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Fisker Inc./DE (FSR)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 2023 was operationally mixed: revenue rose sharply sequentially to $200.1M, but GAAP gross margin was -35% and GAAP EPS loss widened to approximately $1.23; SPGI shows GAAP EPS at -$1.33, reflecting methodology differences and a large non‑cash fair value charge on 2025 notes .
  • Results missed S&P Global consensus materially: revenue $200.07M vs $310.79M and GAAP EPS -$1.33 vs -$0.13; surprise -35.6% on revenue .
  • Management pivoted from direct sales to a Dealer Partner model (13 signed; >250 inquiries) and guided to 20,000–22,000 unit sales in 2024 with ASPs of $56k–$62k, while announcing ~15% workforce reductions and “substantial doubt” language absent additional financing, a key stock reaction catalyst .
  • Liquidity actions included converting ~$237M of 2025 notes to equity (remaining principal ~$273M) and monetizing inventory (carrying value ~$530M); cash and restricted cash was $395.9M at year‑end .

What Went Well and What Went Wrong

What Went Well

  • Sequential execution: Q4 revenue increased by $128.3M versus Q3 to $200.1M, driven by deliveries rising to 3,818 units (from 1,097 in Q3) .
  • Strategic pivot gaining traction: “Fisker’s new Dealer Partner model is gaining momentum… 13 dealers have signed dealer agreements,” supporting brand awareness and sales in 2024 .
  • Liability management: “As of February 29, 2024, approximately $237 million of the 2025 notes outstanding have been converted to equity… reduced to $273 million,” improving capitalization .

What Went Wrong

  • Large miss vs consensus: SPGI shows Q4 revenue $200.07M vs $310.79M and GAAP EPS -$1.33 vs -$0.13 (driven partly by $328.5M non‑cash fair value adjustment on 2025 notes) .
  • Profitability and controls: GAAP gross margin -35%; management disclosed material weaknesses in revenue and related balance sheet accounts, and delayed 10‑K filing (12b‑25 extension) .
  • Going concern and NYSE notice: Company expressed “substantial doubt” about its ability to continue absent financing; received NYSE <$1 compliance notice on Feb 15, 2024, adding pressure to equity value .

Financial Results

P&L and Margins vs Prior Quarters

MetricQ2 2023Q3 2023Q4 2023
Revenue ($USD Millions)$0.825 $71.8 $200.1
GAAP EPS ($)-$0.25 -$0.27 -$1.23 (press) ; -$1.33 (SPGI)
GAAP Gross Margin (%)7.5% reported; 18.5% excl. early investor deliveries -17% GAAP; 9% adjusted -35%

Note: Q4 EPS difference reflects SPGI presentation vs company press release; management attributes a substantial portion of the net loss to the $328.5M non‑cash fair value adjustment on 2025 notes .

Q4 2023 Actual vs S&P Global Consensus

MetricConsensusActualSurprise
Revenue ($USD Millions)$310.79 $200.07 -35.63%
GAAP EPS ($)-$0.13 -$1.33 “NM” (not meaningful)

Production and Deliveries KPIs

KPIQ3 2023Q4 2023FY 2023
Production (units)4,725 4,789 10,193
Deliveries (units)1,097 3,818 4,929

Balance Sheet and Other KPIs (Q4 2023)

MetricQ4 2023
Cash & Restricted Cash ($M)$395.9
Inventory & Prepaid Raw Materials Carrying Value ($M)~$530
Deferred Revenue ($M)$44.6 (excluded from reported Q4 revenue)
2025 Notes Converted ($M)~$237 (to equity by 2/29/24)
2025 Notes Outstanding Principal ($M)~$273

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Unit Sales (combined direct + dealers)FY 2024N/A (new dealer model announced Jan 2024) 20,000–22,000 units Initiated
Average Selling Price (ASP)FY 2024N/A$56,000–$62,000 (after import duties & dealer commissions) Initiated
SG&AFY 2024N/A$200M–$230M Initiated
R&DFY 2024N/A$60M–$80M Initiated
CapExFY 2024N/A$60M–$80M Initiated
WorkforceNear-termN/AReduce ~15% New action

