Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Canoo Inc (GOEV, Financial) has successfully delivered LDV 190 vehicles to the USPS, showcasing their ability to customize configurations for specific customer use cases.
- The company has expanded its market reach by delivering vehicles to Saudi Arabia for Red Sea Global, aligning with the Crown Prince's Vision 2030 to diversify the economy.
- Canoo Inc (GOEV) has been recognized with The One To Watch annual award at the Great British Fleet Event, indicating positive reception and potential in the UK market.
- The company has achieved a significant reduction in research and development expenses, down 44% from the previous year, reflecting improved capital efficiency.
- Canoo Inc (GOEV) has raised approximately $662 million in financing since the beginning of 2022, demonstrating strong access to capital and investor confidence.
Negative Points
- Supply chain challenges continue to impact Canoo Inc (GOEV), affecting the pace of manufacturing and scale-up activities.
- The company reported a net loss, with a negative adjusted EBITDA of $48.3 million for Q1 2024, although this is an improvement from previous periods.
- Canoo Inc (GOEV) faces the need to align its supply chain and finalize capital requirements to meet operational goals, which is critical for achieving desired production run rates.
- Despite reductions, the company still operates at a cash outflow, with $47.5 million used in operations during Q1 2024.
- The company's focus on commercial, government, and military segments, while strategic, limits exposure to the broader consumer market, which could affect potential revenue streams.
Q & A Highlights
Q: Can we talk a little bit about the USPS and the expectations for an RFP to come and when timing and what type of magnitude do you think that could be?
A: Tony Aquila, CEO of Canoo Inc., responded that the USPS is very focused on executing their plan with significant opportunities anticipated. He highlighted the tough market conditions given to Canoo to prove their capabilities, expressing gratitude and optimism for future updates based on the USPS's allocated initiative and timeline.
Q: Can you provide an update on Walmart?
A: Tony Aquila mentioned that while specific details couldn't be disclosed, Canoo continues to refine and focus on Walmart's business model, which is well organized and long-term oriented. More information will be shared when permissible.
Q: On the supply chain, you mentioned it remains challenging. We still have the guidance out there for $50 million to $100 million. What needs to be done on the supply chain to get there?
A: Tony Aquila explained that aligning the supply chain is crucial and noted that securing capital would have accelerated progress. He emphasized the strategic purchase of manufacturing equipment at significantly reduced costs, which impacts the bottom line positively.
Q: Can you talk about the Saudi Arabia opportunity and just like how you’re thinking about that with obviously a first deal and then what that could ultimately be?
A: Tony Aquila expressed high regard for the vision of Saudi Arabia's Crown Prince and the potential for significant market growth in the region. He highlighted the strategic importance of aligning with regions that have ecological and economic development goals.
Q: With respect to this Analyst Day coming up, are there any milestones or catalysts that we should be aware of that you could potentially sort of announce or disclose around that timing?
A: Tony Aquila hinted at a unique experience for attendees of the Analyst Day, emphasizing the robustness of Canoo's products and the company's focus on closing gaps in supply chain and capital. He stressed the importance of non-dilutive capital and strategic long-term customer relationships.
Q: Battery sourcing and everything there was this news today. Biden is increasing the tariff on batteries from China. I believe it’s at the level of cells. How would you expect that to impact you?
A: Tony Aquila clarified that Canoo has strategically moved away from reliance on Chinese batteries and components, focusing instead on core allied nations and domestic manufacturing. He sees this as a competitive advantage, especially given the geopolitical landscape affecting technology and supply chains.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
