Executive Summary

Q2 revenue accelerated to $7.92M (adjusted $8.17M) on 70 unit sales, the second-highest quarter in company history, as ZEV4 school/shuttle buses and initial Lightning Mobile DC Fast Charger deliveries offset prior Romeo battery disruptions .
Management trimmed the top end of 2023 guidance (revenue $35–$45M; unit sales 300–350; production 200–230) to conserve cash and pivot to build-to-order; low-end maintained, with inventory conversion a near-term liquidity lever .
Profitability remains challenged: Q2 gross loss was $5.02M and adjusted EBITDA loss was $17.14M, though losses improved sequentially from Q1 as revenue rebounded; positive gross margin now expected in 1H next year per CFO .
Stock catalysts: ZEV4 ramp and school-bus traction, multi-sourced batteries (CATL/Proterra) mitigating Proterra Chapter 11 risk, and California ACF mandates in 2024; overhangs include liquidity needs and reduced production outlook .

What Went Well and What Went Wrong

What Went Well

ZEV4 ramp and school bus momentum; 70 unit sales in Q2 (vs. 36 y/y) with positive customer response and repeat orders; first Lightning Mobile DC Fast Charger deliveries completed .
Supply chain stabilization and resilience: sufficient chassis for guidance; batteries multi-sourced (CATL and Proterra) with ability to pivot quickly despite Proterra’s bankruptcy filing; management “feels good” about battery supply options .
Clear regulatory/incentive tailwinds: customers increasingly leveraging U.S./Canadian programs; California ACF mandates start in 2024, supporting medium-duty EV adoption across fleets .

Selected quotes:

“Q2 was a strong quarter, with the second highest quarterly revenue in our company’s history.” – CEO Tim Reeser .
“We expect the pipeline and backlog to continue to accelerate as customers become more familiar with the incentive processes.” – CEO Tim Reeser .
“I wouldn’t expect to get to positive gross margin this year… first half of next year, but we would certainly expect to see gross margin improve as we migrate more towards the ZEV4.” – CFO David Agatston .

What Went Wrong

Guidance cut at the top end: revenue lowered to $35–$45M (from $35–$50M); unit sales and production ranges reduced, reflecting build-to-order discipline and inventory constraints if orders arrive late in H2 .
Profitability still negative: Q2 gross loss of $5.02M and adjusted EBITDA loss of $17.14M; y/y adjusted EBITDA loss widened on higher cost of revenues; not expecting positive gross margin until 1H next year .
Liquidity remains a key risk: cash fell to $12.6M; management will rely on inventory sell-down, Yorkville PPA (≈$47M remaining), and potential strategic alternatives/recapitalization .

Financial Results

All figures USD; quarters shown oldest → newest.

Metric	Q2 2022	Q1 2023	Q2 2023
Revenue ($M)	$3.54	$1.31	$7.92
Adjusted Revenue ($M)	$3.54	$3.57	$8.17
Gross Profit (Loss) ($M)	$(1.35)	$(6.84)	$(5.02)
Net Income (Loss) ($M)	$35.74	$(23.44)	$(21.45)
Diluted EPS ($)	$6.94	$(4.89)	$(3.70)
Adjusted EBITDA ($M)	$(13.91)	$(19.72)	$(17.14)

KPIs and balance sheet (where available):

KPI / Balance Sheet	Q2 2022	Q1 2023	Q2 2023
Units Sold (Vehicles/Powertrains/Chargers)	36	29	70
Units Produced	—	53	46
Cumulative Fleet Miles	—	—	4.9M miles
Cash & Equivalents ($M)	—	$35.45	$12.62
Inventories ($M)	—	$46.99	$57.15

Notes:

Q2 adjusted revenue excludes $0.254M of customer refunds related to the Romeo battery recall; Q1 excluded $2.255M .
In the Q2 call, CFO referred to “first quarter” adjusted EBITDA loss of $17.1M; press release clarifies this was Q2 adjusted EBITDA loss ($17.14M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2023	$35–$50M	$35–$45M	Lowered top end
Unit Sales	FY 2023	300–400 units	300–350 units	Lowered top end
Unit Production	FY 2023	400–450 units	200–230 units	Lowered range

Rationale: shift to build-to-order to conserve cash; potential inability to procure inventory in time to recognize late H2 orders; large finished goods inventory to sell through .

