8-K: LiveWire Group Reports Reduced Operating Loss in Q1 2025 Amid Market Volatility

LiveWire Group, Inc. announced its first quarter 2025 financial results, highlighting a decrease in operating loss and reduced expenses despite challenges in the electric motorcycle market.

Summary

• LiveWire Group reported its first quarter 2025 financial results, showing a consolidated operating loss decrease of $9.7 million compared to the same quarter in 2024.
• The company's net loss was $19.3 million, an improvement from the $23.6 million loss in the prior year.
• Net cash used during the quarter was reduced by $8.7 million, or 32%, compared to Q1 2024.
• Electric Motorcycles revenue decreased to $0.4 million from $1.2 million in the same quarter last year, with unit sales dropping significantly.
• STACYC revenue also decreased to $2.3 million from $3.7 million due to supply chain issues and decreased sales to third-party distributors.
• The company has withdrawn its previously issued units guidance due to market volatility but is now targeting an operating loss below $60 million, an improvement from the previous guidance of $70-80 million.
• LiveWire expanded into four new European markets: Poland, Portugal, Finland, and Belgium.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While revenue is down, the company is actively reducing costs and improving its operating loss, indicating a proactive approach to challenges. The expansion into new markets is also a positive sign.

Positives

• Operating loss decreased by $9.7 million year-over-year.
• Net loss improved by 18% compared to the same period last year.
• Net cash used during the quarter decreased by 32%.
• Selling, administrative, and engineering expenses were reduced by $7.8 million.
• LiveWire expanded into four new European markets.
• The company secured its first fleet customers.
• The company is now targeting an operating loss below $60 million, down from the previously issued guidance of $70-80 million.

Negatives

• Electric Motorcycles revenue decreased by 66% due to lower unit sales, with motorcycle units sold decreasing by 72% from 117 to 331.
• STACYC revenue decreased by 38% due to supply chain issues and decreased sales to third-party distributors.
• The company withdrew its previously issued units guidance due to market volatility.

Risks

• The company acknowledges ongoing market volatility and evolving macroeconomic conditions.
• The company has a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future.
• The company is dependent on Harley-Davidson for a number of services, including services relating to quality and safety testing.
• The company faces challenges as a pioneer in the highly-competitive and rapidly evolving electric vehicle industry.
• The company is exposed to potential delays in the design, manufacture, financing, regulatory approval, launch and delivery of electric vehicles.

Future Outlook

Due to ongoing market volatility and evolving macroeconomic conditions, the company has withdrawn its previously issued units guidance but is now targeting an operating loss below $60 million, down from the previously issued guidance of $70-80 million.

Management Comments

• Karim Donnez, CEO, stated that the company remains focused on what it can control, with expenses down by over 30% compared to the prior year.
• Karim Donnez highlighted the opening of four new countries in Europe and the introduction of new products.

Industry Context

The announcement acknowledges the limited size of the heavyweight 2-wheel EV market, indicating a focus on cost control and strategic expansion in the face of industry challenges.

Comparison to Industry Standards

• It is difficult to compare LiveWire directly to industry standards due to its unique position as a spin-off from Harley-Davidson and its focus on electric motorcycles.
• However, the company's efforts to reduce operating losses and streamline expenses are in line with industry trends for EV manufacturers, such as Rivian and Lucid, who are also focused on cost reduction to achieve profitability.
• LiveWire's expansion into new European markets is a common strategy among EV companies looking to increase sales and market share, similar to Tesla's global expansion efforts.

Stakeholder Impact

• Shareholders may be concerned about the decrease in revenue but encouraged by the reduction in operating losses.
• Employees may be affected by the cost reduction activities, including streamlined headcount.
• Customers may experience delays in product availability due to supply chain issues.

Next Steps

• The company will continue to focus on cost optimization and strategic expansion.
• LiveWire's financial results, developments in the business and updates to the company's outlook will be shared during the Harley-Davidson, Inc. audio webcast.

Key Dates

Keywords

LiveWire, Electric Motorcycles, STACYC, Financial Results, Operating Loss, Revenue, EV, Electric Vehicles