The fast-growing car-sharing service delivered speedy revenue growth, even as its bottom line shifted into reverse. Revenue soared 48% to $49.1 million, with half of its growth attributable to last year's acquisition of United Kingdom Zipcar wannabe Streetcar.
There are now 577,000 members paying an annual fee for the right to rent fully insured and gassed-up cars by the hour. That's a 57% spurt over the past year, or a still impressive 31% uptick if you back out Streetcar.
Zipcar's net loss widened from $5.3 million to $6.1 million during the first quarter, but its adjusted EBITDA loss did improve during the period.
The red ink is expected as Zipcar builds out its fleet in major metropolitan cities and sprawling college campuses. Slow the game down, and Zipcar's actually making money in its older markets.
Zipcar's four established markets of Boston, New York City, Washington, D.C., and San Francisco posted $4.6 million in pre-tax earnings -- up 45% -- on a 20% top-line uptick to $27.1 million.
Think about that for a bit. Zipcar's cranking out 17% in pre-tax profit margins in the four cities that account for more than half of its revenue.
The good times should keep rolling. Zipcar's targeting as much as $60 million in revenue during the current quarter, so we're talking about some serious top-line acceleration. Zipcar's guidance calls for a loss of $7 million to $8 million, but positive adjusted EBITDA.
Looking out to all of 2011, Zipcar's looking at $235 million to $240 million in revenue, as much as $8 million in adjusted EBITDA, and a net loss between $13 million and $17 million. Since Zipcar's already targeting to lose $13.1 million to $14.1 million during the first half of the year, the optimistic end of Zipcar's outlook would find it fishtailing the corner toward profitability by year's end.
Zipcar's had an eventful first few weeks as a public company. It went public at $18 last month, hitting an intraday high of $31.50 on its first day on the market. It was all downhill from there, until the shares bottomed out at $23.53 last week. The stock's been revving over the past few days, ahead of last night's report. The bidding war between Hertz
Auto sharing may never make a dent outside of its established base, but there's clearly room for Zipcar to grow its presence. The risks and rewards are high here. It will be a checkered flag or a pit crew blowout, and the next few quarters promise to be a wild ride.
Is car sharing a viable business or are Zipcar's 577,000 members crazy? Share your thoughts in the comment box below.