Fisker Inc./DE (FSR)·Q2 2023 Earnings Summary

Executive Summary

• Q2 2023 marked Fisker’s first quarter with automotive sales revenue: $0.83M, EPS ($0.25), and reported gross margin of 7.5% (18.5% excluding early-stage investor deliveries); production was 1,022 units as the Ocean ramp began .
• Guidance was lowered for 2023 production to 20,000–23,000 units due to a short-term capacity constraint at a supplier; full-year gross margin target maintained at 8–12% .
• Liquidity was bolstered via $300M gross proceeds from 0% senior unsecured convertible notes (12% OID), with pro forma cash, cash equivalents, and restricted cash at $822M as of quarter-end; notes carry a $7.80 initial conversion price and allow additional closings up to ~$340M more over the AIR period .
• Stock reacted negatively intra-day following the release amid the cut to the 2023 production outlook and light revenue; shares traded down ~5.7% to $5.99 on Aug 4, 2023 .

What Went Well and What Went Wrong

What Went Well

• “Our second quarter marked an important milestone for Fisker as we started deliveries of our first Fisker Ocean vehicles to customers,” highlighting first revenue and initial positive gross margin on sold units .
• Ocean One/Extreme achieved EPA range of 360 miles, positioning as longest range in its class—a product attribute that can support pricing and demand .
• Expanded retail footprint (London, Oslo, Stockholm) and began deliveries in the US and Europe; assembly rate per day reached 140 by end of July, up from 80 at end of June, indicating operational learning-curve benefits .

What Went Wrong

• 2023 production guidance cut to 20,000–23,000 units due to a supplier short-term capacity constraint; this lowers volume expectations and revenue trajectory for the year .
• Revenue of $0.83M was well below Street expectations reported by external sources, reflecting limited Q2 deliveries (11 units) and logistics timing; the cadence caused a miss and raised near-term top-line uncertainty .
• Operating loss remained elevated at $87.9M in Q2; external reporting noted cash used in operating activities of ($128.1M), underscoring continued cash burn during ramp .

Financial Results

Consolidated P&L, EPS, Margins (USD)

Notes: “—” indicates not disclosed in cited sources for the period.

Balance Sheet & Cash Flow (Selected)

KPIs

Segment breakdown: not applicable.

Guidance Changes

Drivers: supplier capacity constraint for 2H ramp; liquidity actions to support growth (convertible notes, battery pack line) .

Earnings Call Themes & Trends

Management Commentary

• “Our second quarter marked an important milestone for Fisker as we started deliveries of our first Fisker Ocean vehicles to customers,” underscoring transition from pre-revenue to early commercialization .
• “Fisker updates 2023 production outlook to 20,000–23,000 units as a key supplier required additional time to ramp,” highlighting near-term constraints and realistic volume glide path .
• Liquidity plan: $300M convertible notes at 0% coupon (12% OID), $7.80 initial conversion, with potential additional tranches; proceeds to support battery pack line, working capital, capex, sales/marketing, future product development .

Q&A Highlights

• Analysts focused on delivery cadence, supplier ramp constraints, and the impact on 2H production/SG&A run-rate; management emphasized improving daily assembly rates and logistics optimization as deliveries accelerate .
• Clarifications on gross margin: initial 7.5% reported; excluding early-stage investor deliveries, 18.5%, with path to full-year 8–12% margin range as scale improves .
• Liquidity and capital structure questions addressed via the July notes offering, including additional closing mechanics and NYSE stockholder approval requirements for issuances above 19.99% .

Estimates Context

• S&P Global consensus estimates were unavailable due to mapping limitations in our data access; therefore direct S&P comparisons cannot be provided.
• External reporting indicated EPS of ($0.25) modestly beat consensus and revenue of $0.83M missed materially; because these are not S&P Global values and external sources differ on revenue consensus ($20–$34M reported), comparisons to Street should be treated as indicative only, not definitive .

Key Takeaways for Investors

• The Ocean ramp is underway with tangible production/deliveries and initial positive unit margins; scale and logistics will be critical to hitting 2H output plans and margin targets .
• The 2023 production guide-down (20–23k) resets expectations; watch supplier onboarding and daily assembly-rate trends as leading indicators of volume trajectory .
• Liquidity improved via 0% convertible notes; monitor dilution mechanics (conversion price, additional closings, NYSE exchange cap), as future tranches could further strengthen cash at the expense of equity .
• Near-term trading is likely driven by delivery cadence versus guidance, gross margin proof points, and any subsequent supply chain disclosures; negative initial stock reaction reflects skepticism on lowered FY volume .
• Medium-term thesis hinges on: (1) achieving 8–12% FY gross margin, (2) expanding global retail/delivery infrastructure, and (3) executing capital plan to sustain scaling without excessive dilution .
• Regulatory approvals (EPA/CARB) and product range leadership support price realization; as volumes normalize, margin and cash burn should improve, contingent on supply chain stability .
• Watch for updates on China delivery center and India homologation timelines as incremental demand catalysts and localization/scale opportunities into 2024 .