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AYRO, Inc. (AYRO)·Q4 2022 Earnings Summary

Executive Summary

  • AYRO executed a strategic transition in Q4 2022: revenue primarily reflected the residual sell-through of legacy Club Car Current units while the company advanced the AYRO Vanish toward homologation and initial production; management cautioned near-term revenue could dip until Vanish production commences .
  • Operating discipline improved materially: total OpEx declined nearly $11M year over year in 2022 and cash/marketable securities ended FY22 at ~$49M with no debt, implying a >2-year runway at current spend levels .
  • Guidance/narrative update: homologation for Vanish expected to complete “sometime in June” (12-week process), LRIP targeted by end of June, and appreciable sales likely to begin in 3Q23; dealer interest is robust with >50 dealers in discussions and the first authorized dealer announced .
  • Strategic catalysts: re-shored supply chain (no longer relying on Cenntro, Karma, or Club Car exclusivity), in-house manufacturing in Round Rock, TX, and common core chassis roadmap supporting multiple future vehicles (Valet, Vapor) .
  • Wall Street consensus estimates via S&P Global were unavailable for AYRO in our dataset; as a result, estimate comparisons could not be performed (S&P Global data unavailable for this ticker in our tools).

What Went Well and What Went Wrong

What Went Well

  • Significant cost control: “nearly $11 million decline in total OpEx in 2022 over 2021,” driven by R&D cuts and lower G&A, improving net loss by ~$10M YoY .
  • Strong liquidity: “Cash and marketable securities at the end of 2022 were approximately $49 million, implying a cash runway that exceeds two years at current spending levels” .
  • Strategic repositioning: “We no longer rely on Cenntro or any other suppliers from China… We no longer rely on Karma… nor on Club Car for exclusive distribution,” which should enable in-house manufacturing and higher margins at scale .

What Went Wrong

  • Near-term revenue softness: Q4 revenue came from legacy product sell-through and management warned revenue may decline in the next two quarters until Vanish production ramps .
  • Prior supply chain issues impaired revenue/margins in 2H22: defective components from Cenntro led to a sequential revenue drop to ~$373K in Q3 and gross losses, highlighting the need to re-shore the supply chain .
  • Listing risk: management addressed NASDAQ minimum bid rule concerns and noted ongoing engagement with NASDAQ; recovery strategy centers on delivering Vanish sales .

Financial Results

Quarterly P&L Snapshot (oldest → newest)

MetricQ2 2022Q3 2022Q4 2022
Revenue ($USD)$981,560 $373,186 n/a (quarter not broken out in press release; FY provided)
Gross Profit ($USD)-$1,845,952 -$581,817 n/a (quarter not broken out; FY provided)
Total Operating Expenses ($USD)$4,125,723 $5,222,414 n/a (quarter not broken out; FY provided)
Net Loss ($USD)-$5,974,448 -$5,681,574 n/a (quarter not broken out; FY provided)
Net Loss per Share ($USD)-$0.16 -$0.15 n/a (quarter not broken out; FY provided)

Notes:

  • AYRO furnished FY 2022 financials in the Q4 press release/8-K but did not disclose Q4-only breakouts; commentary indicates Q4 revenue was legacy product runoff .

Liquidity and Capital Structure (period-end)

MetricQ2 2022 (6/30)Q3 2022 (9/30)Q4 2022 (12/31)
Cash ($USD)$40,890,769 $39,428,850 $39,096,562
Marketable Securities ($USD)$17,970,906 $15,790,595 $9,848,804
Total Debt ($USD)$0 $0 $0

FY 2022 Highlights

MetricFY 2021FY 2022
Revenue ($USD)$2,683,597 $2,990,497
Net Loss ($USD)-$33,079,414 -$22,935,353
Net Loss per Share ($USD)-$0.94 -$0.62
Adjusted EBITDA ($USD)-$24,993,236 -$18,456,696
Total Operating Expenses ($USD)$31,037,683 $20,223,897

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Homologation completion (Vanish)Mid-2023Prototype unveiled Q4 2022; homologation implied post-unveil 12-week homologation; “exit homologation sometime in June” Clarified timeline; targeted June completion
LRIP start (Vanish)Mid-2023First article production targeted in Q1 2023 LRIP “by the end of June” Pushed later into late Q2
Initial Vanish sales2023Small unit shipments anticipated after first articles Appreciable sales likely in 3Q23; initial sales small until 2H23 More explicit: ramp skewed to 2H23
Dealer program2023Building channels (Element, Gallery, GSA later in 2023) First authorized dealer announced; >50 dealer negotiations underway Expanded detail on channel readiness
Cash burn/OpExNear termExpense rationalization ongoing Quarterly cash burn expected in similar range as prior 3–4 quarters Maintained discipline expectation

