Rubicon Reports Third Quarter 2023 Financial Results

Rubicon achieves third consecutive quarter of record Gross Profit at approximately $13.4 million, more than double Gross Profit over the third quarter of 2022.

NEW YORK: Rubicon Technologies, Inc. (“Rubicon” or the “Company”) (NYSE: RBT), a leading provider of software-based waste, recycling, and fleet operations products for businesses and governments worldwide, today reported financial and operational results for the third quarter of 2023.

Third Quarter 2023 Financial Highlights

• Revenue was $171.3 million, a decrease of $13.7 million or 7.4% compared to $185.0 million in the third quarter of 2022.
• Net Loss was $(30.2) million, an improvement of $180.9 million or 85.7% compared to $(211.1) million in the third quarter of 2022.
• Gross Profit was $13.4 million, an increase of $6.8 million or 102.8% compared to $6.6 million in the third quarter of 2022.
• Adjusted Gross Profit was $19.8 million, an increase of $5.7 million or 40.5% compared to $14.1 million in the third quarter of 2022.
• Gross Profit Margin was 7.8%, an increase of 424 bps compared to 3.6% in the third quarter of 2022.
• Adjusted Gross Profit Margin was 11.6%, an increase of 395 bps compared to 7.6% in the third quarter of 2022.
• Adjusted EBITDA was $(8.9) million, an improvement of $12.2 million or 57.7% compared to $(21.1) million in the third quarter of 2022.

Operational and Business Highlights

• The Company announced a new, 5-year partnership with the City of Phoenix, Arizona in September. The new agreement with Phoenix, which is the fifth largest city in the United States, will put Rubicon’s smart city software at the heart of the City’s Public Works Department, providing waste and recycling collection to more than 418,000 locations weekly. Rubicon will help Phoenix digitize its solid waste collection operation, transitioning from largely manual and paper-based processes to running the Company’s software in the City’s solid waste and recycling fleet of more than 300 vehicles.
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• The Company is pleased to announce a new, 5-year partnership with the City of Austin, Texas. Rubicon will help Austin, the eleventh largest city in the United States, continue its process of digitizing its solid waste and recycling collection operations across its fleet of 290 vehicles, which service more than 210,000 locations every week. Austin will use the Company’s technology to streamline collection, track material and tonnage on its bulky trash routes, and reduce missed pickups and unnecessary go-backs. Austin will be able to closely monitor route performance, identify areas where waste and recycling services can be improved, and make data-driven decisions to enhance route efficiency and better serve its residents.
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• RUBICONConnect™ welcomed the addition of Neiman Marcus and Atlantis Management Group to the platform, among others. Both companies will experience the full benefits of Rubicon’s digital platform for scalable waste and recycling services, which supports their efforts to reduce environmental impact while providing exceptional value and service to their own customers.
  

• The Company also announced a 2-year extension of its existing agreement with Americold. RUBICONConnect has been deployed at more than 150 Americold locations since 2020, and the Company manages Americold’s trash, mixed recycling, baled cardboard, baled plastic, and food waste. The new agreement extends this relationship through the end of 2025 and includes a go-forward plan to onboard more locations from within the Americold portfolio.

“We are excited to announce our third quarter 2023 results, which include a third consecutive quarter of record Adjusted Gross Profit,” said Phil Rodoni, Chief Executive Officer of Rubicon. “The results we are reporting today reflect continued progress against our Bridge to Profitability plan and are a testament to the entire Rubicon team and their hard work and dedication. We are focused on execution and driving even greater results for the Company and our valued customers.”

Third Quarter Review

Revenue was $171.3 million, a decrease of $13.7 million or 7.4% compared to $185.0 million in the third quarter of 2022. The decline is mainly driven by softness in commodities, in particular prices of old corrugated cardboard.

Gross Profit was $13.4 million, an increase of $6.8 million or 102.8% compared to $6.6 million in the third quarter of 2022. The growth in Gross Profit was driven by portfolio optimization and margin improvement in the RUBICONConnect business, and by platform support cost reduction initiatives.

Adjusted Gross Profit was $19.8 million, an increase of $5.7 million or 40.5% compared to $14.1 million in the third quarter of 2022. The increase in Adjusted Gross Profit was primarily the result of the optimization of the portfolio and margin improvement in the RUBICONConnect business.

Net Loss was $(30.2) million, an improvement of $180.9 million or 85.7% compared to $(211.1) million in the third quarter of 2022.

Adjusted EBITDA was $(8.9) million, an improvement of $12.2 million or a reduction of more than half of the loss of $(21.1) million in the third quarter of 2022.

