Zipcar makes a comeback and exceeds expectations for Q3 revenue and earnings
The Zipcar sign at Manhattan parking garage. Shinya Suzuki / Flickr.com
Competition is growing against Zipcar, especially in local markets, but its recent successful expansion in Spain and Austria gives investors confidence for further growth efforts.
Zipcar reported a 15 percent increase in earnings and 18 percent increase in users during its 2012 third quarter earnings call on Thursday. This is a vast improvement from the car-sharing company’s disappointing second-quarter losses.
In the wake of an increasingly competitive car-sharing market, Zipcar is looking to decrease barriers to trail and continues to develop a number of niche initiatives that include:
Zipcar for Business. This membership model created for businesses to supply employee transportation is the fastest growing sector of the service in the UK. This is due to their SalarySacrifice program which allows employees to use their pretax salary to pay for time in a Zipcar.
Zipcar for Government. Zipcar provides its FastFleet technology to government-owned vehicles. There are currently only 10 existing Z4G programs, but Zipcar is looking to expand the program.
Zipcar for University. Zipcar passed the 300 mark for participating universities this quarter and the program continues to grow.
ZipVan. The Zipvan program piloted one year ago and received positive consumer feedback. Zipcar plans to introduce the service to all its metro markets in North American in 2013.
These niche programs, in addition to Zipcar’s expansion in Europe, will be key to keeping its position as the current market leader. Zipcar projects 2012 will mark its first profitable year.
Other key figures from Zipcar’s Q3 earnings call:
- Total revenue increased to $78.2 million, up 15% year-over-year.
- Net income increased to $4.3 million over an income of $651,000 in last year’s third quarter
- There were 767,000 users at the end of Q3, up 18% year-over-year.
- Zipcar entered its 20th major metro market in Miami.
- Zipcar completed the integration of Avancar, Spain’s largest car sharing service, and the acquisition of Carsharing.at, an Austrian car sharing network.
- Zipvan was launched in Seattle, Los Angeles, Philadelphia, and Portland.