Canoo Inc. (GOEV) Q3 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals several challenges for Canoo, including workforce furloughs, supply chain disruptions, and financial instability due to capital raising difficulties. Despite revenue growth and cost reductions, the company faces significant risks, such as regulatory issues and economic pressures. The Q&A section highlights management's uncertainty about financing and production timelines, further compounding negative sentiment. While there are positive aspects like revenue growth and cost savings, these are overshadowed by the broader concerns, leading to a likely negative stock price reaction in the short term.
Key Financial Performance
Revenue $891,000 in Q3 2024, highest revenue quarter, with a year-over-year increase due to higher margin engineering service revenues.
Adjusted EBITDA Negative $37.7 million in Q3 2024, a $2.6 million improvement (6.5%) from negative $40.4 million in Q3 2023.
Research and Development Expenses $18.8 million in Q3 2024, a 12% reduction from $21.3 million in Q3 2023, driven by substantial completion of product development.
SG&A Expenses $19.6 million in Q3 2024, an increase from $18.6 million in Q3 2023, reflecting ongoing operational costs.
Cash Position $16.1 million in cash, cash equivalents, and restricted cash at the end of Q3 2024.
Net Cash from Financing Activities $26.3 million in Q3 2024, a 65.7% decrease from $76.7 million in Q3 2023.
Cash Used in Operations $26.5 million in Q3 2024, down from $35.9 million in Q3 2023.
Cash Outflow from Investing Activities $2.8 million in Q3 2024, compared to $11.5 million in Q3 2023.
Adjusted Net Loss per Share Negative $2.14 for the nine months ended September 30, 2024, a 74.3% improvement from negative $8.34 for the same period in 2023.
Adjusted Net Loss per Share (Quarterly) Negative $0.54 in Q3 2024, an 11.5% improvement from negative $0.61 in Q2 2024.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New Product Development: Achieved Individual Vehicle Approval (IVA) for two pilot vehicles within three months, with a 2% Bill of Materials (BOM) change from existing platforms.
Right-Hand Drive Vehicles: Built right-hand drive vehicles for the U.K. postal service, with over 15,000 delivery miles completed.
Market Expansion: Established a legal entity in the U.K. and launched commercial operations, focusing on fleet customers.
Government Incentives: U.K. government incentives include a £5,000 maximum plug-in grant for large fleets and £120 million allocated for the automotive sector.
Workforce Reduction: Furloughed 23% of workforce in Oklahoma City, impacting 30 employees.
Facility Consolidation: Consolidating operations from six facilities to three in Texas and Oklahoma, aiming for annualized savings of $12 million to $14 million.
Production Capacity: Targeting production of three jobs per day by Q4 2025, with potential to ramp up to multiple jobs per hour in 2026.
Strategic Shift: Pivoted focus from consumer vehicles to commercial, government, and fleet customers, refunding consumer vehicle deposits.
Capital Raising Strategy: Secured $28 million in capital this quarter and established a $12 million credit facility.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Economic Factors: The automotive industry is facing challenges including inflation, interest rates, and supply chain disruptions, which contribute to volatility in the market.
Supply Chain Challenges: The company is struggling to navigate capital markets to align with its manufacturing plan and is working on harmonizing its supply chain.
Workforce Management: Canoo made the difficult decision to furlough 23% of its workforce in Oklahoma City, which poses a risk to operational efficiency and employee morale.
Regulatory Issues: The transition to electric vehicles (EVs) is a political debate, particularly concerning rare earth materials, which could impact the company's operations.
Competitive Pressures: The company is focusing on high credit grade customers and has decided to refund consumer vehicle deposits, indicating a shift in strategy due to competitive pressures.
Capital Raising: Canoo is actively seeking capital to meet operational needs and is exploring various financing options, including government programs and non-dilutive capital.
Production Capabilities: The company is behind its production timeline and needs to align capital and supply chain to ramp up manufacturing capabilities.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Footprint Consolidation: Consolidating facilities from six to three locations: Justin, Texas, Oklahoma City, and Pryor, Oklahoma.
Focus on Fleet Market: Shifting focus to commercial, government, and fleet customers, refunding consumer vehicle deposits.
International Expansion: Established a legal entity in the U.K. and launched commercial operations, focusing on government-backed incentives.
Supply Chain Harmonization: Created a share pool for suppliers and established partnerships to enhance supply chain efficiency.
Production Capabilities: Plans to ramp up production to three jobs per day by Q4 2025 and multiple jobs per hour by 2026.
Revenue Expectations: Reported highest revenue quarter at $891,000 in Q3 2024.
Cost Savings: Expected annualized savings of $12 million to $14 million from consolidation efforts.
Future Cash Outflows: Anticipated cash outflow between $30 million to $40 million in the coming quarter due to consolidation.