Update on Strategic Plan

In the third quarter of 2022, Rubicon outlined its strategic plan and committed to materially improving its operational performance and strengthening its financial position. The Company acknowledged the challenges it faced and laid out the steps required to get to profitability and growth. Rubicon completed all the highest priority tasks from its plan, with certain goals achieved ahead of schedule. Specifically, the Company committed to:

• Extending debt maturities. Rubicon successfully pushed maturities out to 2025 from 2023.
• Improving its liquidity position. Rubicon closed a $75 million term loan and expanded its revolver capacity by $15 million.
• Reducing expenses. Rubicon reduced expenses by $55 million on an annualized basis.
• Expanding Adjusted Gross Profit margin to double digits by the end of 2023. Rubicon surpassed 10% in the second quarter, ahead of its goal.
• Securing additional financing. Rubicon brought in an additional $24 million of equity financing from new and existing investors in Q2.

To underscore the Company’s exceptional performance during an extremely turbulent time, while completing all of the above it was able to drive 35.1% growth in Adjusted Gross Profit on a year-to-date basis in 2023 as compared to the same prior year period. All of this was accomplished while Rubicon continued to deliver for its customers, diverting over 800 thousand tons of waste from landfill equating to approximately 1.6 million MTCO2e emissions avoided for the first half of 2023.

Webcast Information

The Rubicon Technologies, Inc. management team will host a conference call to discuss its third quarter 2023 financial results this afternoon, Wednesday, November 8, 2023, at 5:00 p.m. ET. The call can be accessed via telephone by dialing (929) 203-2112, or toll free at (888) 660-6863, and referencing Rubicon Technologies, Inc. A live webcast of the conference will also be available on the Events and Presentations page on the Investor Relations section of Rubicon’s website (https://investors.rubicon.com/events-presentations/default.aspx). Please log in to the webcast or dial in to the call at least 10 minutes prior to the start of the event.

About Rubicon

Rubicon Technologies, Inc. (NYSE: RBT) is a leading provider of software-based waste, recycling, and fleet operations products for businesses and governments worldwide. Striving to create a new industry standard by using technology to drive environmental innovation, the Company helps turn businesses into more sustainable enterprises, and neighborhoods into greener and smarter places to live and work. Rubicon’s mission is to end waste. It helps its partners find economic value in their waste streams and confidently execute on their sustainability goals. To learn more, visit rubicon.com.

Non-GAAP Financial Measures

This earnings release contains “non-GAAP financial measures,” including Adjusted Gross Profit, Adjusted Gross Profit Margin and Adjusted EBITDA, which are supplemental financial measures that are not calculated or presented in accordance with generally accepted accounting principles (GAAP). Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies. Definitions of these non-GAAP financial measures, including explanations of the ways in which Rubicon’s management uses these non-GAAP measures to evaluate its business, the substantive reasons why Rubicon’s management believes that these non-GAAP measures provide useful information to investors and limitations associated with the use of these non-GAAP measures, are included under “Use of Non-GAAP Financial Measures” after the tables below. In addition, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included under “Reconciliations of Non-GAAP Financial Measures” after the tables below.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements. When used in this press release, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon current expectations, estimates, projections, and assumptions that, while considered reasonable by Rubicon and its management, are inherently uncertain; factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the outcome of any legal proceedings that may be instituted against Rubicon or others following the closing of the business combination; 2) Rubicon’s ability to continue to meet the New York Stock Exchange’s listing standards following the consummation of the business combination; 3) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; 4) continued costs related to the business combination; 5) changes in applicable laws or regulations; 6) the possibility that Rubicon may be adversely affected by other economic, business and/or competitive factors, including the continued impacts of the COVID-19 pandemic, geopolitical conflicts, such as the conflict between Israel and Hamas or Russia and Ukraine, the effects of inflation and potential recessionary conditions; 7) Rubicon’s execution of anticipated operational efficiency initiatives, cost reduction measures and financing arrangements; and 8) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K, Registration Statement on Form S-1, as amended, filed with the U.S. Securities and Exchange Commission (the “SEC”), and other documents Rubicon has filed with the SEC. Although Rubicon believes the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward looking statements will be achieved. There may be additional risks that Rubicon presently does not know of or that Rubicon currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements, many of which are beyond Rubicon’s control. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Rubicon does not undertake, and expressly disclaims, any duty to update these forward-looking statements, except as otherwise required by applicable law.

Statements and balance sheets related to this release can be found on the Investor Relations section of Rubicon’s website.