Executive Summary

Q3 2025 revenue of $2.385M and EPS of $-0.50; EPS beat consensus ($-1.45*) materially while revenue was a modest miss vs $2.50M* (actuals) [Q3 2025 consensus via S&P Global*].
Delivered 15 trucks in the quarter; continued progress on W56 platform, with Aeromaster body availability and reported 97% uptime across operating fleets .
Capital structure actions and merger with Motiv: sale-leaseback ($20M) and $5M convertible note executed; closing expected in Q4 2025 with up to $20M post-close debt financing; warrants/legacy senior debt to be repaid/cancelled at close .
Near-term catalysts: shareholder vote (Nov 12) and anticipated Q4 close of Motiv transaction; stronger liquidity runway and simplified balance sheet positioned to improve order conversion and dealer momentum .

What Went Well and What Went Wrong

What Went Well

15 trucks sold with expanding customer interest; W56 uptime at 97% in daily last-mile operations, reinforcing product reliability and TCO advantages .
Product portfolio expanded: Utilimaster Aeromaster body now available on W56, improving flexibility and familiarity for fleet operators .
Liquidity/structure improved: $20M Union City sale-leaseback and $5M convertible from Motiv affiliate; path to repay/cancel senior lender obligations at merger close; CFO emphasized extended runway and cash discipline .
Quote: “We continue to make important progress on our product roadmap… This exciting new offering will enable us to deliver the performance and reliability of our step van in the traditional form factor…” – CEO Rick Dauch .

What Went Wrong

Gross loss widened with higher cost of sales driven by inventory excess/obsolescence reserve (+$3.3M YoY); gross margin deeply negative in Q3 .
SG&A flat YoY ($7.8M vs $7.7M), with $3.6M higher consulting/legal tied to Motiv merger offset by lower compensation and other expenses .
Revenue down slightly YoY ($2.4M vs $2.5M) as fewer trucks delivered; shipments below Q2 record levels (32 trucks) .
Analyst concern: scaling to cost parity with ICE requires volume and BOM/labor cost reductions; management highlighted 2026 production ramp and de-escalators in supplier contracts but acknowledged timeline risk .

Financial Results

Quarterly Actuals (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$0.641	$5.669	$2.385
Net Income ($USD Millions)	$(20.644)	$(14.781)	$(7.828)
EPS (Basic & Diluted, $USD)	$-4.68	$-1.67	$-0.50
Cost of Sales ($USD Millions)	$5.165	$13.051	$10.093
Gross Loss ($USD Millions)	$(4.524)	$(7.382)	$(7.708)
SG&A ($USD Millions)	$6.784	$5.845	$7.771
R&D ($USD Millions)	$1.529	$1.246	$1.078
Loss from Operations ($USD Millions)	$(12.837)	$(14.473)	$(16.556)

Margins and Efficiency (computed from reported figures)

Metric	Q1 2025	Q2 2025	Q3 2025
Gross Margin (%)	-705.9%	-130.2%	-323.2%
Operating Margin (%)	-2002.1%	-255.3%	-693.8%

Q3 2025 Actuals vs Wall Street Consensus

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$2.50*	$2.385	Miss: -$0.115M (−4.6%)*
EPS ($USD)	$-1.45*	$-0.50	Beat: +$0.95 (material)*
# of Estimates (Revenue / EPS)	1* / 1*	—	—

Values marked with * retrieved from S&P Global.

Liquidity snapshot

Metric	Q1 2025	Q2 2025	Q3 2025
Cash & Cash Equivalents ($USD Millions)	$2.645	$2.191	$12.726
Restricted Cash ($USD Millions)	$27.947	$22.528	$25.476
Inventory, net ($USD Millions)	$41.309	$32.758	$30.000

KPIs and Operational Drivers

KPI	Q1 2025	Q2 2025	Q3 2025
Trucks shipped/sold (units)	—	32	15
W56 vehicles operating in fleets (units)	—	>60	>42
Reported uptime	—	97%	97%

