Singapore-based used-car marketplace Carro narrowed its losses in the year ended March 2025, even as rising costs weighed on margins.
According to regulatory filings, the SoftBank-backed company reported a loss before tax of S$18.6 million ($14.31 million) for FY2025, down 29.1% from S$26.3 million in the previous financial year, according to its latest financial filings.
Net loss narrowed 21.7% year-on-year to S$22.9 million, reflecting improved operational efficiency despite higher employee and operating expenses.
Carro’s revenue in the year rose 14.9% to S$1.2 billion ($920 million), driven by continued strength in vehicle sales and financial services across operations. However, gross profit fell 16.8% to S$124.1 million as the cost of sales climbed, pushing its gross profit margin down to 10.3% from 14.2% a year earlier.
Employee benefits expenses rose 23.6% to S$99.3 million, while other operating expenses also jumped 23.2% to S$55.3 million, partly due to integration costs from its Hong Kong acquisitions during the period.
The earnings improvement comes as Carro prepares for a potential IPO in 2026, with founder and CEO Aaron Tan saying at DealStreetAsia’s Asia PE-VC Summit 2025 that profitability remains a priority before listing.
The company, last valued at over $1 billion, raised $60 million in September 2025 from the Cool Japan Fund. The investment will help Carro expand its platform to promote Japanese cars across Asia and highlight Japanese automotive technologies such as hybrid and fuel cell systems.
Carro’s total assets grew 5.4% to S$1.32 billion at the end of March 2025, while total liabilities rose 10.4% to S$783.3 million. The firm’s borrowings surged during the period, with drawdowns rising 158.6% to S$236.2 million from S$91.4 million a year earlier.
The increase, alongside only modest equity growth, pushed the company’s debt-to-equity ratio higher to 1.45x from 1.30x, underscoring a greater reliance on leverage to finance expansion and acquisitions.
Meanwhile, net cash used in investing activities surged 74% to S$57.5 million, mainly due to higher spending on property, plant, and equipment, as well as new acquisitions. The company’s cash balance fell 11.1% to S$115.6 million by the end of March 2025.
In April 2024, Carro acquired Hong Kong-based Beyond for HK$13.3 million (S$2.3 million), a move expected to strengthen its regional digital ecosystem.
Despite narrowing losses, Carro’s net profit margin remained negative at -1.9%, though it improved from -2.8% in the prior year. Return on assets and equity also showed slight recovery, suggesting incremental gains in operational efficiency.
In the DealStreetAsia PE-VC Summit two months ago, Tan said the past few funding cycles have underscored a shift in priorities: from chasing scale to focusing on the quality of revenue.
