IDEANOMICS, INC. (IDEX)·Q2 2023 Earnings Summary

Executive Summary

• Q2 2023 continuing operations revenue was $8.18M, down 12.8% year over year, while gross margin improved to 8.4% from -5.2% in Q2 2022; loss from operations was $35.19M and diluted EPS was -$3.46 .
• Management finalized a strategic reorganization to focus the company on last‑mile/local delivery vehicles and associated charging products centered on VIA Motors; cost actions reduced quarterly operating expenses excluding impairments to $32.7M from $38.4M in Q1 .
• Discontinued operations (Timios and China) were carved out in Q2; Energica, Solectrac, WAVE Charging and US Hybrid were classified “held for sale” to pursue divestitures/strategic financing, a key liquidity lever amid going‑concern uncertainty and breached debt covenants (Yorkville not enforcing) .
• On Aug 25, 2023 the company effected a 1‑for‑125 reverse stock split to address Nasdaq minimum bid requirements, retroactively adjusting share and EPS figures in filings—an important consideration for quarter‑to‑quarter EPS comparisons .

What Went Well and What Went Wrong

What Went Well

• Strategic focus sharpened: “We are finalizing a reorganization…putting most of our emphasis on VIA Motors and the market opportunity that affords” (CEO); late‑stage discussions/agreements with multiple customers/partners validate the strategy .
• Gross margin recovery: Q2 gross margin improved to 8.4% vs. -5.2% last year, driven by mix shift toward charging/batteries/powertrain products and cost actions .
• Operating cost discipline: Operating expenses excluding impairments fell to $32.7M in Q2 from $38.4M in Q1 (COO highlights cost reductions and consolidation, including charging assets under WAVE Charging) .

What Went Wrong

• Top‑line pressure and losses: Q2 revenue declined 12.8% YoY to $8.18M; loss from operations was $35.19M and net loss attributable to common shareholders was $35.50M .
• Liquidity/goin‑concern risk: Cash and equivalents in continuing ops stood at $2.90M (total cash $11.77M), with $70.8M accounts payable/accrued and $15.3M debt due within 12 months; management disclosed substantial doubt about going concern .
• Debt covenant breaches: At least two covenants were breached (timely SEC filings and minimum stock purchase by insiders), increasing financing risk though the lender had not asserted default and extended more loans .

Financial Results

Consolidated performance vs prior periods and estimates

Notes:

• Q1 2023 EPS was reported pre reverse stock split. The company applied a 1‑for‑125 reverse split effective Aug 25, 2023 and stated that accompanying financial statements were adjusted retroactively—a comparability caveat for EPS figures across quarters .

Segment/Product revenue breakdown

Selected KPIs and balance sheet items

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategy: “We are finalizing a reorganization of the business to focus on last mile and local delivery vehicles and associated charging products…putting most of our emphasis on VIA Motors” (CEO) .
• Financials: “Revenue for continuing operations in the quarter was $8.2 million…Gross profit from continuing operations was $0.7 million, representing a gross margin of 8.4%…Operating expenses…for the quarter was $32.7 million, down 15% from the $38.4 million in the first quarter” (CFO) .
• Portfolio actions: “Businesses like Energica and Solectrac fall outside of that focus…we have begun work…to evaluate if the sale of those businesses would produce suitable returns…with WAVE Charging and US Hybrid…speaking with potential strategic investors to provide nondilutive capital” (COO) .

Q&A Highlights

• There was no live Q&A in the Q2 call. For context, Q1 call Q&A addressed:
  • Capital needs/financing plan: multiple term sheets for non‑dilutive debt; grants/incentives as catalysts .
  • Divestitures: Timios process; potential EV asset sales at the right value .
  • Unlocking value: flagship customer partnerships/licensing to validate technology and drive orders .

Estimates Context

• Attempted to retrieve S&P Global consensus for Q2 2023 (EPS, revenue, EBITDA), but mapping for IDEX was unavailable in SPGI systems. As a result, Wall Street consensus comparisons could not be provided at this time. If/when S&P Global coverage becomes available, we will add consensus vs. actuals promptly.

Key Takeaways for Investors

• Near‑term liquidity is the central risk: management flagged substantial doubt about going concern; divestitures and strategic financing (including WAVE/US Hybrid investor interest) are key catalysts to monitor .
• Strategic focus is clearer: pivot to VIA’s last‑mile platform and integrated charging improves alignment and may compress the time to meaningful revenue as partnerships convert to orders .
• Margin trajectory improved: mix shift to charging/batteries/powertrain products underpins Q2 gross margin recovery; sustaining this mix and operational efficiencies is critical .
• Operating expense control is working: Q2 OpEx excluding impairments declined quarter‑over‑quarter; continued cost discipline is necessary amid financing constraints .
• Watch corporate actions: reverse split is completed; next value unlocks hinge on asset sales (Energica/Solectrac) and strategic capital for WAVE/US Hybrid/VIA .
• Narrative moving the stock: concrete customer/partner announcements for VIA and WAVE (licensing, POCs converting to scale) and definitive divestiture transactions are likely the primary near‑term stock catalysts .
• EPS comparisons require care due to reverse split; prioritize revenue/margin/operating loss trends and cash/liability trajectory for assessment .

Sources Reviewed

• Q2 2023 Form 10‑Q and MD&A (full): revenue, margins, discontinued operations, held‑for‑sale classification, balance sheet, liquidity/going‑concern, debt covenants, reverse split –.
• Q2 2023 earnings call transcript (full): strategic focus, financial highlights, cost actions, portfolio strategy –.
• Q1 2023 8‑K press release and transcript: prior quarter baseline and financing/disposals Q&A –.
• Q4 2022 8‑K press materials/transcript: multi‑quarter trend context –.

We searched for an 8‑K Item 2.02 (earnings press release) specifically for Q2 2023 but did not find one; Q2 results were communicated via the 10‑Q and the Q2 earnings call transcript .