March 2024 Quarterly Activities Report

Carly Holdings Limited (ASX:CL8) is pleased to present its consolidated cash flow report and business update for the quarter ended 31 March 2024.

Carly has continued to deliver on its business objectives, achieving strong growth in active subscribers, revenue and fleet size, both YoY and QoQ, while reducing net cash used. Compared to March 2023 Quarter, Subscription Revenue increased by 58% to $893,000, Customer Receipts increased by 53% to $1,400,000 and total fleet size increased by 73% to 451 vehicles (as at 31 March 2024), supported by growth in both the owned and asset light fleets.

Key highlights include:

• 58% increase in Subscription Revenue vs March 2023 Quarter
• 53% increase in Customer Receipts vs March 2023 Quarter
• 29% reduction in Net Cash Used compared to December 2023 Quarter, despite growing vehicle fleet and increasing scale
• 34% decrease in Product Manufacturing and Operating Costs vs December 2023 Quarter
• 12% decrease in Advertising and Marketing Costs vs December 2023 Quarter
• Fleet size increased by 73% vs March 2023 Quarter and 20% vs December 2023 Quarter with74 vehicles added in the March 2024 Quarter. Growth was consistent across both owned and asset light fleets in the March 2024 Quarter, with owned vehicles representing 69% of total fleet size.
• Launch of EV Trial and EV Trial for Business to meet the need for individuals and businesses to experience electric vehicles before committing to a purchase

In the March 2024 Quarter, Carly continued to achieve strong growth in demand supported by increasing vehicle fleet size. In March 2024, Carly launched EV Trial www.evtrial.com.au a simple and cost-effective way for car buyers to try an EV before they buy, to understand if an electric vehicle is suitable for their lifestyle. The trial also offers the opportunity to decide which EV model best fits their individual circumstances. EV Trial for Business is also available for fleets looking to transition to electric vehicles.

EV Trial is unique in the Australian market and addresses a large concern for many car buyers who are interested in transitioning to electric vehicles but are fearful of making a poorly informed purchase decision. Significant media coverage was received for the launch from both consumer, business and investment press.

In support of EV Trial and general subscription demand from individuals and fleets, Carly commenced purchasing electric vehicles in December 2023. Carly was cautious about purchasing electric vehicles beforehand due to concerns about high retail prices and depreciation risk, concerns which were well placed given significant fleet valuation and profitability issues encountered by rental and subscription firms that entered the EV market prior to 2023. Carly can now purchase quality electric vehicles with 5 star ANCAP rating and 7 year warranty for under $40,000. Based on our unique insights and data, we expect that these vehicles will be of significant interest to both consumers and businesses.

Prior to December 2023, Carly was already active in the electric vehicle market via the asset light model and its strong relationship with Hyundai, which has continued to expand. The launch of EV Trial has increased interest from automotive brands seeking to expose their vehicle models to potential purchasers with Cupra and Genesis brands added to the EV asset light fleet in the March 2024 Quarter. As of 17 April 2024 there are 58 EVs in the Carly fleet, 47% owned and 53% asset light.

Corporate demand continued to expand in the March 2024 Quarter with a number of agreements reached with businesses seeking vehicles for their own requirements or for their contractors and staff. To meet the increasing corporate demand, medium and large SUVs are being purchased for the fleet.

Fleet size growth accelerated in the March 2024 Quarter, with 20% growth vs December 2023 Quarter compared to 73% growth in the 12 months to March 2024. The growth was broad based across asset heavy and asset light fleets with 20% and 22% growth respectively. Asset heavy vehicles made up 69% of the fleet as at 31 March 2024 (consistent with 31 December 2023). With the majority of vehicles being delivered in the latter part of the March 2024 Quarter, these vehicles will have a more impactful contribution to revenue in the June 2024 Quarter. As foreshadowed in previous updates, asset light vehicle supply is improving and Carly expects to continue to increase the number of asset light vehicles as vehicle owners, including automotive manufacturers and dealers, seek to capitalise on Carly’s unique revenue generating opportunities including car subscription, CarlyNow in-dealer subscription tool and EV Trial.

Significant reductions were achieved in Net Cash Used, Product Manufacturing and Operating Costs, Advertising and Marketing Expenses and Administration & Corporate Costs compared to the December 2023 Quarter, despite 16% increase in Cash Receipts and 20% fleet growth. There was an increase in Staff Costs vs December 2023 Quarter, however $123,000 related to historical Director Fees (previously expensed, but not settled in cash) and timing differences associated with employee incentives. On an adjusted basis, underlying Staff Costs were down 7% vs December 2023 Quarter and 2% higher vs March 2023 Quarter. Staff Costs are expected to reduce to normal levels for the June 2024 Quarter.

Corporate

Payments to related parties and their associates in the March 2024 Quarter of $249,000 related to remuneration of the executive and non-executive directors for the period, of which $123,000 related to prior periods.

Cash Balance at Quarter End and Funding

At the end of the March 2024 Quarter, the Company maintained a cash balance of $2,544,000, a decrease of $572,000 from the December 2023 Quarter.