Nikola Corporation (NKLA) Q4 2023 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary reflects significant challenges: high losses, a costly recall, and unresolved component constraints. Despite some positive developments like reduced cash burn and potential growth in hydrogen trucks, the overall financial health remains weak. The Q&A section highlights uncertainties in production and market expansion. The absence of clear guidance on margins and future markets further dampens sentiment. Given these factors, the stock price is likely to experience a negative reaction in the short term.
Key Financial Performance
Unrestricted Cash Position $464.7 million, an increase of $102 million from Q3 2023, the highest since Q4 2021.
Cash Use $129.9 million in Q4 2023, below the target of $140 million, with an average of $85 million per quarter in the second half of 2023 compared to $130 million in the first half.
Net Truck Revenue (Q4 2023) $12.5 million from 35 hydrogen fuel cell electric trucks sold, with an average selling price (ASP) of $351,000, impacted by lower-priced legacy deals.
Net Revenue (Q4 2023) $10.4 million, including a reversal of some revenue from dealer cancellations and repurchase of BEV inventory.
Gross Loss (Q4 2023) Approximately $38.2 million, resulting in a negative gross margin of 332%, due to low production volume and high costs.
Total Operating Expenses (Q4 2023) $89.6 million, including $10.4 million of losses on supplier deposits and $6.5 million of stock-based compensation.
Net Loss from Continuing Operations (2023) $864.6 million, with a non-GAAP loss of $631.3 million.
CapEx (2023) $120.5 million, primarily for manufacturing footprint and line reconfiguration.
Gross Loss (2023) $214.1 million, due to the battery electric truck recall, including a reserve of $65.8 million for estimated recall costs.
Net Interest Expense (2023) $76 million, including a one-time, non-cash expense of $41.2 million related to convertible notes.
Total Operating Expenses (2023) $435.8 million, including $75.4 million of stock-based compensation.
Cash Burn Rate (2024) Expected to reduce to less than $70 million per quarter by year-end.
Expected Total Truck Revenue (2024) Between $150 million to $170 million.
Expected Operating Expenses (2024) Between $280 million to $300 million, including $30 million of stock-based compensation.
Expected CapEx (2024) $60 million to $70 million, focused on HYLA modular refueling infrastructure and supplier tooling.
Expected Gross Margin (2024) In the range of negative 100% to negative 80%.
Cash Use (Q4 2023) $129.9 million, below the target of $140 million.
Average Selling Price (ASP) (Q4 2023) $351,000, driven down by lower-priced legacy deals.
Cash Margin (Q4 2023) Negative 129% cash margin per hydrogen fuel cell electric truck.
Accruals and D&A (Q4 2023) $459,000 per truck, contributing to a gross margin loss of negative 260%.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Hydrogen Fuel Cell Electric Trucks: Built 42 hydrogen fuel cell electric trucks in Q4 2023, sold 35, with 7 reserved for testing and demos.
Battery Electric Trucks (BEV 2.0): BEV trucks being retrofitted with new battery packs and enhancements, expected to return to end users by late Q2 or early Q3 2024.
HVIP Vouchers: Nikola holds 99% of HVIP voucher requests in California for hydrogen fuel cell trucks, with 355 out of 360 requests.
Market Positioning: Nikola is focusing on regions with strong demand, such as California and Canada, for hydrogen fuel cell trucks.
Cash Position: Unrestricted cash balance increased to $464.7 million, the highest since Q4 2021.
Operational Efficiency: Cash use reduced by approximately 35% in 2023, with a target to decrease to less than $70 million per quarter by year-end 2024.
Strategic Partnerships: Collaboration with First Element Fuel for hydrogen refueling stations, expanding infrastructure in California.
Board Expansion: New board members with extensive experience in trucking and energy sectors added to enhance strategic direction.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Supplier Constraints: Nikola faced supplier part constraints that limited the number of trucks they could sell, indicating potential risks in production scalability.
Regulatory Risks: The company is heavily reliant on HVIP vouchers in California, which could be subject to regulatory changes that may impact demand.
