Lightning eMotors, Inc.

For Q2 2023, Lightning reported GAAP revenue of $7.9 million, its second-highest quarterly revenue ever, and adjusted revenue of $8.2 million on sales of 70 units. It produced 46 units during the quarter. Adjusted EBITDA loss was $17.1 million versus a $13.9 million loss in the prior-year period, with the decline tied mainly to a larger gross loss on higher cost of revenues. Lightning ended Q2 with $12.6 million in cash and cash equivalents and $57 million in net inventory. For 2023, management guided revenue to $35 million to $45 million, unit sales of 300 to 350, and production of 200 to 230 units, while noting it lowered the top end of revenue guidance from $50 million to $45 million to conserve cash.

Tim Reeser framed Q2 as a solid quarter, highlighting the ZEV4 ramp, positive customer response, and repeat orders after the Romeo battery recall disruptions in the prior two quarters. He emphasized the company’s focus on near-term ZEV4 vehicles and Mobile DC Fast Charger products, while describing the Lightning eChassis as the longer-term growth platform. He also pointed to incentives and California’s Advanced Clean Fleets Regulation as meaningful demand drivers and remained optimistic about the commercial EV market and Lightning’s position in it.

David Agatston said the quarter’s $7.9 million of GAAP revenue and $8.2 million of adjusted revenue reflected initial ZEV4 school bus success and continued ZEV3 inventory sales. He noted Lightning had $12.6 million of cash and cash equivalents at quarter-end, $57 million of net inventory, and expects inventory drawdown to improve cash flow; he also said $20 million to $25 million of the inventory was finished goods that can be sold off. He said the company has approximately $47 million left in the original Yorkville commitment, still needs additional capital, and expects to keep reducing expenses and conserving cash.

Analysts focused on battery supplier risk, gross margin timing, California regulation demand, and second-half cash generation. Management said customers are asking about the Proterra Chapter 11 situation, but there have been no canceled deals or lost orders so far, and Lightning’s multi-source battery strategy gives it alternatives including CATL. On margins, management said it would not expect positive gross margin this year and instead expects improvement, with positive gross margin likely in the first half of 2024 as ZEV4 mix and lower battery/motor costs help. On liquidity, David said the company has multiple funding options, including Yorkville and Lincoln Park, and is actively working with advisers on financing, recapitalization, strategic partnerships, or a sale.