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Serve Robotics Inc. /DE/ (SERV)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $175,842, down sequentially vs Q3 ($221,555) but up sharply YoY vs Q4 2023 ($42,719); FY 2024 revenue reached $1,812,483 (+773% YoY), driven by software services and expanding delivery/branding revenue .
  • GAAP net loss in Q4 was $(13,119,495) with GAAP EPS of $(0.36); non-GAAP net loss was $(8,495,049) and adjusted EBITDA was $(8,679,137), reflecting higher R&D and G&A as SERV ramps its 2,000-robot plan .
  • Management reaffirmed plans to deploy 2,000 robots by year-end 2025, accelerated Miami launch (Q1), added Atlanta (Q2), and expects 250 Gen3 robots fully deployed by end of Q2, followed by ~700 lower-cost units in Q3 and the remainder in Q4; Gen3 cost down ~65% vs Gen2 following an additional 30% reduction post-year-end .
  • Liquidity strengthened: $123.3M cash at 12/31/24 and debt-free; additional $80M raised post-year-end; CFO now expects to avoid equipment financing, saving ~$20M over two years; ~57M shares outstanding as of Mar 6, 2025 .
  • Potential stock catalysts: accelerated multi-city deployments (Miami, Dallas, Atlanta), third-gen robot cost reductions, strong cash runway and PwC auditor transition signaling governance upgrades; multi-modal Wing partnership could extend delivery radius and monetization opportunities .

What Went Well and What Went Wrong

  • What Went Well

    • “Transformational year”: revenue +~700% YoY to $1.8M; reach expanded to 1,000+ restaurants and 300,000+ households; first 75 Gen3 robots delivered ahead of schedule .
    • Fleet and operations scaling: daily supply hours +94% YoY and daily active robots +81% YoY; Q4 delivery volume +20% QoQ despite late-quarter fleet expansion, driven by operational optimization .
    • Cost-down and manufacturing: completed Gen3 design with faster, longer-range robots and 5x compute at ~50% of prior manufacturing cost; an additional ~30% cost reduction post-year-end (total ~65% vs Gen2) and Magna production ramp .

  • What Went Wrong

    • Sequential revenue decline: Q4 total revenue ($175,842) fell vs Q3 ($221,555) primarily due to reduced software services in Q4 relative to Q2/Q3 and a higher fixed cost base impacting COGS during fleet ramp preparation .
    • Elevated operating expenses: Q4 GAAP opex increased to $12,920,693 (vs $8,289,324 in Q3), with R&D and G&A up as SERV invested in fleet scaling, software development, and corporate infrastructure .
    • Profitability still distant: Q4 adjusted EBITDA of $(8,679,137) and non-GAAP net loss of $(8,495,049), reflecting early-stage scaling; management emphasized non-recurring nature of software revenue and utilization ramp required for margin improvement .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($)$42,719 $221,555 $175,842
Cost of revenues ($)$399,097 $377,304 $831,884
Gross profit (loss) ($)$(356,378) $(155,749) $(656,042)
Total operating expenses ($)$6,464,578 $8,289,324 $12,920,693
GAAP net loss ($)$(7,063,386) $(7,996,219) $(13,119,495)
GAAP EPS (basic & diluted)$(0.50) $(0.20) $(0.36)
Non-GAAP net loss ($)$(6,823,267) $(5,801,208) $(8,495,049)
Adjusted EBITDA ($)$(6,113,833) $(6,241,002) $(8,679,137)

Segment Revenue Breakdown

SegmentQ4 2023Q3 2024Q4 2024FY 2024FY 2023
Software services ($)$0 $38,767 $0 $1,185,903 $0
Delivery services ($)$34,678 $112,288 $92,592 $332,180 $146,462
Branding fees ($)$0 $70,500 $83,250 $294,400 $45,250
Other revenue ($)$8,041 $0 $0 $0 $15,833
Total ($)$42,719 $221,555 $175,842 $1,812,483 $207,545