Production Costs: High variable and fixed costs associated with production led to significant gross losses, indicating financial risks if production volumes do not increase.
Cash Burn Rate: Despite improvements, the company still has a high cash burn rate, which poses a risk to liquidity if not managed effectively.
Market Competition: The competitive landscape in the EV market is challenging, with Nikola needing to maintain its first-mover advantage against other OEMs.
Economic Factors: Economic conditions affecting supply chains and consumer demand could impact Nikola's ability to meet its production and sales targets.
Interest Expense: Elevated interest expenses due to convertible notes could strain financial resources, impacting overall profitability.
Operational Delays: Delays in ramping up new components from suppliers could hinder the company's ability to meet delivery targets for hydrogen fuel cell electric trucks.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Production of Hydrogen Fuel Cell Electric Trucks: In Q4, Nikola built 42 hydrogen fuel cell electric trucks, delivering 35 and reserving 7 for testing and demos. The company sold every truck available for shipment, indicating strong demand.
HVIP Vouchers: Nikola has a 99% share of HVIP voucher requests in California, with 355 out of 360 requests for their hydrogen fuel cell trucks, showcasing their market leadership.
Battery Electric Truck Remediation: The company is on track to return the first battery electric trucks to customers by the end of Q1 2024, with all trucks expected back by late Q2 or early Q3.
HYLA Hydrogen Infrastructure: Nikola opened its first modular hydrogen fueling station in Ontario, California, and plans to secure six additional sites in 2024.
Board of Directors Expansion: Nikola added experienced leaders to its Board, enhancing its expertise in trucking, manufacturing, and energy.
2024 Hydrogen Fuel Cell Electric Truck Deliveries: Guidance for 2024 is 300 to 350 hydrogen fuel cell electric trucks, with potential upside if supply constraints ease.
Total Truck Revenue for 2024: Expected to be between $150 million to $170 million.
Operating Expenses for 2024: Expected to be in the range of $280 million to $300 million, including $30 million of stock-based compensation.
CapEx for 2024: Expected to be $60 million to $70 million, primarily for HYLA infrastructure and supplier tooling.
Q1 2024 Deliveries and Revenue: Expected to deliver 30 to 35 hydrogen fuel cell electric trucks, generating revenues between $12 million and $14 million.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Unrestricted Cash Position: $464.7 million at the end of Q4 2023, the highest since Q4 2021.
Cash Use Reduction: Cash use averaged $85 million per quarter in the second half of 2023, down from $130 million in the first half.
Expected CapEx for 2024: $60 million to $70 million, primarily for HYLA modular refueling infrastructure and supplier tooling.
Total Truck Revenue Guidance for 2024: Expected to be between $150 million to $170 million.
Hydrogen Revenue Guidance for 2024: Expected to be in the range of $10 million to $12 million.
Operating Expenses Guidance for 2024: Expected to be in the range of $280 million to $300 million.
Expected Deliveries of Hydrogen Fuel Cell Electric Trucks in 2024: Guided for 300 to 350 trucks.
Expected Deliveries of Battery Electric Trucks in 2024: At least 100 trucks, starting after the recall trucks are returned.
Gross Margin Guidance for 2024: Expected to be in the range of negative 100% to negative 80%.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Are you getting requests from dealers to have inventory and is there a point where you'll be able to fulfill that?
A:We are still filling customer demand right now. We have customers attached to every order. At some point, dealers will have a demo vehicle or something like that, but I think it's going to be a while before they'll be able to actually physically stock trucks.
Q:Have you resolved the component constraints that held back production?
A:I would say on the truck side, they're starting to resolve and on the fueling side, they're actually also starting to resolve with the truck side resolving a little faster.
Q:Do you have plans for your next market outside of the Arizona California corridor?
A:We need to have fish where the fish are. Right now the incentives are best in California and in Canada. There's a big move with all those trucks to go to zero emission. We want to be in a position to supply them.