Earnings Call Themes & Trends

Topic	Q4 2022 (Q-2)	Q1 2023 (Q-1)	Q2 2023 (Current)	Trend
Supply chain (batteries/chassis)	Romeo battery quality constrained Q4 shipments; transition to GM chassis and Proterra/CATL batteries	Recall-related refunds depressed GAAP revenue; multi-sourcing in place	Chassis supply adequate for guidance; multi-sourced batteries (CATL/Proterra) mitigate Proterra Chapter 11 risk	Improving stability, managed risk
Incentives & mandates	Incentives steering demand to Class 4; focus on school/shuttle/work trucks	Helping customers navigate programs; orders building	Customers increasingly using incentives; CA ACF mandates begin 2024; broader state adoption likely	Strengthening demand tailwinds
Product execution (ZEV4, Mobile charger)	New Class 4 GM-based platform ready for Q2’23 volume	ZEV4 launch underway; Macnab order 126 vehicles	ZEV4 ramped; first Mobile DC Fast Charger deliveries; strong feedback	Ramping
Liquidity/capital	Convertible notes exchange; debt reduction	Yorkville up to $50M committed	Cash $12.6M; inventory sell-down; Yorkville PPA ≈$47M remaining; exploring recap/sale	Tight, multiple levers
Profit path	Record production but losses; transition dragging H1’23 revenue	Adjusted EBITDA loss $(19.7)M	Adj. EBITDA loss $(17.1)M; positive gross margin targeted 1H next year	Gradual improvement expected

Management Commentary

“With the supply issues and associated disruption from the Romeo battery issue now behind us, we are ramping production of our new ZEV4 trucks and buses… and charting a path towards positive gross margin.” – CEO Tim Reeser .
“We have sufficient inventory and the orders in hand to convert that inventory into cash during Q3 and Q4… while we… seek additional sources of capital to strengthen our overall liquidity outlook.” – CEO Tim Reeser .
“We have sufficient quantities of high-quality batteries from Proterra and CATL to meet our Q3 and Q4 build plans… our multi-source strategy will serve us well given the most recent news from Proterra.” – CEO Tim Reeser .
“Based on current business conditions, we expect 2023 revenue $35–$45M; unit sales 300–350; production 200–230… reduced top end reflects conserving cash and build-to-order.” – CFO David Agatston .

Q&A Highlights

Demand/mix: Focus on Class 4 where incentives and lower competition intersect; ZEV4 serves school, shuttle, and work trucks; ZEV3 passenger van remains unique in market .
Battery strategy: Multi-sourced (CATL/Proterra) to ensure resilience; CATL LFP chemistry offers 30–40% lower battery costs vs NMC, improving margins when deployed .
Cost trajectory: Labor per vehicle falling with ZEV4 learning curve; volume mix shift to ZEV4 and declining battery/motor costs support gross margin improvement; positive GM expected 1H next year .
Regulatory tailwinds: California ACF applies to vehicles registered in CA starting 2024; OEM zero-emission credit dynamics add another driver; broader state adoption possible .
Liquidity/working capital: ~$20–$25M of finished goods within $57M inventory; legal settlement cash; Yorkville PPA has ~$47M left; expected inventory drawdown provides cash inflow .

Estimates Context

Wall Street consensus (S&P Global) was unavailable for this ticker at the time of analysis due to a Capital IQ mapping issue, so we cannot provide “vs. estimates” comparisons for revenue or EPS. We attempted to retrieve Q2 2023, Q1 2023, and Q2 2022 consensus, but no CIQ mapping was found for ZEVY (GetEstimates error).

Key Takeaways for Investors

Execution inflection: Revenue rebounded to $7.9M with 70 units sold as ZEV4 ramps and Lightning Mobile charger starts shipping; sequential improvement in adjusted EBITDA loss suggests operating leverage as mix shifts to ZEV4 .
Guidance prudence: Top-end trims (revenue to $45M; units/production lowered) reflect cash conservation and build-to-order focus; low-end maintained, implying confidence in near-term order conversion .
Liquidity watchlist: Cash $12.6M plus inventory sell-down, Yorkville ($~47M), and potential strategic actions provide runway; pacing of collections and production remains critical .
Supply chain resilience: Multi-sourced batteries and adequate chassis mitigate risks (incl. Proterra); CATL LFP cost advantages support margin trajectory into 2024 .
Policy-led demand: Incentives and California ACF mandates are structural tailwinds for Class 4 school/shuttle/work trucks where Lightning is focused .
Profit path: Management targets gross margin improvement through volume, mix (ZEV4), and component cost downs; positive gross margin expected in 1H next year, but execution risk remains .
Trading implications: Near-term moves likely driven by order flow visibility, inventory monetization, funding progress, and evidence of ZEV4 gross margin improvement; lack of Street estimates may amplify headline sensitivity.

Other Relevant Q2 Materials

Q2 production update: 46 units produced in Q2 (40 vehicles; 3 mobile DC fast chargers), with production weighted to Type A school buses via Collins partnership .

Lightning eMotors, Inc. (ZEVY)·Q2 2023 Earnings Summary