Carro posts 67% revenue jump in FY 2023, generates positive adjusted EBITDA

Photo credit: Carro

Used-car marketplace Carro recorded a jump in revenue last year, as sales continued to rise and its investments in other areas like financing, insurance, and aftersales bloomed.

The Singapore-based company’s revenue grew 67% year on year to S$1.1 billion (US$818 million) in the financial year ended March 31, 2023, according to its audited financial statement.

While its core marketplace arm contributed 90% of its revenue, “the highest growth came from recurring and highly profitable ecosystem-led ancillaries (financing, mobility, insurance, aftersales),” Carro CFO Ernest Chew told Tech in Asia.

This has led to an improvement in gross profit margins, jumping from 5.3% in FY 2022 to 7.5% in FY 2023, he added. However, this figure would imply that Carro’s gross profit would be around US$61.1 million.

Meanwhile, losses after tax ballooned for FY 2023 to US$94 million from US$6.7 million in the prior year. This was due to a large contribution from unrealized strategic investment losses.

“In particular, one of our acquisitions has had its assets significantly revalued upward, but ironically had negatively impacted our P&L (e.g., higher depreciation, reversal of fair value uplift) in the short term,” explained Chew.

In FY 2023, Carro made several moves to expand its offerings. One of these was a joint investment with Funding Societies into Indonesia’s Bank Index to bolster its fintech capabilities.

Carro also bought a 50% stake in Indonesian car rental firm Mitra Pinasthika Mustika Rent for a reported amount of US$54 million. In addition, it rolled out its services in Japan through a collaboration with SoftBank.

This is reflected in the company’s adjusted operating profit for the year, which improved 6% to negative US$28.9 million.

Additionally, employment benefits expense (before share-based compensation) almost doubled in FY 2023 to US$55 million, the biggest contributor to its expenses in the period.

“Our preferred way of looking is employee benefits as percent of gross profit,” said Chew. “Employee benefits (before share-based compensation) as a percent of gross profit has dropped significantly from 115% in FY 2022 to 89% in FY 2023.”

This would mean that the company generated more gross profit per employment cost for FY 2023.

Overall, Carro’s adjusted EBITDA for the year went into the green at almost US$3 million, a number it improved going into FY 2024. Chew said it expects to achieve EBITDA of US$33 million to US$37 million and positive adjusted operating profit for FY 2024.