No segment revenue breakdown disclosed in the quarter.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	None provided	None provided	Maintained (no formal guidance)
Operating Expenses	FY-to-date (9M)	—	OpEx down $17.5M YoY; Q3 OpEx down $1.2M YoY	Informational
Merger closing timing	Q4 2025	—	Expected Q4 2025 close; shareholder vote Nov 12	New/affirmed timing
Debt financing commitment	At closing	—	Up to $20M post-close ($10M revolver; $10M ABL), terms TBD	New
Senior lender obligations/warrants	At closing	Outstanding	To be repaid/cancelled at close	Improved
Dividend	—	None	None	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
State incentives (HVIP, ZIP)	Building dealer/government channels; WA/CA procurement wins	CA HVIP reinstated; New Jersey/NY programs; consultative sales with dealers	CA HVIP $85k vouchers; pursuing WA/NY vouchers; immediate pickup in CA orders	Improving access and utilization
Product performance & TCO	2,400-mile run; reliability and uptime; TCO benefits	97% uptime; scaling to large fleets; 17M+ miles combined post-merger	97–98% uptime; 55–65% TCO reduction claims in field	Consistently strong; messaging intensifying
Cost structure and BOM	Cash discipline; reverse split; runway focus	Significant OpEx reductions; early fair value gains; liquidity steps	BOM and labor cost reductions needed; de-escalators on volume; 2026 ramp	Path laid out; execution pending
Capital structure / merger	Exploring strategic options	Motiv definitive agreement; $20M SLB + $5M note	Q4 close expected; warrants/notes cleanup; post-close debt	Advancing toward close
Manufacturing ramp	W56 variants; dealer/service expansion	Record shipments (32); integrating body options	15 trucks sold; Aeromaster body validated; plan for 140kW 2026	Mixed near term; roadmap extended

Management Commentary

“We completed the sale of 15 trucks… We are focused on completing our proposed transaction with Motiv to create a leading North American medium-duty electric truck OEM.” – CEO Rick Dauch .
“Our proposed transaction with Motiv will provide Workhorse with a simplified capital structure and the near-term liquidity to support our operations through the proposed transaction close.” – CFO Bob Ginnan .
“Right now, about every truck we're building between now and the new year has already got a purchase order and an HVIP voucher tied to it… we’re seeing repeat orders from multiple FedEx ground operators.” – CEO Rick Dauch (Q&A) .

Q&A Highlights

State incentives and market development: Management is leveraging CA HVIP and pursuing WA/NY vouchers; near-term trucks carry HVIP vouchers, aiding order conversion .
Cost trajectory into 2026: Focus on BOM reductions, labor efficiency from production cadence, and supplier de-escalators tied to volume; acknowledged need to move toward ICE parity over “a couple of years” .
TCO selling proposition: Fleet data indicates 55–65% reduction in total cost of operation driven by fuel and maintenance savings; used as a core sales message to large fleets .

Estimates Context

Coverage was thin (1 estimate each for revenue and EPS in Q3), but results meaningfully outperformed on EPS and modestly missed on revenue; EPS beat was driven by lower interest expense, asset sale gains, and deferred revenue recognition offsetting operating losses .
Expect estimate revisions to reflect improved liquidity posture and merger closing timeline; near-term revenue trajectory remains tied to voucher program utilization and dealer-driven orders .

Q3 2025 consensus: Revenue $2.50M*, EPS $-1.45*; Actuals: Revenue $2.385M , EPS $-0.50 .
Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

EPS beat was significant despite negative gross margin, aided by one-time gains (sale-leaseback $13.8M; deferred revenue gain $4.8M); assess sustainability of profitability drivers ex one-offs .
Revenue softness vs Q2 reflects timing/volume; voucher-backed orders and dealer pipeline support near-term deliveries, but sustained scale is required to lift margins .
Capital structure cleanup at merger close (debt/warrants) and up to $20M post-close debt facilities reduce financing overhang and support working capital for order fulfillment .
Cost roadmap hinges on BOM/labor efficiency and 2026 140kW W56 launch; monitor execution milestones and supplier cost de-escalators .
Trading implications: near-term catalysts around merger vote/close and incremental order announcements; EPS resilience may support sentiment, but margin profile and volume ramp remain the core stock drivers .
Medium-term thesis: if the combined entity achieves scale synergies and leverages voucher programs to accelerate fleet adoption, path to improved unit economics is plausible; watch order cadence from large fleets and municipal contracts .
Risk monitors: inventory obsolescence charges, regulatory incentive changes, and timing of merger-financing commitments could impact runway and delivery schedules .

Workhorse Group Inc. (WKHS)·Q3 2025 Earnings Summary