Just hours after Bird said it had overstated revenue for more than two years by acknowledging unpaid rides from customers, Bird dropped a growing concern warning. In a legal filing, the company said it may have to “reduce or cease some or all operations to reduce costs or seek bankruptcy protection.”
Bird ended the third quarter with free cash flow of $38.5 million. Without additional funding, the company said it would not be able to meet its obligations in the coming year. Bird points to “factors beyond its control,” such as current market volatility, that could affect whether and how Bird receives further equity or debt financing.
“Accordingly, the Company intends to continue to closely monitor its operational projections, reduce its operating costs and pursue additional sources of outside capital,” the filing reads. “Along with this global footprint realignment, the company is pursuing further reductions in its operating costs.”
Bird has struggled since going public via a special purpose merger in 2021. The fledgling company’s dramas have only grown in recent months. Since May, Bird has dismantled its retail business, laid off 23% of its staff, received a warning from the New York Stock Exchange over trades trading too low and exited Germany, Sweden, Norway and “several dozen” markets in the US. Travis VanderZanden stepped down as president and then CEO, and was replaced in both positions by Shane Torchiana.
Bird isn’t the only SPAC this year to issue a growing concern warning. Canoo and Arrival also both said they may not have enough money to market their EVs, and Arrival also recently received a warning from the Nasdaq to delist.
Bird’s stock is down nearly 16% today and is currently trading at $0.36. The company has until next month to push its share price above $1.00, according to the NYSE’s warning.
Bird’s Q3 financials
In the third quarter, Bird said revenue increased 19% to $72.9 million, compared to $61.1 million in the same quarter last year. Bird shared its revenue increase on the same day it announced it had overstated past earnings and should no longer rely on financial statements from the past two years.
Bird had counted preloaded wallet balances in its total earnings and is now analyzing balances it does not expect to cash in in the future, according to Ben Lu, Bird’s chief financial officer. Lu said Bird would complete this audit in the fourth quarter.
“Upon completion, we expect to post ongoing breaking revenue and anticipate posting a true-up that would increase our revenue next quarter,” Lu said in a statement. “As a result of these two accounting adjustments, we are retracting our revenue guidance for the previous fiscal year 2022 from $275 to $325 million.”
Lu didn’t elaborate on how Bird would settle past over-earnings, or whether Bird would issue new full-year earnings guidance.
Bird ended the quarter with a net loss of $9.8 million, compared to a net loss of $42.1 million in the prior year, suggesting the company’s many cost-cutting measures had an impact. Indeed, Bird’s Q3 operating expenses were $29.4 million, down $10.6 million from Q3 2021. However, without additional cash, Bird could exit more than a few dozen markets.