but I know you guys are levered more towards premium OEMs, but then you have insurance customers sort of coming on. As you see older cars on the road perhaps, I guess I'd just love to kind of hear you kind of refine how to think about parts of the economy and parts of your business and how you have hedges and kind of where investors should think about that going forward?

Matthew Booth: Yeah. Hey, Christopher. It's Matthew. Good to hear from you. Good question. We get this a lot. So I think in a lot of ways, Urgent.ly Inc. Common Stock is an anti-cyclical business. So the more that the economy starts to fall through or get worse or consumers start to put off repairs in their vehicles, what you'll start to see are an increased amount of incidents or breakdowns on our side. So we should look at our revenue actually improving as consumers put off needed repairs. And in terms of the OEM side, seeing that pretty good deliveries on the OEM side so far, so I don't think we've seen any tariff impacts as far as that goes.

So I think, you know, as the economy gets worse or if it gets worse and cars break down more, Urgent.ly Inc. Common Stock will continue to do better.

Christopher Alan Pierce: Okay, perfect. And then I know I heard the revenue guidance. I guess it's probably maybe too early to start thinking about '26, but the fourth quarter of 2025 is your first quote-unquote easier comp given toward the customer transact customer and forth that you had at the end of last year. How should we think about moving forward with the renewals you talked about and the new customer wins and the insurance customer trialing going forward? I know you still have a 25% to 30% revenue target over time. But I just kinda wanna think about or 20% to 30%. Sorry. Just think about, you know, the time frame around that. I want investors to get comfortable around.

Matthew Booth: Yeah. I think we're, as we mentioned before, now that we've shed the Autonomous assets and removed the expenses from the Autonomous business, we have started to put the foot on the gas pedal, so to speak, and started to grow revenue. We have a lot of really good opportunities in the pipeline. Mentioned in the script that we have one with a top insurance company that we're starting that'll start at least the pilot will start this year, which we're very excited about because as we've mentioned previously, moving back into insurance is pretty important. Additionally, we also signed another insurance company. So a couple more fleet customers on top of it.

So I think the revenue is definitely starting to tick up. Renewals look great. Customers are very happy with us so far. We don't have any issues with customers, and we expect to finish this year with an extremely strong renewal cycle.

Christopher Alan Pierce: Okay. Trevor. Thanks. Good luck.

Matthew Booth: Thanks, Russ.

Operator: Once again, if you would like to withdraw your questions, you may press star and 2. Ladies and gentlemen, at this time, showing no additional questions, I'd like to turn the floor back over to Matthew Booth for any closing remarks.

Matthew Booth: Great. Thanks, everybody. In closing, we're proud of the significant progress we've made to position the company for profitable growth. We look forward to providing you with future updates on our progress on future calls. If you'd like to meet with management, by all means, please reach out to us at [email protected], and we can schedule a call. Thanks again for your interest in Urgent.ly Inc. Common Stock and for joining our call today.

Operator: And with that, ladies and gentlemen, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.