Exro Technologies (EXRO) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 revenue of CAD 11 million, more than doubling Q2 results, driven by delivery of 74 e-propulsion systems to OEMs, a 106% sequential increase.

• Announced Stellantis N.V. as a new automotive passenger vehicle OEM partner, ending a year-long nondisclosure.

• Focused on core strategy: revenue growth, profitability, and technology integration, with significant cost reductions and operational improvements post-SEA Electric merger.

• Achieved cumulative annual business cost-savings exceeding US $15 million through operational efficiencies.

• Integration challenges from the merger were addressed, leading to improved quality metrics, supplier agreements, and consistent quarter-over-quarter growth.

Financial highlights

• Q3 revenue reached CAD 11 million, up from CAD 5.3 million in Q2, primarily from 74 system deliveries.

• Cost of goods sold was CAD 12.6 million, resulting in a gross profit loss (excluding non-cash inventory provision) of CAD 1.7 million, improved from a CAD 2.7 million loss in Q2.

• Payroll and SG&A expenses were CAD 8.1 million and CAD 3.4 million, down 7% and 35% quarter over quarter, respectively.

• Inventory decreased to CAD 27.9 million from CAD 32 million in Q2, reflecting conversion to revenue.

• Completed a public offering, raising $25 million in proceeds.

Outlook and guidance

• Expect continued quarter-over-quarter growth in deliveries and revenue into Q4 and 2025, with software issues resolved and production ramping.

• Targeting an additional 20% reduction in bill of materials by end of Q2 2025.

• Focus remains on driving profitability through execution by the end of next year.

• Guidance and 2025 business plan to be detailed at Analyst Day.

• Positioned to penetrate the commercial truck market and build on Q3 momentum.