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2023)Current Period (Q4 2023)Trend
Sales model & distributionDirect-to-consumer ramp; customer locations opened; deliveries accelerated in Oct; pricing adjustments Pivot to Dealer Partner model; 13 dealers signed; >250 inquiries; expectation dealers boost awareness and volumes Strategic shift to dealer network
Production & deliveriesProduced 1,022 (Q2); 4,725 (Q3); deliveries 11 (Q2) → 1,097 (Q3); targeted ramp Produced 4,789; delivered 3,818 in Q4; inventory monetization in 1H24 Delivery acceleration; inventory conversion
Financial controls & filingsQ3 delay (CAO departure), material weaknesses disclosed Additional material weakness (revenue & related accounts); 10‑K delay (12b‑25) Controls remediation needed
Liquidity & financingRaised convertible notes (Q3); cash $625M at 9/30 Going concern language; note conversions; discussions with automaker and debt holder; cost actions Elevated financing risk; proactive actions
Technology & software/ADASOTA updates improving traction/regen/energy mgmt; NACS adoption Deferred revenue ($44.6M) tied to services and OTA updates incl. ADAS Ongoing software feature rollouts

Management Commentary

  • “Fisker’s new Dealer Partner model is gaining momentum and is expected to help improve brand awareness and sales throughout 2024.” (Press release) .
  • “We expect to sell between 20,000 and 22,000 units in 2024.” (Prepared remarks) .
  • “A substantial portion of the company’s net loss in the quarter reflects a non‑cash fair value adjustment associated with its 2025 senior convertible notes of $328.5 million.” (CFO) .
  • “We intend to reduce our workforce by approximately 15%… streamlining operations, including reducing our physical footprint and overall expenses.” (Prepared remarks) .

Q&A Highlights

  • Dealer model execution and brand awareness: Management emphasized dealers’ ability to order more cars than DTC channels and accelerate local brand building; near‑term priority is appointing dealers in key geographies .
  • Liquidity runway and financing options: Team discussed talks with a debt holder and a large automaker for potential investment/joint development; without financing, production and investments may need to be curtailed .
  • Operating expense trajectory: 2024 SG&A $200–$230M, R&D $60–$80M, CapEx $60–$80M as Ocean development largely complete and costs align with dealer transition .
  • Inventory monetization: Plan to generate cash from sale of completed 2023 production vehicles and consumption of raw materials in 1H 2024 .

Estimates Context

  • S&P Global consensus vs actual (Q4 2023): Revenue $310.79M vs $200.07M; GAAP EPS -$0.13 vs -$1.33; significant misses likely to drive downward estimate revisions for near‑term profitability and potentially lower 2024 revenue/units unless dealer model ramps quickly .
  • Additional sources corroborate the miss (consensus revenue ~$310.8M; EPS -$0.27 to -$0.17 range depending on source timing) underscoring breadth of the surprise .

Key Takeaways for Investors

  • Bolded misses and valuation risk: Q4 was a significant miss vs SPGI consensus on both revenue and EPS driven by negative margins and a large non‑cash notes fair value charge; expect estimate resets and heightened equity risk until financing clarity emerges .
  • Dealer model is the 2024 narrative: Execution pace of dealer signings and orders is the key operational catalyst; early traction (13 signed; >250 inquiries) is positive, but proof points on order volumes and throughput are critical in 1H 2024 .
  • Liquidity watch: Monitor progress on potential OEM partnership, additional investments, and inventory monetization; the going‑concern language and NYSE <$1 notice add urgency to capital actions and may drive tactical trading volatility around news flow .
  • Operational KPIs to track: Dealer order intake, monthly deliveries, ASPs relative to $56k–$62k guidance, gross margin trajectory with inventory conversion, and the cadence of OTA feature releases tied to deferred revenue recognition .
  • Cost discipline: SG&A/R&D/CapEx ranges imply a leaner plan; workforce reduction (~15%) and footprint rationalization should help cash conservation, but must be balanced against dealer onboarding and customer support needs .
  • Near‑term trading implications: Stock likely trades on financing headlines and dealer adoption updates; positive partnership or capital raise could re‑rate liquidity risk, while delays could pressure equity further. Medium‑term thesis hinges on dealer model validation and stabilized margins.

Other Relevant Q4 2023 Press Releases

  • Announces timing of Q4 & FY 2023 results/webcast (Feb 22, 2024) .
  • NYSE continued listing standard notice (Feb 16, 2024) .
  • Dealer partners signed in US (Feb 16, 2024) .

Prior Two Quarters’ Earnings (for trend)

  • Q3 2023: Revenue $71.8M; GAAP GM -17% (adjusted 9%); EPS -$0.27; production 4,725; deliveries 1,097; cash $625M at 9/30 .
  • Q2 2023: Revenue $0.825M; reported GM 7.5% (18.5% excl. early investor deliveries); EPS -$0.25; production 1,022; July production 1,009; calendar 2023 production outlook updated to 20k–23k .