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CI

Canoo Inc. (GOEV)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 delivered no GAAP revenue but continued cost discipline: Adjusted EBITDA improved to $(48.3)M (+$18.8M YoY; +$6.3M QoQ), and Adjusted EPS improved to $(1.13) vs $(1.73) in Q4 and $(3.96) YoY, while operating expenses fell materially YoY .
  • Guidance held: FY 2024 revenue $50–$100M and quarterly cash outflow $45–$75M were reiterated; CapEx guidance to be provided in future quarters (unchanged) .
  • Strategic execution progressed with USPS deliveries of right‑hand drive LDV 190, UK market introduction (award received), and initial commercial vehicle sales into Saudi Arabia, broadening the pipeline and opening non‑dilutive capital avenues .
  • Near‑term stock catalysts: USPS operational proof points, UK fleet traction, Saudi agreements, and clarity on supply chain harmonization and capital pacing to support a 20,000 vehicles/year run‑rate target by year‑end (management target, not formal guidance) .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA improved 28% YoY to $(48.3)M and 11.5% QoQ, driven by R&D and SG&A reductions and capital efficiency; Adjusted EPS improved to $(1.13) (vs $(1.73) in Q4, $(3.96) YoY) .
  • Strategic wins: USPS deliveries (RHD LDV 190 on routes), UK debut with “The One To Watch” award and engagements with top fleet operators (~1M units represented), and entry into Saudi Arabia with commercial vehicle sales agreements and pilots .
  • Capital optimization: Acquisition of deeply discounted new/like‑new manufacturing assets (often 80%+ discounts) and FTZ designation in OKC, targeting up to $70M of vehicle cost savings/duty deferrals in 2024–2025 .

What Went Wrong

  • Supply chain alignment and capital pacing remained gating factors to reach operational goals and run‑rate; management highlighted slower activity early in the year and the need to finalize capital requirements .
  • Q1 revenue printed at $0 despite deliveries and pilots, with negative GAAP net loss of $(110.7)M; gross margin metrics were not reported due to no revenue recognition in the quarter .
  • Balance sheet constraints: Cash, cash equivalents, and restricted cash ended at $18.2M (pro forma $34.7M including preferred proceeds), keeping dependence on financing and non‑dilutive sources elevated near‑term .

Financial Results

MetricQ1 2023Q4 2023Q1 2024
Revenue ($USD Millions)$0.00 $0.37 $0.00
GAAP Net Loss ($USD Millions)$(90.73) $(28.45) $(110.69)
GAAP EPS ($USD)$(4.99) $(0.04) $(2.20)
Loss from Operations (EBIT) ($USD Millions)$(81.53) $(63.96) $(62.65)
Total Operating Expenses ($USD Millions)$81.53 $62.85 $62.65
Adjusted EBITDA ($USD Millions)$(67.12) $(54.59) $(48.30)
Adjusted Net Loss ($USD Millions)$(71.99) $(56.58) $(57.32)
Adjusted EPS ($USD)$(3.96) $(1.73) $(1.13)
Net Cash Used in Operating Activities ($USD Millions)$(67.22) $(59.70) $(47.52)
Cash And Equivalents (End of Period) ($USD Millions)$6.72 $6.39 $3.66
Total Cash, Cash Equivalents, and Restricted Cash ($USD Millions)$21.04 $20.90 $18.24

KPIs and Expense Mix

KPIQ1 2023Q4 2023Q1 2024
R&D (excl. depreciation) ($USD Millions)$47.10 $31.54 $26.39
SG&A (excl. depreciation) ($USD Millions)$29.85 $28.10 $32.87
Depreciation ($USD Millions)$4.58 $3.21 $3.39
Vehicles Completed (Units)n/a17 (Q4 2023; 22 FY 2023) n/a

Notes:

