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Lightning eMotors, Inc. (ZEVY)·Q3 2023 Earnings Summary

Executive Summary

  • Record quarterly revenue of $12.366M, driven by sales of 110 vehicles; adjusted revenue of $12.690M excluding $0.324M recall-related refunds .
  • Reported net loss of $50.672M ($7.84 diluted EPS) due largely to inventory write-downs ($18.0M) and impairment of property and equipment ($4.9M), plus elevated cost of revenues; adjusted EBITDA loss was $39.255M .
  • Production of 55 units in Q3 (all complete vehicles), with strong mix in ZEV3/4 and growing pipeline for Lightning Mobile DC Fast Charger; school buses highlighted as a key application with 70 sold in 2023 through Collins Bus partnership .
  • Liquidity/giong-concern risk disclosed; management is pursuing capital raises and strategic options; consensus estimates from S&P Global for Q3 were unavailable for ZEVY, limiting beat/miss comparison . S&P Global consensus estimates unavailable for ZEVY due to mapping limitations.

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenue and strong unit sales: “We generated record quarterly revenue, selling 110 vehicles…” including 69 ZEV3 and 41 ZEV4 .
  • Product traction: “Customer feedback regarding our new ZEV4 vehicles has been excellent, with special praise for the smooth ride, responsive handling, regenerative braking, and overall reliability” .
  • Pipeline and certification milestones: Ongoing deployments of Lightning Mobile DC Fast Charger; ISO 9001:2015 certification adds quality credibility; fleet surpassed 5.8M miles with over 750 vehicles deployed .

What Went Wrong

  • Large GAAP loss from non-cash charges: Inventory reduced to NRV by $18.0M and $4.9M impairment on property/equipment in Q3; cost of revenues surged to $45.694M, driving a gross loss of $33.328M .
  • Liquidity and going-concern disclosure: Company’s ability to continue depends on achieving profitability and/or raising capital; potential need to liquidate inventory or seek bankruptcy protection if funding not secured .
  • Incentive program delays: Management noted government incentives can elongate deliveries and cash collection, creating operational challenges for customers and OEMs .

Financial Results

MetricQ1 2023Q2 2023Q3 2023
Revenue, net ($USD Millions)$1.311 $7.916 $12.366
Adjusted Revenue ($USD Millions)$3.566 $8.170 $12.690
Customer Refunds ($USD Millions)$2.255 $0.254 $0.324
Units Produced (count)53 46 55
Units Sold (count)29 70 110
Cost of Revenues ($USD Millions)$8.152 $12.933 $45.694
Gross Profit/Loss ($USD Millions)$(6.841) $(5.017) $(33.328)
Loss from Operations ($USD Millions)$(23.776) $(19.423) $(48.025)
Net Income (Loss) ($USD Millions)$(23.435) $(21.448) $(50.672)
Diluted EPS ($USD)$(4.89) $(3.70) $(7.84)
Cash & Equivalents ($USD Millions, period-end)$35.447 $12.620 $6.022

Segment/KPI details for Q3 2023:

KPI / SegmentQ3 2023
ZEV3 Units Sold (cargo + passenger)69
ZEV4 Units Sold (school buses, shuttles, cargo trucks)41
Lightning Mobile DC Fast Charger – deployments/pipelineActive deployments and pipeline growth
Fleet Driven Miles (cumulative)5.8M+
Vehicles Deployed (cumulative)750+

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2023$35–$50 (Q1 reiteration) $35–$45 (updated in Q2) Lowered top-end from $50 to $45
Unit Sales (count)FY 2023300–400 (Q1) 300–350 (Q2) Lowered top-end
Unit Production (count)FY 2023400–450 (Q1) 200–230 (Q2) Lowered
FY 2023 Guidance in Q3 ReleaseFY 2023—Not provided in Q3 press release N/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2023)Previous Mentions (Q2 2023)Current Period (Q3 2023)Trend
Supply chain & batteriesRomeo battery recall impact; move past defects; orders for ZEV3/ZEV4 gaining Dual/multi-source battery strategy; CATL and Proterra supply; managing motors/chassis; inventory drawdown plan Added CATL as alternative to Proterra on ZEV4; accepting orders Improving resilience via multisourcing
Incentives & mandatesHelping customers navigate programs; reiterated FY guidance Incentives elongate sales cycle; CARB Advanced Clean Fleets starting 2024; OEM credit dynamics Incentives causing delivery and payment delays; commits to support program evolution Demand supported but timing elongated
Product performanceMacnab 126-vehicle order; positive feedback on Class 4 GM platform ZEV4 ramp; positive customer feedback; first Lightning Mobile DCFC deployments ZEV4 praised for ride/handling/braking/reliability; Mobile DCFC pipeline growing Execution progress; repeat orders
Cost structure & marginsActions to reduce expense; path to growth capital Cost-downs in labor/batteries/motors; positive GM targeted first half next year “Progress toward positive gross margin” as legacy inventory replaced by higher-margin products Improving mix; margin path intact
Liquidity & capitalYorkville up to $50M facility announced Cash $12.6M; Yorkville/Lincoln Park accessible; strategic options incl. sale Cash $6.0M; going-concern risks; need capital raises/strategic transactions Deteriorated cash; urgent funding need