Capital Raising: Raised $28 million in capital this quarter and secured a $12 million credit facility.
Production Timeline: Expect to achieve production capabilities of 10 jobs per hour by future modifications to the paint shop.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Capital Raising Efforts: Canoo raised $28 million in capital during Q3 2024 and secured a $12 million credit facility.
Supplier Share Pool: Canoo established a share pool for supplier partners as part of their supply chain partnership harmonization.
Non-Dilutive Capital: Canoo is focused on raising non-dilutive capital and has received a letter of encouragement from U.S. government programs.
Cost Discipline: The company is implementing cost discipline measures, including a footprint consolidation expected to save $12 million to $14 million annually.
Furloughs: Canoo furloughed 23% of its workforce in Oklahoma City as part of its restructuring efforts.
Future Production Plans: By Q4 2025, Canoo aims to achieve three jobs per day, increasing to multiple jobs per hour in 2026.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What are the financing options in front of you?
A:We received a letter of encouragement from some U.S. government programs. We're working on capital raising transactions, using our ATM efficiently, and have a revolving line of credit. We're also in discussions with Tier 1 banks for purchase order financing and have created a share pool for suppliers.
Q:How should we think about production capabilities and production timelines?
A:We are behind plan but expect to reach three jobs per day by Q4 2025 and multiple jobs per hour in 2026. We have access to a paint shop that will help us increase production capabilities.
Q:Can you talk about right-hand drive units and vehicles for the U.K. postal service?
A:We have built a right-hand drive vehicle and have completed over 15,000 delivery miles with it. However, we do not comment on customer pilots or activities.
Q:Can you clarify on the working capital line that you've put in place?
A:It's a 12-month facility, not a 90-day one. The earlier comments referred to bridge loans until the independent Board approved the credit facility.
Q:Did you mention progress on governmental program loans?
A:We received our first letter of encouragement for accessing non-dilutive capital, which is a positive sign. We've applied for multiple programs but only received one letter.
Q:Review of Unclear Management Responses
A:Management appeared to avoid giving a direct answer regarding specific timelines for production capabilities and the details of governmental program loans, using vague language about the unpredictability of government funding.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Administrative Officer
California
Canoo
Chief Administrative
Justin Texas
Kunal Chief
UK
administration
agency
capital need
consolidation
consumer
country
credit facility
decision
delivery mile
demand
drive vehicle
effort
hand drive
improvement
job hour
letter encouragement
mandate
manufacturing plan
month period
option
paint shop
pilot
program
role Chief
share
state
step level
support
tenant
type
GOEV Transcript
Canoo Inc. (GOEV) Q3 2024 Earnings Call Transcript
Unknown11-14
The earnings call reveals several challenges for Canoo, including workforce furloughs, supply chain disruptions, and financial instability due to capital raising difficulties. Despite revenue growth and cost reductions, the company faces significant risks, such as regulatory issues and economic pressures. The Q&A section highlights management's uncertainty about financing and production timelines, further compounding negative sentiment. While there are positive aspects like revenue growth and cost savings, these are overshadowed by the broader concerns, leading to a likely negative stock price reaction in the short term.
Canoo, Inc. (GOEV) Q2 2024 Earnings Call Transcript
Positive8-14
The earnings call highlights significant improvements in financial metrics, including revenue growth and reductions in expenses and losses. The strategic focus on commercial fleet and government markets, along with the successful delivery to USPS and expansion into Saudi Arabia, is promising. Despite some supply chain and financing risks, the company's proactive measures and the establishment of a foreign trade zone are positive. The Q&A reflects a constructive dialogue with analysts, although some answers lacked clarity. Overall, the positive financial performance and strategic initiatives suggest a potential stock price increase in the short term.
Canoo Inc. (GOEV) Q1 2024 Earnings Call Transcript
Unknown5-15
The earnings call presents a mixed picture: improved financial metrics and operational efficiencies, but weak guidance and lack of specifics on key partnerships (USPS, Walmart). The Q&A reveals optimism but also highlights capital constraints and supply chain challenges. No concrete timelines or milestones were provided, and management's evasive responses may concern investors. While there are positive elements like reduced losses and strategic opportunities (Saudi Arabia), the lack of strong guidance or partnership details tempers the sentiment, leading to a neutral outlook.
Canoo Inc. (GOEV) Q3 2023 Earnings Call Transcript
Positive11-15
The earnings call highlights significant improvements in cost management and operational efficiency, evidenced by reduced SG&A expenses, narrowed net losses, and improved EBITDA. The Q&A section reveals confidence in achieving production targets without altering timelines due to reduced CapEx, and potential partnerships with strategic investors offer growth opportunities. Despite some uncertainties in management's responses, the overall sentiment leans positive, supported by improved financial metrics and strategic plans. However, the lack of market cap data prevents a more precise prediction.
GOEV Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
