Workhorse Group’s Earnings Call: Cautious Optimism Amid Challenges

Workhorse Group ((WKHS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Workhorse Group’s recent earnings call painted a picture of cautious optimism, balancing significant achievements with ongoing challenges. The company reported notable advancements in orders, partnerships, cost reductions, and product expansions. However, these positives were tempered by decreased sales, financial losses, and prevailing market uncertainties, suggesting a measured outlook for future growth.

W56 Step Van Orders and Deliveries

Workhorse Group announced the booking of purchase orders for 27 W56 step vans, with deliveries anticipated within the next 60 to 120 days. Additionally, the company successfully delivered FedEx’s 2024 order of W56 step vans, expanding their presence to 12 FedEx terminals, highlighting their commitment to fulfilling client needs and expanding their market footprint.

Fleet Expansion and Partnerships

The company has forged new partnerships with Gateway Fleets and various certified service networks. This strategic move has expanded their dealer and service networks, particularly in key metropolitan markets, enhancing their ability to reach more customers and provide comprehensive service solutions.

Cost Reduction Achievements

Workhorse Group achieved a significant reduction in operating expenses, cutting $9.3 million year-over-year. They also managed to reduce their monthly operating cash to below $3 million, reflecting their focus on maintaining financial discipline and improving operational efficiency.

Product and Market Expansion

The company expanded its W56 lineup and received certification for sales in Canada. A notable achievement was the successful completion of a 2,400-mile cross-country trip with the W56, showcasing the vehicle’s reliability and performance capabilities.

Production and Delivery Milestones

Workhorse is distinguished as the only North American OEM producing electric step vans in-house, with six Class 4 to 6 models currently in production. This capability provides them with a competitive edge in quality control and lead times.

Decreased Sales and Revenue

Despite these achievements, Workhorse reported decreased sales for Q1 2025, with revenue falling to $600,000, down from $1.3 million in the previous year. This decline underscores the financial challenges the company faces in the current market environment.

Loss and Financial Challenges

The company continues to grapple with net losses, exacerbated by rising interest expenses due to higher convertible note balances. These financial challenges highlight the need for strategic financial management to navigate the current economic landscape.

Market Uncertainties and No Revenue Guidance

Workhorse cited uncertainties in the EV landscape and refrained from providing specific annual revenue guidance. This cautious approach reflects the volatile nature of the market and the company’s focus on adapting to changing conditions.

Forward-Looking Guidance

Looking ahead, Workhorse Group remains focused on strategic growth and disciplined execution. They aim to ship more vehicles in Q2 than in the entire previous year, supported by a $9.3 million reduction in operating expenses and increased sales momentum. With a cash position of $2.6 million and $27.9 million in restricted cash, the company is poised to leverage its unique position as a North American OEM producing electric step vans in-house to secure long-term growth.

In summary, Workhorse Group’s earnings call highlighted a blend of achievements and challenges, with a cautious yet optimistic outlook for the future. The company’s strategic focus on cost reduction, partnerships, and market expansion positions them well to navigate the uncertainties of the EV market, although financial challenges remain a concern.