PARTS iD, Inc.

Q3 2022 net revenue declined 22.1% year over year; management did not state a dollar revenue figure in the call. Adjusted EBITDA was positive $159,000 versus $138,000 in the year-ago period. Operating loss was reduced by nearly 30% year over year, and gross margin improved by 20 basis points quarter over quarter for the second consecutive quarter. Cash decreased by $3.1 million in the quarter, with $2.1 million tied to working capital; total assets were $37.1 million at September 30 versus $52.5 million at December 31. For guidance/actions, management said prior cost-saving actions are expected to deliver about $12 million in annualized savings, a new shipping contract should reduce outbound shipping costs by about 15% net, and the company recently announced a $5 million senior secured term loan with the ability to receive up to an additional $5 million at JGB’s discretion. No formal revenue or EPS guidance was provided.

Nino Ciappina framed the quarter as a period of operating discipline in a tough macro backdrop, emphasizing that the company is controlling what it can control. He pointed to cost cuts, ad optimization, reduced overhead and capital spending, plus a new shipping contract, as steps toward positive adjusted EBITDA and free cash flow. Strategically, he highlighted growth lanes in repair parts, private label, adjacent verticals and online-to-offline services, while cautioning that a return to top-line growth depends in part on a better consumer environment.

Kailas Agrawal said the company made progress on profitability despite the 22.1% revenue decline, with adjusted EBITDA positive at $159,000 versus $138,000 a year ago. He cited a nearly 30% reduction in operating loss, 20 basis points of gross margin improvement quarter over quarter, and about 84% realization of the planned $12 million annualized cost savings by the end of Q3. On liquidity, he said cash was $6.5 million after the $5 million borrowing, cash declined $3.1 million in the quarter, working capital use improved to $2.1 million from $7.7 million last quarter, and the company is pursuing additional capital-raising options.

Analysts focused first on liquidity and then on the revenue decline and path back to growth. Management said the cash balance was $6.5 million after the $5 million borrowing, and noted that operating cash usage has been driven largely by the revenue decline and the company’s negative working capital model; they also said they are filing shelf registrations and working to activate capital-raising options. On growth, management said accessories remain under pressure because of weak discretionary demand and lower new-vehicle sales, but pointed to repair parts, OEM growth, tire-installation services, and adjacent vertical SKU expansion as the main paths to eventual recovery.