  • Management reported SG&A excluding stock‑based compensation at $22.5M in Q1 (vs $23.1M Q4), reflecting internal mix shifts; table shows SG&A excluding depreciation per GAAP statements .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Annual Revenue ($USD)FY 2024$50M–$100M $50M–$100M Maintained
Cash Outflow per Quarter ($USD)FY 2024$45M–$75M $45M–$75M Maintained
Capital ExpendituresFY 2024Guidance to be provided in future quarters Guidance to be provided in future quarters Maintained
Operational Run‑Rate Target (vehicles/year)YE 202420,000 target (management commentary) 20,000 target reiterated Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
Supply chain alignmentEmphasized step‑level manufacturing; target 20k capacity; manual + semi‑auto processes to avoid front‑loading CapEx Focus on harmonizing/optimizing supply chain before scaling; “four key elements” to get right Still a “long pole”: aligning supply chain remains gating factor to run‑rate Improving slowly
Capital access/pacingRaised ~$250M YTD through Q3; milestone‑based funding discipline FY 2023 raised $285M; pursuing DOE/gov’t support; non‑dilutive forms Capital pacing remains constraint; exploring non‑dilutive/state incentives; pro forma cash $34.7M with Series C Stable
Right‑hand drive/UK expansionn/aPlanning RHD deployments; seven‑state rollout map for service USPS RHD deliveries; UK tour with award and top fleets (~1M units represented) Positive momentum
Saudi Arabia/KSA growthn/aPreparing intl expansion; FTZ supports export/import Initial sales agreements (e.g., Jazeera Paints) and pilot with Red Sea Global; KSA TAM ~$30B Positive momentum
Manufacturing asset purchasesOpportunistic asset buys to reduce CapEx 35% ($48M) CapEx reduction vs initial 2023 plan; new/like‑new assets Continued purchases at 80%+ discounts; six‑fold increase since Q4 in assets bought Positive momentum
Non‑China supply chain (tariffs)n/an/aAsserted no reliance on Chinese batteries; tariff changes supportive; focus on allied/domestic sources Risk reduced
Revenue ramp cadenceFirst revenue in Q3; low volumes begin FY 2024 revenue guided $50–$100M; cadence back‑half weighted Q1 printed $0 revenue; management affirmed revenue recognition for certain deliveries but cadence secondary to run‑rate and quality Gradual ramp

Management Commentary

  • “We are proud that our LDV190 vehicles have been delivered to the USPS... and are already delivering mail... enabled by our steer‑by‑wire proprietary technology” — Tony Aquila .
  • “We are increasing our step‑level manufacturing to reach a run rate of 20,000 vehicles by year‑end and to harmonize our supply chains” — Tony Aquila .
  • “We continue to purchase new and like‑new manufacturing assets to close the gap... purchased at discounted price of over 80%” — Ramesh Murthy .
  • “Our previously issued guidance remains unchanged” — Q1 press release .
  • “We’ve never been reliant on Chinese batteries... focused on core allied nations and domestic manufacturing” — Tony Aquila .

Q&A Highlights

  • Supply chain and capital remain gating factors; had capital been in place 2 months earlier, progress would be more accelerated; asset purchases at $0.10–$0.20 on the dollar materially lower BOM costs .
  • USPS program cadence and multi‑year agreements: management prioritizes measured ramp to meet quality/economics; expects allocation among large customers due to near‑term constraints .
  • KSA opportunity: initial orders and capital partnerships; KSA Vision 2030 supports eco‑friendly mobility; UK adoption tailwinds cited .
  • Tariffs on batteries/parts: asserted strategic insulation from China supply chain; sees tariff regime as moat vs subsidized imports .
  • Revenue recognition: management indicated certain deliveries generate revenue, but Q1 GAAP revenue printed at $0; focus on building durable business over reporting short‑term revenue .

Estimates Context

  • S&P Global/Capital IQ consensus estimates for GOEV were unavailable due to missing CIQ mapping in our data retrieval (GetEstimates error). As a result, we cannot present comparisons versus Wall Street consensus this quarter. We will anchor to S&P Global once mapping availability is restored (no estimates presented).

Key Takeaways for Investors

  • Execution over optics: Management is prioritizing supply chain harmonization and capital pacing to achieve a 20,000 vehicles/year run‑rate, even at the expense of near‑term revenue prints — monitor updates on supplier alignment and equipment integration .
  • Cost discipline is working: Adjusted EBITDA and cash burn improved YoY/QoQ, aided by R&D and SG&A reductions and distressed asset purchases; watch for further opex mix shifts and CapEx avoidance benefits (FTZ savings potential up to $70M in 2024–2025) .
  • Commercial/government focus de‑risks demand: USPS deployments, UK right‑hand drive fleets, and Saudi agreements broaden a high‑credit customer base with multi‑year volume potential — a constructive setup for non‑dilutive financing and deposits .
  • Near‑term catalysts: USPS performance data, UK fleet conversions and orders, KSA pilot progression to broader sales, plus clarity on investor day disclosures and funding developments .
  • Watch revenue cadence vs quality: Management will under‑promise on quarterly units to protect margins/quality; expect gradual ramp through 2024 and potential back‑half skew .
  • Risks: Low cash base, dependence on external financing, and supply chain bottlenecks remain; any slippage in harmonization or capital timing could push out run‑rate targets .
  • Medium‑term thesis: If Canoo sustains cost advantages (asset buys, FTZ) and converts government/commercial pilots to multi‑year deliveries, margin breakeven in mid‑teens thousand units (historically cited) becomes plausible; monitor order conversions and unit economics disclosures .