Workhorse Group ((WKHS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Workhorse Group’s recent earnings call painted a picture of optimism and strategic advancement, despite some underlying challenges. The company, along with its merger partner Motiv, showcased a robust second quarter performance with record truck shipments and notable financial improvements. While increased costs of sales and reliance on external financing were highlighted as challenges, the overall sentiment was positive, with the benefits seemingly outweighing the negatives.
Record Truck Shipments
In the second quarter of 2025, Workhorse achieved a significant milestone by securing 36 purchase orders for their W56 step vans and shipping a record 32 trucks. This marks a substantial increase from the previous year’s single truck shipment, underscoring the company’s growing market demand and operational success.
Financial Improvement
Workhorse reported a $4.8 million increase in sales, attributed to the higher shipments of the W56 model. Additionally, the company managed to decrease its operating expenses by $7 million year-over-year, reflecting improved financial management and operational efficiency.
Strategic Merger with Motiv
The merger between Workhorse and Motiv is set to create a leading North American medium-duty electric truck OEM. By combining their product portfolios and financial strengths, the companies aim to enhance their market position and financial stability.
Cost Reductions
The company successfully reduced its SG&A expenses by $6.3 million compared to the previous year, alongside a $700,000 decrease in research and development expenses, indicating a focused effort on cost management.
Reduced Net Loss
Workhorse’s net loss for the first half of 2025 improved significantly, dropping from $55.5 million in 2024 to $35.4 million in 2025. This improvement was supported by a $16.3 million reduction in operating expenses year-over-year.
Increased Cost of Sales
Despite the positive financial strides, the cost of sales for the second quarter of 2025 rose to $13.1 million, a $5.8 million increase from the previous year. This was driven by higher sales volumes and increased inventory reserves.
Operational Challenges
Workhorse faces operational challenges due to shifting political landscapes and changing government regulations, which have delayed fleet customer adoption rates, impacting the company’s growth trajectory.
Dependence on External Financing
The combined entity of Workhorse and Motiv will need to seek additional financing to support their strategic plans in 2026 and beyond, highlighting ongoing financial challenges and the need for external capital.
Forward-Looking Guidance
During the joint conference call, Workhorse and Motiv emphasized their strategic merger and financial improvements. With the merger expected to close in Q4 2025, Workhorse shareholders will own approximately 26.5% of the combined company. The merger aims to bolster financial positioning, operational efficiency, and market reach in the medium-duty electric vehicle segment.
In summary, Workhorse Group’s earnings call reflected a positive outlook with strategic advancements and financial improvements, despite some challenges. The company’s record truck shipments and the strategic merger with Motiv are poised to enhance its market position, while ongoing financial and operational challenges remain areas to watch.