Argo Corporation, a new technology venture spearheaded by former executives and engineers from companies like Tesla, Uber, and Facebook, has announced its financial results for the second quarter of 2024 (Q2 2024). The company has undergone a strategic shift, transitioning from an electric vehicle (EV) subscription business model to a bold mission: building the world’s first vertically integrated city transit system. This shift was officially announced on June 11th, 2024, with a new management team, board of directors, and a dedicated focus on creating a seamless and efficient urban transportation solution.
During Q2 2024, Argo generated revenue of $413,758, with a gross margin of 14.6%. The company strategically restructured its operations, significantly reducing its EV subscription business by 91% and simultaneously boosting its research and development (R&D) investment by a staggering 327% compared to Q2 2023. This shift reflects Argo’s commitment to developing its proprietary transit software and hardware solutions, anticipating high demand following their launch.
Argo also experienced a 103% year-over-year increase in revenue from its On-Demand Services, highlighting the continued growth of its last-mile delivery services, particularly its DAAS division, which caters to large retailers.
To optimize costs and streamline operations, Argo implemented strategic cost management initiatives that resulted in a 64% reduction in Sales & Marketing expenses and a 45% decrease in General & Administrative (G&A) expenses year-over-year. These measures included adjustments in customer acquisition costs, the phasing out of underperforming business units, and improved back-office efficiencies through technology. These efforts led to a 39% decrease in net loss quarter-over-quarter, setting the stage for profitable growth as Argo expands its new business units.
Since the beginning of the year, Argo has made significant changes. It restructured its business units, assembled a new and highly experienced board and management team, and attracted top technology talent from Silicon Valley to Canada, forming a core team dedicated to building Argo’s groundbreaking transit system. The company’s foundational technology solution is now poised for near-term deployment.
Earlier this month, Argo announced its ambitious plan to create the world’s first vertically integrated city transit system, fueled by partnerships with cities, transit agencies, and governments. The overarching goal is to improve access to and ridership of public transit, making it the most convenient mode of transport within and across cities while empowering people to control their mobility.
The company is gearing up for an initial launch within the Greater Toronto Area, offering first- and last-mile rides that connect commuters between their homes, workplaces, and train stations. Argo will also implement several programs for schools, showcasing its vehicle tracking and coordination technology, the user-friendliness of its app, and its commitment to collaborating with partners and city governments.
Argo’s portfolio also includes FoodsUp Developments, a leading restaurant supply platform in Canada. FoodsUp continues to demonstrate impressive growth and value, achieving $72.58 million in annual revenue in fiscal 2023. In Q2 2024, the company experienced a remarkable 72% year-over-year revenue growth, rising from $15.26 million to $26.2 million while expanding its active customer base by 24%, reaching 3,781.
Argo holds a 59.95% stake in FoodsUp and is exploring a strategic plan to divest a majority of its indirect equity interest to its shareholders. This move would allow shareholders to directly benefit from FoodsUp’s rapid expansion and growing market presence. While the divestment is not guaranteed, it presents a significant opportunity for shareholders to capitalize on the company’s ongoing success.
Argo’s Q2 2024 highlights include:
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Revenue Growth:
On-Demand Services revenue surged by 103% year-over-year due to the expansion of the DAAS business division.*
R&D Investment:
R&D investment increased by 327% year-over-year as the company developed its proprietary transit software and hardware solutions.*
Cost Optimization:
Strategic cost management initiatives and efficiency improvements led to a 64% decrease in Sales & Marketing expenses and a 45% reduction in G&A expenses.*
Asset Divestment:
Argo retains a 59.95% indirect equity interest in FoodsUp on its balance sheet. The company is committed to implementing a divestment of most of its FoodsUp equity interest to shareholders.Argo Corporation is poised to become a game-changer in the urban transportation landscape. Its innovative approach to city transit, coupled with its strong financial performance and strategic partnerships, positions the company for substantial growth and success in the coming years.