Q:Can you talk more about the opportunity at the ports?
A:The ports are huge. We're attacking those markets. That's where most of our fuelers are going. We think it's an enormous opportunity for us.
Q:How do you think the buying pattern of fleets or customers compares to full electric trucks?
A:We sold 10 trucks to two different fleets and five trucks to one. One of the people who bought 10 trucks wants 40 more.
Q:Is the cost of getting the battery electric trucks back out into customer hands showing up only in the cash flow statement?
A:Most of the cash impact will be in Q1 and Q2.
Q:Is the only revenue generated from the sale of the vehicle or are there other revenues related to fuel or maintenance?
A:There is some small energy revenue in that number. We said $10 million to $12 million this year.
Q:Will you have to raise capital again before the end of the year?
A:We have the highest cash, unrestricted cash we've had in two years. We actually have more cash than that burn.
Q:Are the 100 trucks largely already in inventory and just need the battery pack up?
A:Yes, we had about 150 trucks in Nikola inventory.
Q:Are you still on a path to mid-single-digit growth in fueling stations?
A:I think we're on target. We have line of sight on six modular sites in the south and other three in the north.
Q:What is the update on the previously indicated EBITDA positive target for 2025?
A:We aspire to do that by year end. Once we do that, it's about accelerating volume and dropping more cash to cover the fixed costs.
Q:Can you comment on the gross margin post the 100 units of deliveries?
A:We do expect a positive cash contribution on those trucks this year.
Q:What are your plans for 2024?
A:2024 is about execution, scaling our business and optimizing revenue and costs.
Q:How does Nikola differentiate itself from competitors?
A:The biggest difference is our hydrogen fuel cell electric truck is available to customers right now.
Q:What happened with the Badger program?
A:The Badger program was always predicated on an OEM partnership. After Mr. Milton's departure, Nikola did not pursue the Badger program.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific timeline for resolving component constraints and the exact details on the gross margin profile post-deliveries.
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
California Canada
Class
Dhillon
Element
Ember
HVIP voucher
Ontario
Southern California
accrual
asset
battery pack
cash contribution
cash use
cell electric
component
contribution margin
depreciation
electric truck
experience
feature
field
interest
inventory truck
line sight
loss supplier
port
production volume
recall
release
request
spend
stock compensation
supplier deposit
unit basis
user
volume cash
NKLA Transcript
Nikola Corporation (NKLA) Q3 2024 Earnings Call Transcript
Unknown10-31
The earnings call reflects several negative factors: a gross loss increase, competitive pressures, regulatory and supply chain challenges, and a declining cash position. The Q&A reveals management's evasiveness on profitability specifics and capital needs. Despite a slight revenue increase, the financial health and guidance remain weak, with no new partnerships or positive catalysts mentioned. These factors suggest a negative stock price movement over the next two weeks.
Nikola Corporation (NKLA) Q2 2024 Earnings Call Transcript
Neutral8-9
Nikola Corporation (NKLA) Q1 2024 Earnings Call Transcript
Unknown5-7
Nikola's earnings call presents a mixed picture: while they exceeded revenue and delivery guidance, they continue to face significant challenges such as high gross losses, cash burn, and profitability hurdles. The Q&A reveals concerns over potential dilution from a reverse stock split and unclear guidance on margins. However, there are positives like improved ASPs and strategic expansions in hydrogen infrastructure. The lack of clear guidance and profitability roadmap, coupled with the market's potential reaction to a reverse split, suggests a neutral stock price movement in the near term.
Nikola Corporation (NKLA) Q4 2023 Earnings Call Transcript
Unknown2-22
The earnings call summary reflects significant challenges: high losses, a costly recall, and unresolved component constraints. Despite some positive developments like reduced cash burn and potential growth in hydrogen trucks, the overall financial health remains weak. The Q&A section highlights uncertainties in production and market expansion. The absence of clear guidance on margins and future markets further dampens sentiment. Given these factors, the stock price is likely to experience a negative reaction in the short term.
NKLA 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.
