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Fisker Inc./DE (FSR)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 was Fisker’s first quarter with meaningful automotive revenue: $71.8M; GAAP gross margin was -17% and adjusted gross margin was 9%; diluted EPS was ($0.27). Production reached 4,725 units and deliveries were 1,097, with October deliveries exceeding Q3 volume (>1,200) .
  • Full-year 2023 production guidance was cut again to 13,000–17,000 units, down from 20,000–23,000 in Q2 and 32,000–36,000 in Q1, citing logistics and delivery network constraints despite stable production capacity .
  • Balance sheet bolstered by convertible notes; quarter-end cash and restricted cash totaled ~$625.4M (cash $527.4M + restricted $98.0M). Company also expanded access to capital (additional potential $550M) and adopted NACS with Tesla Supercharger access in North America .
  • Stock fell >10% after-hours on 11/13/23 as reported media estimates indicated wider-than-expected losses and revenue miss; note S&P Global consensus estimates were unavailable for formal comparison .

What Went Well and What Went Wrong

What Went Well

  • Production and delivery ramp: 4,725 vehicles produced and 1,097 delivered in Q3; over 1,200 delivered in October, exceeding Q3 delivery volume .
  • Global rollout progress: Deliveries now in 10 countries, with additional markets targeted; flagship lounges opened in Los Angeles and New York City to support customer experience .
  • CEO tone on scaling deliveries: “We are rapidly scaling our delivery infrastructure to support even higher volumes… more units in October than in all of Q3.” — Henrik Fisker .

What Went Wrong

  • Delivery/logistics bottlenecks constrained revenue conversion; management acknowledged customers “are really getting annoyed,” and shifted focus to delivery infrastructure overhaul .
  • Guidance reset: Annual production cut to 13–17k units to align deliveries/logistics with supply chain and homologation realities; prior guide of 20–23k (Q2) and 32–36k (Q1) proved overly optimistic .
  • Margin headwinds: GAAP gross margin -17% due to inventory valuation adjustment amid ramp; adjusted gross margin 9% indicates underlying margin potential but highlights sensitivity to scale/operations .

Financial Results

MetricQ1 2023Q2 2023Q3 2023
Revenue ($USD Millions)n/a (not disclosed) $0.825 $71.8
Diluted EPS ($USD)($0.38) ($0.25) ($0.27)
Gross Margin % (GAAP)n/a 7.5% -17%
Adjusted Gross Margin %n/a 18.5% (excl. early investor vehicles) 9% (excl. inventory valuation adjustment)
Loss from Operations ($USD Millions)$121.6 $87.9 $103.8 (10‑Q) / $99.6 (PR)
Net Loss ($USD Millions)$120.6 $85.5 $95.2 (10‑Q) / $91.0 (PR)

Notes: Q3 PR and 10‑Q show slight differences in loss from operations and net loss; use 10‑Q for GAAP comparison and PR for preliminary/communications context .

KPIQ1 2023Q2 2023Q3 2023
Vehicles Produced (units)n/a (production launch occurred in Nov-2022; initial deliveries began May 2023) 1,022 4,725
Vehicles Delivered (units)n/a (US deliveries commenced after EPA approvals later in Q2) 11 (Ocean One initial deliveries) 1,097; October >1,200
Cash & Cash Equivalents ($USD Millions)$652.5 $521.8 $527.4 cash + $98.0 restricted = $625.4 total

Year-over-year context (Q3 YoY): Revenue $71.8M vs $14k; net loss improved to ~$95.2M from ~$149.3M; SG&A and R&D shifts reflect production transition .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Vehicle Production (units)FY 202332,000–36,000 (Q1 guide) 20,000–23,000 (Q2 guide) → 13,000–17,000 (Q3 update) Lowered (twice)
Pricing (US)CY 2024 ordersPrior trims announced 2020–2021Extreme $61,499; Ultra $52,999; Sport $38,999 Adjusted
Non‑GAAP OpEx + CapEx ($MM)FY 2023$535–$610 (Q1 reaffirm) R&D $160–$190; SG&A $180–$210; CapEx $225–$240; Total $565–$640 Raised (range widened upward)
Charging StandardStarting 2025CCSAdopt NACS; Tesla Supercharger access in U.S./Canada Strategic change

