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WG

Workhorse Group Inc. (WKHS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $0.64M and basic/diluted EPS was -$4.68; both missed the single-analyst S&P Global consensus ($2.00M revenue, -$4.00 EPS). Management reduced operating expenses materially year over year, but volume was weak and gross loss persisted. Bolded below are the significant misses versus estimates. *
  • Management highlighted order momentum and execution: 27 W56 step vans and six W4 CC/W750 trucks ordered YTD, extended-wheelbase W56 deliveries began in April, and real-world performance was showcased via a 2,400-mile cross-country drive.
  • Liquidity remains tight: $2.6M cash and $27.9M restricted cash; convertible notes at fair value rose to $45.2M, and interest expense increased sharply year over year.
  • No formal FY guidance; CFO reiterated focus on cash preservation and stated Q2 shipments to date of 18 trucks (aiming to ship more in Q2 2025 than in all of 2024).
  • Potential stock catalysts: accelerating shipments, new W56 variants and dealer/service footprint expansion, government contract access (GSA/Sourcewell/DGS), and Canada approvals; counterbalanced by regulatory/incentive uncertainty and funding needs.

What Went Well and What Went Wrong

What Went Well

  • “W56’s proven capabilities and recommendations from satisfied customers helped secure an initial order from Gateway Fleets… This initial order lays the foundation for a long-term partnership.” — CEO Rick Dauch. YTD orders total 27 W56 and six W4 CC/W750.
  • Extended wheelbase (208") W56 deliveries commenced in April to a national customer via Revolv; 13-unit order in place, showcasing product breadth and real-world delivery execution.
  • W56 cross‑country 2,400‑mile drive demonstrated ~27 MPGe at highway speeds, with 53% lower fuel costs and 40% lower scheduled maintenance vs ICE; strong ACT Expo engagement supports narrative of dependable, cost‑efficient operations.

What Went Wrong

  • Sales declined to $0.64M vs $1.34M a year ago, primarily due to Aero divestiture and decreased W4 CC/W56 sales; gross loss remained high at -$4.52M driven by low volume.
  • Interest expense surged to $5.3M (vs $1.2M prior year), largely from higher outstanding convertible note balances; fair value adjustments added further P&L volatility.
  • Liquidity constraints: $2.6M cash and $27.9M restricted cash; inventory at $41.3M with accounts payable of $11.1M, underscoring the need to convert inventory to revenue and secure funding.

Financial Results

MetricQ1 2024Q3 2024Q1 2025
Revenue ($USD)$1,339,295 $2,509,717 $640,922
Gross Loss ($USD)$(6,103,483) $(4,132,832) $(4,523,841)
Total Operating Expenses ($USD)$17,623,189 $10,035,437 $8,312,930
Loss from Operations ($USD)$(23,726,672) $(14,168,269) $(12,836,771)
Net Loss per Share (Basic & Diluted, $)$(24.09) $(0.98) $(4.68)

Notes:

  • Q1 2025 YoY: OpEx down substantially (SG&A -$7.3M; R&D -$2.0M) but revenue fell and gross loss persisted.
  • Prior quarter detail: Company did not publish a standalone Q4 2024 quarterly release; Q3 2024 shown for trend context.

Actual vs Consensus (S&P Global):

MetricConsensus (Q1 2025)Actual (Q1 2025)Assessment
Revenue ($USD)$2,000,000*$640,922 MISS
Primary EPS ($)-4.00*-4.68 MISS
# of EstimatesRevenue: 1*; EPS: 1*——

Values marked with * retrieved from S&P Global.

Balance Sheet Snapshot (Q1 2025):

MetricQ1 2025
Cash and Cash Equivalents ($USD)$2,644,825
Restricted Cash ($USD)$27,946,513
Inventory, net ($USD)$41,308,930
Accounts Payable ($USD)$11,091,912
Convertible Notes at Fair Value ($USD)$45,244,210
Stockholders’ Equity ($USD)$31,392,097

Segment breakdown: Not disclosed; results reported at consolidated level.

