Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Canoo Inc (GOEV, Financial) achieved its largest revenue quarter at $605,000, marking significant growth.
- The company successfully delivered its first right-hand drive configured LDV 190s to the USPS, demonstrating product adaptability.
- Canoo Inc (GOEV) reduced its cash outflow by approximately 50% compared to Q2 2023, showcasing improved financial efficiency.
- The company received advanced manufacturing assets from Arrival UK, enhancing its vertical integration capabilities.
- Canoo Inc (GOEV) was added to the Russell Indexes, increasing its attractiveness to institutional investors.
Negative Points
- Despite the revenue growth, Canoo Inc (GOEV) still reported a negative adjusted EBITDA of $38.6 million for Q2 2024.
- The company continues to face challenges in securing financing, reflecting the volatile capital markets.
- Canoo Inc (GOEV) has significant cash constraints, ending the quarter with only $19.1 million in cash, cash equivalents, and restricted cash.
- The company is still in the process of harmonizing its supply chain, which could delay production and delivery schedules.
- There is ongoing uncertainty regarding the finalization of customer configurations and production allocations for 2025 and 2026.
Q & A Highlights
Q: In terms of the capital raise, do you expect it's going to be the same every quarter, given the needs, whatever the capital you'll be able to raise and that philosophy will continue for the next, at least few quarters?
A: Tony Aquila, CEO: We have been criticized for raising incremental capital, but we believe it's necessary to fund the company based on milestones and key events. This approach has started to favor our business operations, and we will continue this strategy during volatile capital markets.
Q: When you think about order flow and demand, does it feel like the conversations are changing relative to six months ago?
A: Tony Aquila, CEO: Our conversations have steadily progressed, especially with our focus on fleet, government, and military customers. These markets are policy-driven and resistant to economic fluctuations, which has helped us advance discussions down to specific configurations.
Q: Can you give us a walk-through of where we are supply chain-wise?
A: Tony Aquila, CEO: We have harmonized our supply chain and hosted an event with 52% of our BOM suppliers. They saw our factory and understood our phased scaling approach. We are now focusing on locking down high-volume customer specs before fully integrating our capital into the supply chain.
Q: What do you think the timing of the delivery schedule announcement might be?
A: Tony Aquila, CEO: We work closely with our customers and let them decide what to communicate. We anticipate some announcements in the coming quarter as we finalize specifications and schedules with our key customers.
Q: The R&D and SG&A expenses were well controlled this quarter. Should we expect similar levels going forward?
A: Tony Aquila, CEO: We are pacing ourselves and will be disciplined about deploying capital. While there may be slight variations based on capital inflows, we are focused on effective deployment and continuously tightening our belt.
Q: Are there any specific things you are prioritizing as you look to allocate production in 2025?
A: Tony Aquila, CEO: We are focusing on a few high-volume, multiyear customers with implementation schedules that align with our ability to scale. This approach helps us keep costs under control and ensures we are profitable.
Q: What milestones should we expect from Canoo as external observers of your progress?
A: Tony Aquila, CEO: We see ourselves as a competitive extension of our customers' businesses. We anticipate some customers will announce their plans in the coming quarter, but we respect their decision on what to communicate.
Q: Can you update us on the relationship with Walmart and how we should think about deliveries over time?
A: Tony Aquila, CEO: Our customers appreciate our no-nonsense approach and long-term view. We have focused on customers with high return on capital and no range anxiety or charging issues. This alignment has helped us build strong relationships.
Q: With respect to the equipment needed to complete the production setup, are there any other critical pieces you need?
A: Tony Aquila, CEO: We continue to acquire equipment at low costs and have most of what we need in Oklahoma City. We are also hiring and relocating a workforce that is impressed with the local environment and cost of living.
Q: How should we think about the benefits of the free trade zone approval in the near term?
A: Tony Aquila, CEO: The free trade zone allows us to supply our MPP1 and create assembly jobs in the UK. It also enables us to bring supply chain partners into the zone, reducing costs and facilitating geographic expansion.
Q: Can you talk about the OTA update capabilities and what needs to be done to finish this feature?
A: Tony Aquila, CEO: Our software team has successfully deployed OTA updates, often within 48 hours of customer requests. This capability helps us refine engineering and understand warranty schedules, enhancing the overall customer experience.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