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Deliveries & LogisticsQ1: Dual-homologation; deliveries to start post‑EPA; target steep Q3 ramp; Q2: initial deliveries; assembly/day improved; suppliers ramp challenges Management shifting focus to ramp deliveries; acknowledged customer frustration; production stable; updated FY guide to 13–17k Improving logistics, but delivery bottlenecks persist
Supply Chain & HomologationQ2: supplier capacity constraints; Q2 production lowered to 20–23k; Q1: homologation steps detailed One supplier required financial assistance; focus on process readiness and supplier software maturity Stabilizing production; supplier/software maturity still critical
Pricing & ProductQ1/Q2: Ocean launch; EPA approvals; Vision Day Trim pricing adjustments; opened CY24 orders; continuing OTA improvements Pricing recalibration; OTA enhancing customer experience
Capital & LiquidityQ1: $652.5M cash; ATM sales; Q2: $300M notes; $521.8M cash $625.4M cash+restricted; raised $150M; up to $550M additional available via convertible notes Liquidity strengthened; dilution risk from convertibles
Charging StrategyEarly partnerships (ChargePoint, Allego, Deftpower) Adopt NACS; Tesla Supercharger access announced Positive customer experience tailwind

Management Commentary

  • “We are rapidly scaling our delivery infrastructure to support even higher volumes… We are gaining momentum and delivered more units in the month of October than in all of the third quarter.” — Henrik Fisker, CEO .
  • “As we work to scale our outbound logistics operations and we optimize our delivery and service network, we are updating our production guidance for 2023 to a range of 13,000 units to 17,000 units.” — Earnings call remarks .
  • “People have paid and awaiting for the cars and some of them are really getting annoyed… we have to focus on ramping deliveries.” — CEO, acknowledging delivery challenges and customer pressure .

Q&A Highlights

  • Delivery bottlenecks: Analysts probed the pace of deliveries relative to production; management detailed overhaul of delivery/service infrastructure and near-term improvements (October run-rate exceeded Q3 deliveries) .
  • Guidance recalibration: Clarified rationale for 13–17k production guide to align delivery/logistics scaling and avoid inventory build; emphasis on prudent approach .
  • Margin trajectory: Addressed GAAP vs adjusted gross margin; inventory valuation impacts expected to diminish as ramp progresses .
  • Capital flexibility: Discussed convertible notes structure and additional capacity to support working capital and program acceleration .

Estimates Context

  • S&P Global consensus estimates were unavailable (ticker mapping issue) for formal comparison in Q3, Q2, and Q1. As a result, we cannot anchor beats/misses to S&P Global consensus for this period.
  • Media-reported estimates indicated revenue and EPS misses: CNBC cited a Q3 EPS expectation of ($0.19) vs actual ($0.27) and revenue expectation ~$$109M vs $71.8M actual, contributing to >10% after-hours stock decline on 11/13/23 .
  • Implication: Street models likely need downward revisions on 2023 volume, delivery cadence, and revenue conversion timing given the guide cut and logistics constraints .

Key Takeaways for Investors

  • Delivery infrastructure is the near-term bottleneck; production appears stable, but revenue realization depends on resolving last‑mile logistics and service coverage — watch delivery run-rates and regional expansion pace in Q4 .
  • Guidance credibility reset: Two consecutive cuts (to 13–17k) signal a more conservative posture; future guide updates should be evaluated against delivery capacity build-out and supplier/software maturity .
  • Margins are highly sensitive to scale and ramp inefficiencies (inventory valuation effects); adjusted gross margin of 9% suggests underlying path to positive unit economics as delivery/logistics normalize .
  • Liquidity strengthened via convertible notes (additional potential $550M), but monitor dilution risk and covenant mechanics; quarter-end cash+restricted ~$625.4M supports operations through ramp .
  • Strategic tailwinds: NACS adoption and Tesla Supercharger access could enhance customer experience and demand conversion in North America, improving delivery throughput once logistics scale .
  • Short-term trading: Expect volatility tied to delivery prints and any further guide changes; media estimates point to perceived misses, but formal S&P Global consensus was unavailable — focus on operational KPIs (deliveries per month, geographic rollout) .
  • Medium-term thesis: If delivery infrastructure scales to match production and OTA/software stabilizes, revenue/margin trajectory can inflect; execution on logistics and customer support is the critical catalyst going into 2024 .

Additional source documents and context:

  • Q3 2023 8‑K (Item 2.02; Exhibit 99 press release reference) .
  • Q3 2023 10‑Q MD&A (YoY comps, cash/restricted cash, supplier commentary) .
  • Q2 2023 press release (revenue, EPS, margins, production guide) .
  • Q1 2023 press release (cash, EPS, operations) .
  • Capital raises: 0% senior convertible notes (Sept 29, 2023; additional $550M potential) .