KPIs and Operational Metrics:

KPIQ1 2025 / Recent
Purchase Orders YTD27 W56 (178"/208") + six W4 CC/W750
Extended Wheelbase DeliveriesBegan April 2025; 13-unit order to national fleet via Revolv
W56 Cross-Country Drive2,400 miles; ~27 MPGe; 53% lower fuel costs; 40% lower maintenance
Q2 2025 Shipments (to date)18 trucks; goal to exceed full-year 2024 shipments in Q2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025None providedNone providedMaintained (no guidance)
ShipmentsQ2 2025N/A“Already shipped 18 trucks; aim to ship more in Q2 2025 than all of 2024”New qualitative target
CapexQ2 2025N/A~$118,000 expected, similar to Q1 spendNew detail
Operating Cash BurnOngoingN/AReduced to < $3M/monthNew detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
FedEx relationship3‑yr master framework; 15 trucks delivered for upfit; growing ISP orders and demos Expect 2025 RFQ; additional demos; extended W56 deliveries Continued commercial validation
Product performanceW56 achieving 27–31 MPGe; durability; 208" variant; 250k mile durability test 2,400‑mile drive; ~27 MPGe; lower fuel/maintenance; Canada approvals Strengthening proof points
Dealer/service footprintSelective dealer additions; focus on EV-mandated geographies Added Range Truck Group (WA) and Ziegler (WI); service partners in Bay Area/NY metro Expanding coverage
Government contracts/regulatoryGSA award; Sourcewell momentum; regulatory/policy uncertainty noted DGS contract access via Kingsburg; continued incentive discussion; no formal outlook Access improving; policy mixed
Telematics/technologyUpfitter/portfolio expansion Geotab telematics integrated into W56 dashboards Enhanced fleet analytics
Financial runway/fundingCost reductions; financing facility activity Operating cash burn < $3M/month; working with ATW; no annual guidance Preserving liquidity

Management Commentary

  • CEO Rick Dauch: “We continue to deliver high-quality electric trucks and build strong momentum as customer interest grows… recommendations from satisfied customers helped secure an initial order from Gateway Fleets… we look forward to building on it for years to come.”
  • CFO Bob Ginnan: “We have already shipped eighteen trucks in Q2 2025—six times the volume of Q1 2025—and we aim to ship more by the end of Q2 2025 than we did in all of 2024.”
  • CEO Rick Dauch (call): “We don’t build hype, we build trucks… Our products are certified, production‑ready and backed by a growing network of trusted dealers and service partners.”
  • CEO Rick Dauch (call): “During the recent peak season, the W56 step vans proved themselves in real‑world conditions, achieving 96% uptime… best uptime record of anybody in the commercial EV segment.”

Q&A Highlights

  • Q&A was limited; management reiterated shipment momentum (18 trucks shipped in Q2 to date), focus on disciplined execution, and lack of formal annual revenue guidance amidst EV market uncertainty.

Estimates Context

  • S&P Global consensus for Q1 2025: Revenue $2.00M (1 estimate), EPS -$4.00 (1 estimate). Actuals: $0.64M revenue and -$4.68 EPS. Both were misses, driven by lower W4 CC and W56 sales volume and the Aero divestiture. *
  • Expect near‑term estimate revisions to reflect lower realized volume and elevated interest expense; order momentum and Q2 shipment cadence could moderate negative revisions if conversion to revenue accelerates. *

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Volume remains the critical swing factor; Q1 sales softness and negative gross profit underscore the need to convert inventory and POs into deliveries and recognized revenue. Watch Q2 shipment-to-revenue conversion.
  • Cost discipline is tangible (OpEx down ~$9.3M YoY); if shipment momentum persists, operating leverage could improve despite gross loss headwinds.
  • Real‑world performance and customer validation (FedEx framework, cross‑country drive, Canada approvals, Geotab telematics) strengthen medium‑term product thesis.
  • Liquidity constraints and financing dependence (restricted cash, convertible notes, rising interest expense) remain key risk; funding actions and sale‑leaseback progress should be monitored.
  • Regulatory/incentive uncertainty persists; government procurement access (GSA, DGS, Sourcewell) and dealer coverage in EV‑mandated regions provide offsetting demand channels.
  • Near‑term trading: stock likely sensitive to order announcements, shipment updates, and any funding developments; medium‑term thesis hinges on scaling W56/W4 CC deliveries at acceptable margins.
  • Catalysts: Q2 shipment updates, additional FedEx/ISP orders, Canada demos, dealer/service network additions, potential battery supply enhancements.