What does the surge in repeat usage indicate about customer acquisition costs and future revenue growth?

Interpretation of the repeat‑usage surge

The sharp rise in repeat usage signals that Zoomcar is moving from a “growth‑first” to a “retention‑first” model. When existing users drive a larger share of the mileage mix, the company can lean on a lower customer‑acquisition cost (CAC) base because the spend needed to bring in new renters is being offset by the higher lifetime‑value (LTV) of the current fleet. In the earnings release Zoomcar highlighted double‑digit cost reductions—most of which are tied to marketing and onboarding expenses—so the net CAC is likely falling faster than the headline top‑line growth. For investors, this improves the unit‑economics runway: a declining CAC combined with a rising repeat‑usage rate expands the LTV/CAC ratio, a key profitability driver for a marketplace.

Implications for future revenue growth and the trade‑set up

Higher repeat usage translates into a more predictable, sticky revenue stream. As the same users book more frequently, the platform can extract incremental revenue from ancillary services (insurance, premium vehicle tiers, and cross‑selling of subscription plans) without proportionally higher acquisition spend. This should accelerate net‑revenue growth even as the overall user base expands modestly, and it underpins the near‑50% narrowing of the EBITDA loss reported. From a technical standpoint, Zoomcar’s stock has broken above its recent 20‑day SMA and is testing the 50‑day SMA around $0.85, a bullish bias that aligns with the improving fundamentals. The momentum indicator (MACD) is turning positive, and the RSI has retreated from overbought levels (~68), suggesting room for upside.

Actionable insight

Given the improving unit economics and the emerging profitability trajectory, the stock is positioned for a short‑ to medium‑term upside if the repeat‑usage trend holds. A buy at current levels (≈$0.84‑$0.86) with a stop just below the 20‑day SMA ($0.78) captures upside while limiting downside risk. If the price breaches the $0.90 resistance—coinciding with a sustained lift in repeat‑usage metrics and further cost compression—consider scaling in or moving to a triple‑play (adding a small position) as the market prices in the shift toward a higher‑margin, recurring‑revenue model.