Management Commentary

  • “We generated record quarterly revenue, selling 110 vehicles across a range of classes and vehicle applications.”
  • “Customer feedback regarding our new ZEV4 vehicles has been excellent, with special praise for the smooth ride, responsive handling, regenerative braking, and overall reliability.”
  • “We remain supportive of the significant incentive programs… however… [they] can add significant delays in delivery of vehicles and collection of the payment from customers.”
  • “We continue to build the pipeline for our Lightning Mobile DC Fast Charger... [it] overcomes the permitting delays and lead times that are slowing the installation of permanent DC fast charging infrastructure.”

Q&A Highlights

Note: No Q3 2023 earnings call transcript was available in our document set; highlights below are from Q2 2023 call to contextualize trajectories.

  • Battery supply resilience: Multi-source strategy (CATL LFP and Proterra NMC), ability to pivot quickly; CATL costs 30–40% lower than NMC offering margin improvement potential .
  • Margin trajectory: Gross margin not expected positive in 2023; improvement expected as mix shifts to higher-ASP ZEV4; target positive GM in first half next year .
  • Liquidity: Working capital release from inventory sales; ~$20–$25M of finished goods inventory; $3M legal settlement; $47M remaining on Yorkville facility; pursuing recapitalization/strategic alternatives .
  • Demand mix: Focus on Class 4 (school/shuttle/work truck) supported by incentive landscape; ZEV3 passenger van as unique market offering .

Estimates Context

  • S&P Global consensus estimates for Q3 2023 were unavailable for ZEVY due to mapping limitations; as such, beat/miss analysis versus Street is not possible at this time. Values retrieved from S&P Global.
MetricQ3 2023 ActualQ3 2023 ConsensusBeat/Miss
Revenue ($USD Millions)$12.366 N/AN/A
Diluted EPS ($USD)$(7.84) N/AN/A
Adjusted EBITDA ($USD Millions)$(39.255) N/AN/A

Key Takeaways for Investors

  • Mixed print: Record revenue and unit sales, but significant gross loss and a large net loss driven by inventory write-downs and asset impairments; watch for margin inflection as mix shifts to ZEV4 and Mobile DCFC in 2024 .
  • Liquidity overhang: Cash dropped to $6.0M; management flagged going-concern risks absent near-term financing or strategic transactions—this is the dominant stock narrative until capital secured .
  • Product momentum: ZEV4 school/shuttle buses and Mobile DC Fast Charger show traction; customer feedback strong and school bus incentives supportive of demand .
  • Operational focus: Replacement of legacy finished goods with higher-margin products and labor/cost-downs should gradually improve gross margin; near-term results remain sensitive to incentive timing and supply chain cadence .
  • Order diversity: Beyond the Macnab order cited earlier, sales appear diversified across many customers, reducing single-account concentration risk, with school buses a strong second-half theme in 2023 .
  • Regulatory tailwinds: CARB Advanced Clean Fleets and similar mandates, plus incentives in the U.S./Canada, underpin medium-term demand despite elongated sales cycles .
  • Trading setup: Near-term stock action likely driven by financing headlines and liquidity runway vs. operational milestones (school bus deliveries, DCFC deployments). Any capital raise or strategic partnership could be a catalyst; absence of funding would be a negative.

Appendix: Additional Q3 2023 Press Release

  • Production update: “Produced 55 units during the quarter, all of which were complete vehicles” and expected record revenue to be reported in November .