Executive Summary

Canoo entered its manufacturing and revenue-generation phase, recording first revenue of $0.519M in Q3 2023 and delivering initial vehicles to the State of Oklahoma under an agreement for up to 1,000 units .
Guidance materially improved for 2H23: Adjusted EBITDA from negative $120–$140M to negative $85–$105M (less negative), and CapEx cut from $70–$100M to $30–$40M; full-year Adjusted EBITDA guided to negative $210–$235M .
Operational execution advanced: ladder frame and battery lines commissioned; EPA permit granted for OKC facility; general assembly system on track to a 20,000-unit run rate by Q1 2024; management targets breakeven around 14,000–16,000 units .
Cost discipline improved: Adjusted EBITDA narrowed to negative $40.4M and adjusted net loss to negative $46.1M; both substantially better vs prior year .
Potential stock reaction catalysts: visible deliveries (Oklahoma, NASA), order book strength ($3B+ Stage 2/3), 67,000+ reservations, and guidance improvement versus prior expectations .

What Went Well and What Went Wrong

What Went Well

Initiated revenue generation and deliveries: “Delivering first units to state of Oklahoma as part of up to 1,000-unit agreement” and Q3 revenue of $0.519M from vehicles and DoD/DIU milestones .
Manufacturing milestones: ladder frame and battery module systems commissioned; EPA permit granted; GA system on track to 20,000-unit run rate by Q1 2024 .
Cost optimization: Adjusted EBITDA improved to negative $40.4M (from negative $80.8M YoY); SG&A and R&D cut ~49% and ~61% YoY; management cited supplier deal renegotiations, labor arbitrage and disciplined CapEx pacing .
- Quote: “Our relentless focus and discipline of expense management…allow us to improve our negative adjusted EBITDA guidance” .

What Went Wrong

Cash remains constrained: cash and equivalents were $8.3M at quarter-end (pro forma $53.3M including October preferred/warrants) .
Negative gross margin driven by custom initial deliveries/logistics and LCNRV adjustment (~$366k); Q3 gross loss of $384k .
Continued GAAP net loss: Q3 GAAP net loss of $(112.0)M, with sizable non-cash fair value impacts (e.g., $(69.6)M loss on fair value change in convertible debt) complicating optics of progress .

Financial Results

Metric	Q1 2023	Q2 2023	Q3 2023
Revenue ($USD Thousands)	$0	$0	$519
Gross Profit ($USD Thousands)	$0	$0	$(384)
GAAP Net Loss ($USD Millions)	$(90.7)	$(70.9)	$(112.0)
GAAP EPS ($USD)	$(0.22)	$(0.14)	$(0.18)
Adjusted EBITDA ($USD Millions)	$(67.1)	$(62.3)	$(40.4)
Adjusted Net Loss ($USD Millions)	$(72.0)	$(69.1)	$(46.1)
Adjusted EPS ($USD)	$(0.17)	$(0.14)	$(0.07)
R&D Expense ($USD Millions)	$47.1	$38.6	$22.0
SG&A Expense ($USD Millions)	$29.8	$30.4	$24.9
Cash & Equivalents at Period End ($USD Millions)	$6.7	$5.0	$8.3
CapEx (Period YTD, $USD Millions)	$18.4	$33.9	$45.4

KPIs

KPI	Q1 2023	Q2 2023	Q3 2023
Order Book (Stage 2/3)	5% QoQ growth in Stage 2/3 orders	Fortune 100 national fleet agreement closed	$3B+ Stage 2/3 orders; 67,000+ reservations; strong product acceptance
Manufacturing Run-Rate Milestones	Target exit-2023 20k; pathway to 40k in 2024	Achieved 20k run rate: battery line (Pryor) & robotics/assembly (OKC)	Commissioned ladder frame & battery lines; GA system tracking to 20k run rate in Q1 2024
Regulatory/Permits	IRA $7,500 commercial tax credit eligibility (LDV)	Compliance for FMVSS/CARB completed (LDV)	EPA permit granted (OKC)
Pilot/Testing Miles	—	—	>10,000 industrial/commercial-use miles in testing; 150+ days in extreme heat
Workforce/Oklahoma	—	Cherokee Nation workforce program; $113M OK incentives contracted	Expect 20–25% of company to be Oklahoma-based by end of Q4 2023

YoY context for Q3: GAAP net loss improved to $(112.0)M vs $(117.7)M in Q3 2022; Adjusted EBITDA improved to negative $40.4M vs negative $80.8M; Adjusted EPS improved to $(0.07) vs $(0.31) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($USD Millions)	2H 2023	negative $120 to negative $140	negative $85 to negative $105	Raised (less negative)
Capital Expenditures ($USD Millions)	2H 2023	$70 to $100	$30 to $40	Lowered
Adjusted EBITDA ($USD Millions)	FY 2023	—	negative $210 to negative $235	Introduced
Operating Expenses ex SBC & D&A ($USD Millions)	Q2 2023	$40 to $60	—	Prior-quarter guidance (context)