KPIs

KPIQ4 2023Q3 2024Q4 2024FY 2023FY 2024
Daily Active Robots (units)34 59 57 29 52
Daily Supply Hours (hours)260 465 455 206 399

Balance Sheet and Cash Flow Highlights (context)

  • Cash and cash equivalents: $123,266,437 at Dec 31, 2024; total assets $139,600,873; stockholders’ equity $131,680,914; no debt outstanding at year-end .
  • Net cash used in operating activities FY 2024: $(21,542,229); investing $(10,317,987); financing +$155,119,897; ending cash +$123,259,681 YoY .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Robot deployment (total)FY 2025Deploy 2,000 robots by YE 2025 Reaffirmed: 2,000 by YE 2025; 250 fully deployed by end Q2; ~700 in Q3; remainder in Q4 Maintained; concrete phasing added
Market expansionH1 2025New metro by end Q2 2025 (Dallas-Fort Worth) Miami launched in Q1; Dallas on track Q2; Atlanta added for Q2 Raised (accelerated scope)
Gen3 robot cost2025 build~50% cost reduction vs prior gen Additional ~30% cost-down vs current batch; total ~65% vs Gen2 Raised (more cost reduction)
Financing approach2025-2026Equipment financing facilities available ($11.6M) No longer anticipate equipment financing; ~$20M cash savings over two years Improved (cost savings)
Revenue modelPost-deploymentRun-rate $60–$80M at full utilization Reaffirmed $60–$80M run-rate; full utilization estimated in 2026; software revenue non-recurring Maintained with timing clarity
Auditor2024/2025DBBMcKennon (historical) [—]PwC appointed post-2024 audit, ERP/data upgrades planned Governance upgrade

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
AI/technology initiativesCompleted Gen3 design; 5x compute, faster, longer range; ~50% cost reduction Early Gen3 deliveries ahead of schedule; design choices validated; cost optimization drivers (in-house components, scale) Additional ~30% cost-down beyond prior 50%; AI progress as tailwind; application-layer data flywheel emphasized Accelerating tech and cost efficiency
Supply chain/tariffs/macroSecured global supplier network; minimizing disruptions Monitoring tariffs/regulatory shifts; most materials outside China No material impact anticipated; diversified supply chain; offset via cost reductions Resilient with mitigations
Product performance/operationsKPIs up QoQ; gross margin improving via autonomy/software efficiencies Daily robots/supply hours up; sequential delivery/branding revenue growth Q4 delivery volume +20% QoQ despite late fleet build; KPIs stable QoQ due to expansion activities Scaling with operational optimization
Regional trends/expansionLA expansion (Koreatown); plan for new metro by Q2 2025 Announced Dallas-Fort Worth; LA neighborhoods expansion Launched Miami; Dallas and Atlanta on track for Q2; added Glendale and Long Beach in LA Multi-city acceleration
PartnershipsMagna services non-recurring; Ouster expanded supply Shake Shack and Wing partnerships; Magna licensing phase II Wing deployment targeted with Dallas launch; continued NVIDIA tech partnership despite equity exit Deepening ecosystem
R&D execution/capexR&D investment ramp; tooling and NRE spending Continued R&D; operating expense management R&D largest opex driver; ERP/data transformation initiatives planned Investment for scale
Governance/regulatoryUplisting; equipment financing commitments ATM established; going-concern alleviated New shelf/ATM filed; PwC appointed auditor Strengthened governance

