TORONTO, Aug. 29, 2024 /CNW/ - Argo Corporation (TSXV:ARGH), (OTCQX:ARGHF) ("Argo" or the "Company"), a new technology venture by former Tesla, Uber and Facebook executives and engineers, today announced and filed its financial results for the quarter ended June 30, 2024 ("Q2 2024"). During the second quarter of 2024, Argo officially began operations, taking over with a new management team, board of directors and a strategic focus on building the world's first vertically and publicly integrated city transit solution, as announced on June 11.
The Company's Q2 results included revenue of $413,758, with a gross margin of 14.6%. During the quarter, the Company restructured operations, downsizing the EV subscription business by 91% while significantly ramping up R&D investment by 327% compared to Q2 2023 in preparation for its proprietary transit software and hardware solutions launch. The Company recorded a 103% increase in revenue from On-Demand Services compared to Q2 2023. Year-over-year, Sales & Marketing expenses were reduced by 64%, G&A expenses by 45%, and Operations by 39%. These reductions were driven by adjustments in customer acquisition costs, the wind down of underperforming business units, and improved back-office efficiencies through the use of technology. Quarter-over-quarter, these actions resulted in a 39% decrease in net loss, positioning the Company for accretive growth as it prepares to deploy and scale its new business units.
Since the first quarter of this year, the Company has restructured its business units, established a new high-calibre board and management team, and built a top-tier technology talent team that has returned to Canada from Silicon Valley to build Argo. The foundational Argo technology solution is also now ready for near-term deployment.
Earlier this month, Argo announced its plans to create the world's first vertically and publicly integrated city transit system powered through partnerships with cities, transit agencies and governments. The ultimate goal is to increase access to and ridership of transit systems by making public transit the most convenient way to move within and across cities while putting people in control of their mobility.
The Company noted it will soon launch within the Greater Toronto Area, offering first- and last-mile rides that will move commuters between their homes, workplaces and train stations, alongside several programs for schools. These initial deployments will showcase Argo's vehicle tracking and coordination technology and the transparency and usability of its app in collaboration with partners and city governments.
FoodsUp Developments
FoodsUp, one of Canada's leading restaurant supply platforms, continues to demonstrate exceptional growth and value as part of the Company's portfolio. In fiscal 2023, FoodsUp achieved $72.58M in annual revenue. In Q2 2024, the Company saw a 72% year-over-year revenue growth, rising from $15.26M to $26.2M, while expanding its active customer base by 24%, from 3,043 to 3,781.
With the Company holding a 59.95% stake, there remains a strategic plan to divest a majority of its indirect equity interest to shareholders. This would allow shareholders to directly benefit from FoodsUp's rapid expansion and increasing market presence. While the divestment is not guaranteed, it represents a significant opportunity for shareholders to capitalize on the Company's continued success.
Second Quarter Highlights
Revenue Growth: The Company's On-Demand Services revenue grew by 103% year-over-year in Q2 2024, driven by the continued expansion of the DAAS business division, which provides last-mile delivery services to large retailers.
R&D Investment: R&D investment increased by 327% yearly as the Company developed its proprietary transit software and hardware solutions, preparing for post-launch demand.
Cost Optimization: Sales & Marketing expenses decreased by 64%, and G&A expenses were reduced by 45% year-over-year, reflecting strategic cost management initiatives and efficiency improvements.
Asset Divestment: The Company retains a 59.95% indirect equity interest in FoodsUp on its balance sheet for its shareholders. Further to previous public disclosure, the Company remains committed to implementing a divestment of most of its FoodsUp equity interest to shareholders.
Second Quarter Results Compared to Q2 2023
For the three months ended June 30
2024
2023
REVENUE
413,758