Management attributed guidance improvement to supplier renegotiations, labor mix shift to Oklahoma, and phased ramp CapEx efficiency (utilizing low-volume tools and opportunistic equipment purchases) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1/Q2)	Current Period (Q3)	Trend
Manufacturing Ramp & Capacity	Target exit-2023 20k run-rate; pathway to 40k in 2024 . Achieved 20k run rate on battery and robotics/assembly lines .	GA system tracking to 20k run rate in Q1 2024; commissioned ladder frame & battery systems; breakeven at ~14k–16k units .	Improving
Capital & Funding	Raised >$150M; secured OKC lease . Cash $5.0M; debentures/PIPE; 2H guidance issued .	~$250M YTD capital; $45M strategic convertible preferred (Oct); deposits expected; improved 2H guidance .	Improving cost discipline
Customer Pipeline & Orders	5% QoQ growth in Stage 2/3 orders .	$3B+ Stage 2/3 orders; 67k+ reservations; delivered NASA CTVs; first Oklahoma deliveries .	Expanding
Regulatory/Legal	LDV eligible for $7,500 IRA commercial tax credit .	EPA permit granted (OKC); SEC matter settled (Q2) .	De-risking
Supply Chain & Costs	Hybrid manufacturing strategy to support 20k run rate .	Supplier deal renegotiations; labor arbitrage; phased CapEx; BOM and process efficiency .	Improving
Technology/AI	—	AI used in training/repair/assembly methods to democratize scaling .	Emerging

Management Commentary

“We are now in our manufacturing and revenue-generation phase… We continue to move toward our goal of achieving 20,000 annual unit capacity.” — Tony Aquila .
“Sales during the quarter were generated from vehicle deliveries but also from revenue from the DoD’s Defense Innovation Unit contract and services… $3 billion-plus order book across both Stage 2 and 3 orders, over 67,000 total reservation count.” — Greg Ethridge .
“We generated revenues of approximately $519,000 in Q3… negative gross margin of $384,000… includes an LCNRV adjustment of approximately $366,000… lowest adjusted negative EBITDA since we have been a public company.” — Ramesh Murthy .
“We start to really come to the profitability kind of breakeven around 14,000 to 16,000 units…” — Tony Aquila .
“Our relentless focus… allows us to improve our negative adjusted EBITDA guidance… revised… negative $85M to negative $105M; CapEx $30M to $40M.” — Ramesh Murthy .

Q&A Highlights

CapEx efficiency and 20k run-rate: Management emphasized enhanced processes, manual/semi-manual methods to scale while GA automation ramps; GA system on track Q1 2024 .
Units to breakeven: Around 14k–16k units depending on manual/automation mix; training aided by AI; incentives supporting workforce .
2024 delivery ramp profile: Explicitly avoiding “hockey stick”; stepwise scaling through 2024 with exit leaning toward ~40k run-rate; high-tech areas of MPP1 fully automated (line capacity up to 50k) .
Customer expectations (e.g., Walmart): Multiyear orders with tiered accuracy; potential for customer advances to accelerate CapEx .
Strategic investor: Strong American ally; potential manufacturing partnership; focus on 3D printing methods; confidentiality maintained .
Funding mix and cost of capital: Deposits, advances, incentives, lower-cost capital sources, milestone-based small equity raises; emphasis on capital efficiency .
CapEx to reach 40k run-rate: About $200M additional investment, with opportunistic equipment purchases reducing effective cost .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2023 EPS and revenue was unavailable for GOEV at the time of analysis, so estimate comparisons and quantified surprises cannot be provided [SpgiEstimatesError: Missing CIQ mapping for ticker 'GOEV'].
Given initial revenue and improved guidance, sell-side models may need to reflect: earlier revenue recognition, lower 2H23 CapEx, and less negative Adjusted EBITDA trajectory .

Key Takeaways for Investors

Entering commercialization: First revenues, government deliveries (Oklahoma, NASA), and commissioned manufacturing lines de-risk the path to scale .
Guidance improved materially: 2H23 Adjusted EBITDA less negative and CapEx sharply lower; FY23 Adjusted EBITDA guide introduced — visibility and discipline improving .
Breakeven framework: Profitability targeted around 14k–16k units, with GA system tracking to 20k run-rate in Q1 2024; stepwise 2024 ramp avoids hockey-stick risk .
Order book and reservations underpin pipeline: $3B+ Stage 2/3 orders and 67k+ reservations with strong acceptance in fleet/government segments .
Cost levers: Supplier renegotiations, labor arbitrage to Oklahoma, phased CapEx and opportunistic equipment purchasing support margin improvement over scale .
Liquidity watch: Low period-end cash ($8.3M) offset by $45M post-quarter preferred/warrants and access to deposits/advances/incentives; continued just-in-time financing approach .
Trading implications: Near-term catalysts include additional deliveries, confirmation of GA ramp milestones and deposits; risks include scale-up execution, cash cadence, and unit economics improving as automation increases .

Canoo Inc. (GOEV)·Q3 2023 Earnings Summary