Management Commentary

  • “2024 was a transformational year… doubled delivery capacity… completed the design of a new generation… began scale manufacturing with Magna… expanded our delivery partnerships… well-positioned for continued growth and on track to deploy 2,000 robots… by year-end.” — CEO Ali Kashani .
  • “Q4 gross margin cost of sales increased as the fixed cost base expanded from the ramp-up of our 2,000-unit fleet… 2024 gross margin improved from negative 700% in 2023 to negative 4% in 2024.” — CFO Brian Read .
  • “We’ve achieved another 30% cost reduction in our next batch of Gen3 robots… total cost ~35% of Gen2… plan to build 700 of the new lower-cost robots in Q3 and the rest in Q4.” — CEO Ali Kashani .
  • “Due to our strong cash position, we no longer anticipate funding of our 2,000-robot fleet through equipment financing… cash savings over the next 2 years of approximately $20 million.” — CFO Brian Read .
  • “NVIDIA… exited that position when we became a public company… they remain a key partner… robots continue to use their technology.” — CEO Ali Kashani .

Q&A Highlights

  • Cost reduction drivers: Supply chain upgrades (Tier 2 to Tier 1), scale benefits, some components now ~70% cheaper; ongoing design and supply improvements expected to further reduce robot costs .
  • Deployment phasing: 250 robots in Q1/Q2 (fully deployed by end Q2); ~700 in Q3; remainder in Q4; iterative rollout to learn, fix, and reduce costs .
  • Supply chain/tariff exposure: Global diversification, limited China exposure; anticipate immaterial impact; further cost reductions provide offset .
  • Market performance: Miami launch trajectory positive with 50 restaurants onboarded; utilization ahead of schedule in key metrics .
  • Gen3 early performance: Better than prior gen at similar rollout stage; manufacturing process scaling efficiently .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024 EPS and revenue, but the request exceeded the daily limit; consensus comparisons are therefore unavailable at this time [GetEstimates error].
  • Given the lack of consensus visibility here, we cannot assess beats/misses vs Wall Street for Q4. Future updates should anchor to S&P Global consensus as available.

Key Takeaways for Investors

  • Sequential revenue softness in Q4 was driven by the mix shift away from software services and by fixed cost absorption ahead of large-scale fleet deployment; delivery volume rose QoQ, indicating operational traction .
  • The multi-pronged cost-down (50% reduction, plus ~30% further reduction) materially enhances unit economics and capital efficiency ahead of the 2,000-robot rollout; this is likely the most important margin lever in 2025–2026 .
  • Liquidity and capital strategy materially improved: $123M cash at year-end and $80M raised post-year-end; avoiding equipment financing saves ~$20M, reducing future interest/buyouts and strengthening flexibility .
  • Near-term operational focus on readiness (H1) with volume growth expected; more substantial revenue scaling likely as Q3/Q4 deployments hit streets and utilization rises, with full run-rate ($60–$80M) targeted once the fleet reaches full utilization (estimated 2026) .
  • Geographic expansion (Miami live; Dallas and Atlanta Q2) plus partnerships (Uber Eats, Wing, Shake Shack) support both delivery revenue and branding monetization, with Wing potentially extending radius up to ~6 miles .
  • Governance upgrades (PwC audit, ERP/data initiatives) and clarified financing optionality (shelf/ATM with no near-term raise planned) remove prior going-concern overhang and may broaden institutional appeal .
  • Watch for Q2 milestones (250 robots fully deployed; Dallas and Atlanta launches) and Q3/Q4 manufacturing cadence (700+ remainder of fleet); execution on phasing and utilization ramp will be critical to margin trajectory .

Notes on Prior Quarters Used for Trend Analysis

  • Q3 2024: Revenue $221,555; delivery and branding revenues grew sequentially; LA expansion announced; Dallas-Fort Worth selected as next city; first Gen3 units delivered ahead of schedule .
  • Q2 2024: Revenue $468,375 including $296,035 software; KPIs improved; completed Gen3 design; manufacturing commenced with Magna; LA expansion to Koreatown .

Other Relevant Q4 Materials

  • Press release (8-K Item 2.02) furnished as Exhibit 99.1 with full tables and KPI disclosures .
  • Investor presentation furnished (Exhibit 99.2), March 2025 update; useful for strategic context but core Q4 results are in Exhibit 99.1 .