Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Exro Technologies Inc (EXROF, Financial) achieved a revenue growth of 108% in Q3 2024, driven by the delivery of a record 74 E propulsion systems.
- The company successfully reduced costs, achieving over 18% savings on their systems since April 2024.
- Exro Technologies Inc (EXROF) improved its unit cost of goods sold by more than 20% over the last quarter.
- The integration of Exro's coil driver into all propulsion systems remains on track for the second half of 2025.
- The company has made significant progress in its strategic goals, including cost savings and integration with OEM partners like Hino and MAC.
Negative Points
- Exro Technologies Inc (EXROF) faced challenges in meeting its initial target of delivering 250 units post-merger, achieving less than half of that goal.
- The company had to write down $211 million in goodwill and intangible assets due to a decline in share price and decreased volume outlook.
- Despite revenue growth, Exro Technologies Inc (EXROF) reported a gross profit loss of $1.7 million in Q3 2024.
- The company is still working through legacy C acquisition payables, which increased accounts payable to $31.3 million.
- Exro Technologies Inc (EXROF) continues to face challenges in supply chain efficiency, impacting its ability to ramp up production.
Q & A Highlights
Q: Can you talk about how the production ramp is progressing, especially considering the initial expectations for 250 units?
A: (CEO) The software issues have been fully resolved and are no longer a barrier. We are set up for continued growth into the first quarter of 2025, with shipments expected to continue increasing quarter over quarter.
Q: Regarding the C Electric write-down, can you explain what has changed in expectations since the transaction?
A: (CFO) The write-down was primarily driven by the depreciation of our share price and lower forecasts than initially anticipated. The share price dropped significantly from the time of the acquisition announcement to the end of the quarter, which was a major factor.
Q: Are there any plans for a reverse split or share consolidation given the current share price?
A: (CFO) Currently, a reverse split or share consolidation is not a topic of conversation at the board or management level. We are focused on rebuilding value through operational execution.
Q: Can you provide details on the trajectory of the 74 systems shipped during the quarter?
A: (CEO) There was an acceleration in shipments towards the end of the quarter as efficiencies improved and inventory caught up with the supply chain. We expect this ramp to continue into the fourth quarter.
Q: Is the Q3 OpEx a good representation of future expectations, or are there further cost-cutting measures in place?
A: (CFO) We are continuing our cost-out efforts, including additional cuts made in October that will reflect in Q4 results. We anticipate further reductions in costs across the business as we optimize operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
