8-K: LiveWire Group Reports 2024 Full Year Results, Plans to Reduce Cash Burn by 40% in 2025

LiveWire Group reports a decrease in net loss for 2024 and aims to reduce cash burn significantly in 2025.

Summary

• LiveWire Group, Inc. reported its fourth quarter and full year 2024 financial results.
• The company is focusing on repositioning the business for 2025 and expects to reduce its cash burn by 40% or more compared to 2024.
• Consolidated revenue for 2024 was $26.6 million, a 30% decrease compared to $38.0 million in 2023.
• The net loss for 2024 was $93.9 million, an improvement from the $109.6 million loss in 2023.
• Electric motorcycle revenue decreased to $8.4 million in 2024 from $11.5 million in 2023.
• STACYC revenue decreased to $18.3 million from $26.5 million in the previous year.
• The company sold 612 electric motorcycle units in 2024, a 7% decrease year-over-year.
• Electric balance bike (STACYC) unit sales decreased by 42% to 18,549 units.
• For 2025, LiveWire expects electric motorcycle sales of 1,000 to 1,500 units and an operating loss between $70 and $80 million.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is reducing losses and streamlining operations, revenue is down significantly and a substantial operating loss is projected for the next year. The focus on reducing cash burn is a positive sign, but the overall financial picture remains challenging.

Positives

• LiveWire plans to reduce cash burn by 40% or more in 2025.
• The company completed the consolidation of business operations in Milwaukee, Wisconsin.
• Selling, administrative, and engineering expenses decreased by $12.6 million.
• The consolidated operating loss decreased by $5.6 million, or 5%, from 2023.
• Net loss decreased by $15.7 million year-over-year.
• Fourth quarter unit sales of electric motorcycles increased by 138% compared to the third quarter of 2024.

Negatives

• Consolidated revenue decreased by 30% from 2023 to $26.6 million.
• Electric motorcycle revenue decreased by 27% to $8.4 million.
• STACYC revenue decreased by 31% to $18.3 million.
• Electric balance bike unit sales decreased by 42% to 18,549 units.
• STACYC segment operating loss increased significantly from $0.6 million profit in 2023 to $4.9 million loss in 2024.
• The company expects an operating loss of $70 to $80 million for 2025.

Risks

• The company has a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future.
• There are risks associated with developing and manufacturing electric vehicles of sufficient quality and appeal to customers on schedule and on a large scale.
• The company faces challenges as a pioneer in the highly-competitive and rapidly evolving electric vehicle industry.
• The company's future performance is subject to numerous risks, including those related to funding, strategy execution, competition, and supply chain management.
• The company's dependency on Harley-Davidson for certain services poses a risk if those arrangements terminate.

Future Outlook

For the full year 2025, the company expects electric motorcycle sales of 1,000 to 1,500 revenue units and an operating loss of $70 to $80 million. They also expect to reduce cash burn by 40% or more compared to 2024.

Management Comments

• Karim Donnez, CEO, stated that LiveWire undertook several initiatives to navigate market dynamics and reposition the business for 2025.
• Karim Donnez emphasized the company's focus on improving business fundamentals and positioning for long-term success.

Industry Context

LiveWire is operating in the rapidly evolving electric vehicle industry and is focused on the electric motorcycle sector. The company is leveraging its relationship with Harley-Davidson and its experience in the EV sector to develop technology and lead the transformation of motorcycling.

Comparison to Industry Standards

• It's difficult to directly compare LiveWire's performance to industry standards without specific data on competitors in the electric motorcycle market.
• However, companies like Zero Motorcycles and Energica are key players in the electric motorcycle space, and comparing their growth rates, revenue, and profitability would provide a benchmark.
• Tesla's success in the electric car market could be a aspirational benchmark, but the motorcycle market has different dynamics.
• Comparing LiveWire's operating loss and cash burn to those of other early-stage EV companies would also be relevant.

Stakeholder Impact

• Shareholders may be concerned about the decrease in revenue and the projected operating loss for 2025.
• Employees may be affected by the company's streamlining of headcount.
• Customers will be impacted by the company's product development and go-to-market strategy.
• Suppliers may be affected by changes in the company's production and supply chain.

Next Steps

• The company plans to continue establishing its leadership in the EV space.
• LiveWire will continue to relentlessly improve the fundamentals of the business and position itself for long-term success.
• LiveWire leadership will be joining the Harley-Davidson, Inc. audio webcast to discuss the results, developments in the business, and updates to the company's outlook.

Key Dates

Keywords

LiveWire, electric motorcycles, STACYC, financial results, EV, revenue, operating loss, cash burn