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01/10 17:10
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Workhorse shows positive momentum with increased revenue, reduced net loss, and strategic partnerships. Despite not providing specific revenue guidance, the expansion into Canada and partnership with Gateway Fleets are promising. The Q&A session highlighted growth opportunities, sufficient financing, and plans to enhance the product portfolio. The positive sentiment from analysts, coupled with improved financial metrics and strategic growth plans, suggests a positive stock price movement over the next two weeks.
Truck Shipments In Q2 2025, Workhorse shipped 32 trucks, a significant increase from 1 truck in Q2 2024. This increase of 31 trucks year-over-year was driven by customer demand for the W56 step van.
Sales (Net of Returns and Allowances) Sales for Q2 2025 were $5.7 million, compared to $800,000 in Q2 2024, marking a $4.8 million increase. This was due to higher W56 shipments, partially offset by the loss of revenue from the Aero divestiture and higher W4 CC sales in the prior year.
Cost of Sales Cost of sales for Q2 2025 was $13.1 million, up $5.8 million from $7.3 million in Q2 2024. The increase was driven by higher sales volume, a $1.8 million increase in inventory excess and obsolescence reserves, partially offset by lower production expenses and labor costs.
Selling, General and Administrative (SG&A) Expenses SG&A expenses for Q2 2025 were $5.8 million, a decrease of $6.3 million from $12.1 million in Q2 2024. The decrease was primarily due to lower employee compensation, legal and professional expenses, IT-related expenses, corporate insurance, and depreciation and amortization expenses.
Research and Development (R&D) Expenses R&D expenses for Q2 2025 were $1.2 million, down $700,000 from $2 million in Q2 2024. The decrease was driven by lower employee compensation, prototype part expenses, and rent expenses.
Net Loss Net loss for the first half of 2025 improved to $35.4 million from $55.5 million in the first half of 2024. Excluding interest and fair value adjustments, the net loss from operations improved from $44.2 million to $27.3 million.
Revenue (First Half Comparison) Revenue for the first half of 2025 was $6.3 million, up $4.1 million from $2.2 million in the first half of 2024. This increase was primarily due to higher deliveries of W56 trucks.
Operating Expenses (First Half Comparison) Operating expenses for the first half of 2025 were down $16.3 million year-over-year, driven by reductions in employee compensation, consulting-related expenses, legal and professional expenses, insurance, IT-related expenses, and depreciation and amortization expenses.
W56 step vans: Secured 36 purchase orders and shipped a record 32 trucks in Q2 2025. Over 60 vehicles are currently operating in customer and partner fleets. Final durability testing on the 140-kilowatt design with a range of 100 miles is complete, with production slated for early 2026. Development of the Utilimaster Aeromaster walk-in van body on the W56 chassis is now available for order.
Market expansion through Motiv merger: The merger with Motiv will create a leading North American medium-duty electric truck OEM. The combined company will have a broader product portfolio, including Class 4 through 6 trucks, and access to a $23 billion medium-duty truck segment. The merger also strengthens relationships with top fleet customers like Purolator, FedEx, and Aramark.
Operational efficiencies: Operating expenses decreased by $7 million year-over-year while achieving record vehicle shipments. SG&A expenses decreased by $6.3 million in Q2 2025 compared to the prior year. Research and development expenses decreased by $700,000 year-over-year.
Strategic merger with Motiv: The merger aims to create a stronger financial position, simplify the capital structure, and achieve at least $20 million in synergies by 2026. The combined company will focus on cost parity with internal combustion vehicles and long-term value for customers.
Delayed Fleet Customer Adoption: Factors outside of the company's control, such as shifting political landscapes and changing government regulations and incentives, have led to delayed fleet customer adoption rates, impacting revenue growth.
Liquidity and Financial Position: The company has limited cash and cash equivalents ($2.2 million) and is relying on sale-leaseback and convertible note financing to support operations, which may pose risks to financial stability.
Debt Obligations: The company has significant debt obligations, including $39.5 million in 2024 notes, which require repayment or conversion, adding financial strain.
Market Competition: The company faces competition from both pure-play electric and legacy OEMs, which could impact its ability to capture market share.
Supply Chain and Cost Management: The company is exposed to risks related to cost management, including inventory excess and obsolescence reserves, which increased by $1.8 million in the quarter.
Strategic Execution Risks: The success of the merger with Motiv and the ability to achieve projected synergies of $20 million by 2026 depend on effective integration and execution, which carries inherent risks.
Customer Concentration: The company relies on a limited number of large fleet customers, which could pose risks if these customers delay or reduce orders.
Regulatory and Incentive Risks: Changes in government regulations and incentives could further impact the adoption of medium-duty electric trucks, affecting the company's growth trajectory.
Future production plans: Final durability testing on the 140-kilowatt design with a range of 100 miles has been completed, and production is slated to begin in early 2026.
Product portfolio expansion: Development and integration efforts are underway to install the Utilimaster Aeromaster walk-in van body on the W56 chassis, which is now available for order.
Merger with Motiv: The transaction with Motiv is expected to close in Q4 2025, creating a leading North American medium-duty electric truck OEM. The combined company will have a broader product portfolio, stronger financial position, and enhanced market competitiveness.
Financial strategy: The combined company will seek additional financing to support strategic execution plans in 2026 and beyond, including up to $20 million in debt financing at the close of the transaction.
Market outlook: The medium-duty truck segment, valued at $23 billion, is expected to see continued electrification in the coming years, driven by national-scale commercial fleets.
Cost synergies: The merger is projected to achieve at least $20 million in cost synergies by the end of 2026.
Customer base and sales strategy: The combined company will leverage a strong and complementary customer base, including 10 of the largest medium-duty fleets in North America, and will integrate Motiv's direct sales approach with Workhorse's national dealer network.
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The earnings call highlights several challenges: decreased sales revenue, increased cost of sales, and dependence on incentives. Despite positive aspects like improved net loss and cash position, uncertainties around the Motiv merger and supply chain risks persist. Q&A insights show ongoing cost concerns and reliance on incentives. These factors, combined with the challenging market for electric vehicles, suggest a negative sentiment, likely leading to a stock price decrease of -2% to -8% over the next two weeks.
Workhorse shows positive momentum with increased revenue, reduced net loss, and strategic partnerships. Despite not providing specific revenue guidance, the expansion into Canada and partnership with Gateway Fleets are promising. The Q&A session highlighted growth opportunities, sufficient financing, and plans to enhance the product portfolio. The positive sentiment from analysts, coupled with improved financial metrics and strategic growth plans, suggests a positive stock price movement over the next two weeks.
The earnings call shows positive trends in financial performance and product development, with increased revenue, improved margins, and strong demand for the W56. However, the lack of specific revenue guidance and potential risks in market demand and execution balance these positives. The absence of a share repurchase program and ongoing uncertainties in the EV market further suggest a cautious outlook. The Q&A section did not reveal significant new insights to alter this assessment. Overall, these factors suggest a neutral stock price movement over the next two weeks.
The earnings call presents a mixed but overall negative outlook. The partnership with Gateway Fleets and expansion into Canada are positive, but the lack of revenue guidance and customer demand shifts pose significant risks. Financial discipline is evident, but declining sales and increased interest expenses are concerning. The reverse stock split and funding actions indicate financial instability. The Q&A section does not provide additional clarity. Overall, the negative factors outweigh the positives, leading to a likely stock price decline between -2% and -8% over the next two weeks.
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