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2022)Trend
Supply chain re-shoring92% defined; ~85% NA sourcing; move away from Cenntro/Karma; in-house manufacturing in Round Rock “No longer rely on Cenntro… Karma… Club Car exclusivity”; majority sourced from North America Re-shoring completed; execution focus
Homologation timelinePrototype unveil in Q4 2022; post-unveil homologation implied 12 weeks; target exit in June Firm timetable; near-term catalyst
Production ramp (LRIP)First article production Q1 2023 targeted LRIP by end of June; initial sales small until 2H23 Shifted later; clearer ramp path
Dealer/GSA channelsElement, Gallery, GSA partner approach; four-branch go-to-market First authorized dealer; >50 dealer negotiations; GSA via partners Execution progress; pipeline building
PricingChassis ASP noted at $24,750 (Q3 Q&A) Vanish chassis MSRP “about $34,000”; payloads ~$1,000–$5,000 Pricing reset upward; premium positioning
Liquidity/runwayCash/marketable securities $58.9M (Q2); $55.2M (Q3); no debt ~$49M; cash runway >2 years Stable; supports ramp

Management Commentary

  • “We no longer rely on Cenntro or any other suppliers from China… nor on Karma Automotive… nor on Club Car for exclusive distribution. Instead, we have an entirely new supply chain… and we’re developing in-house manufacturing capability… allowing us to control our own destiny… and enjoy higher margins per vehicle at scale.”
  • “Homologation… is generally a 12-week process, and we believe that we will successfully exit… sometime in June… Following homologation, we expect to enter LRIP… by the end of June… appreciable sales of the Vanish likely will begin in the third quarter of 2023.”
  • “Our team has done a great job of managing total operating expenses, as evidenced by a nearly $11 million decline in total OpEx in 2022 over 2021… Cash and marketable securities at the end of 2022 were approximately $49 million, implying a cash runway that exceeds two years…”
  • “The MSRP of the Vanish chassis is anticipated to be about $34,000, while we intend to sell its interchangeable payloads for roughly $1,000 to $5,000 each.”
  • “We have already announced our first authorized dealer… and are in various stages of negotiation with more than 50 additional dealers in the US and Canada…”

Q&A Highlights

  • Homologation applicability: All future models (Valet, Vapor) will follow platform-specific homologation; process expected to be consistent and faster with experience .
  • Demand and use cases: Strong interest in fleet refresh cycles (resort, golf, marina) with Vanish’s expected longevity improving economics; dealer interest consistent with expectations .
  • GSA strategy: AYRO will leverage partners already on the GSA schedule to add the Vanish; direct schedule listing deferred until production launch .
  • Inventory composition: CFO confirmed bulk of inventory at year-end relates to Vanish build-up for LRIP; minimal holdover of legacy Current .
  • NASDAQ compliance: Ongoing engagement with NASDAQ on minimum bid requirement; management aims to cure through execution on Vanish sales .

Estimates Context

  • Wall Street consensus estimates via S&P Global for AYRO’s Q4 2022 revenue and EPS were unavailable in our dataset; therefore, a beat/miss analysis versus consensus could not be performed (S&P Global data unavailable for this ticker in our tools).

Key Takeaways for Investors

  • Near-term revenue likely soft until Vanish production ramps; appreciable Vanish sales targeted for 3Q23 after homologation and LRIP complete in late June .
  • Cost discipline is real: FY22 OpEx fell by ~$10.8M YoY and adjusted EBITDA loss improved by ~$6.5M YoY, setting a leaner base for the ramp phase .
  • Liquidity supports execution: ~$49M cash/marketable securities and zero debt provide >2-year runway to navigate homologation and scale manufacturing .
  • Strategic de-risking: Re-shored supply chain and in-house assembly reduce exposure to prior quality issues (e.g., defective Cenntro components that impaired Q3) and should lift margins at scale .
  • Pricing reset underscores premium strategy: Vanish chassis at ~$34K with modular payloads aligns with targeted enterprise/fleet refresh economics; monitor margin progression as volumes scale .
  • Channel build-out is progressing: first authorized dealer signed; >50 dealers under discussion; expect GSA access via partners—key for public sector demand .
  • Catalyst roadmap: homologation completion (June), LRIP start (end-June), dealer placements, and initial deliveries—each milestone should update the narrative and could drive stock reaction if execution is timely .

Appendix: Prior Quarter Reference Points

  • Q2 2022: Revenue ~$982K; gross loss ~$1.846M; OpEx ~$4.126M; net loss ~$6.0M; cash $40.9M; marketable securities $18.0M; no debt .
  • Q3 2022: Revenue ~$373K; gross loss ~$0.582M; OpEx ~$5.222M; net loss ~$5.682M; cash $39.4M; marketable securities $15.8M; no debt .
  • FY 2022: Revenue ~$3.0M (+11% YoY); net loss ~$22.9M vs. ~$33.1M in 2021; adjusted EBITDA loss ~$18.46M vs. ~$24.99M in 2021; cash $39.1M; marketable securities $9.85M; no debt .