10-Q: LiveWire Narrows Losses, Secures $75M Loan Amid EV Headwinds

LiveWire Group, Inc. reported a narrower net loss and improved operating results for Q3 2025, driven by cost reductions and strong STACYC segment growth, while securing a new $75 million term loan from Harley-Davidson.

Summary

• Net loss for the three months ended September 30, 2025, improved to $19.395 million, down from $22.694 million in the prior year, reflecting a 14.5% reduction.
• Operating loss decreased by 29.1% to $18.812 million for the three months ended September 30, 2025, compared to $26.525 million in the same period last year.
• Total revenue, net, increased by 28.3% to $5.701 million for the three months ended September 30, 2025, up from $4.445 million in Q3 2024.
• The STACYC segment's revenue surged by 46.2% to $4.731 million, driven by new products (adult pedal assist electric bike) and market expansion, with its operating loss improving by 72.6% to $0.413 million.
• Electric Motorcycles segment revenue decreased by 19.8% to $0.970 million, despite an 85.9% increase in unit sales (from 99 to 184 units), primarily due to new pricing incentives like the 'Twist & Go Promotion'.
• The Electric Motorcycles segment's operating loss improved by 26.4% to $18.399 million, largely due to cost reduction activities, including personnel cuts and reduced fees to Harley-Davidson.
• Cash and cash equivalents decreased significantly to $16.324 million as of September 30, 2025, from $64.437 million at December 31, 2024.
• LiveWire entered into an Amended and Restated Delayed Draw Term Loan Agreement with Harley-Davidson, providing access to up to $75.0 million, to be drawn between November 17, 2025, and December 15, 2025, with a maturity date of December 15, 2027.
• The company sold 251,246 shares of common stock under its At-The-Market (ATM) program for an aggregate offering price of $1.305 million during the three months ended September 30, 2025, with $48.7 million in capacity remaining.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While the company continues to incur significant losses and burn cash, the substantial improvement in net and operating losses, strong growth in the STACYC segment, and securing a $75 million term loan from Harley-Davidson are positive developments. These actions demonstrate progress in cost management and securing necessary liquidity. However, the decline in Electric Motorcycle revenue due to incentives, the significant drop in cash reserves, and management's acknowledgment of slower-than-anticipated EV adoption temper the overall outlook, indicating continued challenges and a reliance on future capital raises.

Positives

• Net loss significantly narrowed by 14.5% for the three months and 19.2% for the nine months ended September 30, 2025, indicating improved financial efficiency.
• Operating loss improved by 29.1% for the three months and 32.2% for the nine months ended September 30, 2025, reflecting successful cost reduction initiatives.
• STACYC segment revenue grew robustly by 46.2% for the three months and 10.0% for the nine months, driven by new products and market expansion.
• STACYC segment operating loss improved substantially by 72.6% for the three months and 53.7% for the nine months, demonstrating progress towards profitability in this segment.
• Secured a new $75.0 million Term Loan from Harley-Davidson, providing crucial liquidity and capital for ongoing operations and future investments.
• Capital expenditures decreased by $3.883 million for the nine months ended September 30, 2025, compared to the prior year, indicating more efficient use of capital.
• Net cash used by operating activities decreased by $26.342 million for the nine months ended September 30, 2025, showing improved operational cash burn.

Negatives

• Cash and cash equivalents significantly declined to $16.324 million as of September 30, 2025, from $64.437 million at December 31, 2024, highlighting continued cash burn.
• Electric Motorcycles segment revenue decreased by 19.8% for the three months and 54.3% for the nine months, despite increased unit sales in Q3, due to significant pricing incentives.
• The company continues to incur net losses and expects to incur significant expenses and continuing losses for the foreseeable future, indicating a prolonged path to profitability.
• Interest income decreased substantially by 86.8% for the three months and 79.4% for the nine months due to a lower balance of money market funds.
• A loss of $0.656 million was recognized from the change in fair value of warrant liabilities for the three and nine months ended September 30, 2025, a negative swing from income in the prior year.
• The company believes electric vehicle adoption is much later than originally anticipated due to a lack of government incentives, less favorable regulatory environment, and slower charging infrastructure expansion.
• The Term Loan from H-D is collateralized by substantially all of the company's assets and includes restrictive covenants that could limit financial and operational flexibility.

Risks

• History of losses and expectation to incur significant expenses and continuing losses for the foreseeable future.
• Risks related to Harley-Davidson, Inc. (H-D) making decisions for its overall benefit that could negatively impact LiveWire's overall business.
• Risks related to LiveWire's relationship with H-D and its impact on LiveWire's other business relationships.
• LiveWire's future capital requirements and ability to obtain funding for its operations and manage costs.
• Risks related to retail partners being unwilling to participate in LiveWire's go-to-market business model or its inability to establish or maintain relationships with customers for its electric vehicles.
• LiveWire's business, expansion plans and opportunities, including its ability to scale its operations and manage its future growth effectively.
• The effects of competition on LiveWire's future business, the pace and depth of electric vehicle adoption generally and its ability to achieve planned competitive advantages.
• LiveWire's ability to execute its business model, including market acceptance of its planned electric vehicles.
• Risks related to LiveWire's limited operating history, the rollout of its business and the timing of expected business milestones.
• Challenges LiveWire faces as a pioneer in the highly-competitive and rapidly-evolving electric vehicle industry.
• LiveWire's ability to leverage contract manufacturers, including H-D and the KYMCO Group, to contract manufacture its electric vehicles.
• Potential delays in the design, manufacture, financing, regulatory approval, launch and delivery of LiveWire's electric vehicles.
• Risks related to building out LiveWire's supply chain, including dependency on single-sourced or limited-source suppliers for critical components like batteries and semiconductor chips.
• Ability to manage and predict the impact that new or adjusted tariffs may have on LiveWire's ability to sell products domestically and internationally, and the cost of raw materials and components.
• LiveWire's ability to rely on third-party and public electric vehicle charging networks.
• LiveWire's ability to attract and retain key personnel.
• Risks related to LiveWire's business and H-D's business overlapping and being perceived as competitors.
• LiveWire's inability to maintain a strong relationship with H-D or to resolve favorably any disputes that may arise between the Company and H-D.
• LiveWire's dependency on H-D for a number of services, including services relating to quality and safety testing, and the significant investment or increased costs if those arrangements terminate.
• Risks related to any decision by LiveWire to electrify H-D products, or the products of any other company.
• LiveWire's expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others.
• Potential harm caused by misappropriation of LiveWire's data and compromises in cybersecurity.
• Changes in laws, regulatory requirements, governmental incentives and fuel and energy prices.
• The impact of health epidemics on LiveWire's business.
• Litigation, regulatory proceedings, complaints, product liability claims and/or adverse judgments.
• The possibility that LiveWire may be adversely affected by other economic, business or competitive factors and/or publicity.
• The Term Loan contains covenants that may restrict LiveWire's business and financing activities.
• If LiveWire does not have or is unable to generate sufficient cash to repay its debt obligations, it would be required to obtain additional debt or equity financing, which may not be available on favorable terms, or at all, negatively impacting its ability to operate and continue as a going concern.

Future Outlook

LiveWire's immediate focus remains on cost improvements, developing future electric motorcycle models, and product innovation. The company acknowledges that electric vehicle adoption is occurring later than initially anticipated due to a lack of government incentives, an unfavorable regulatory environment, and slow charging infrastructure expansion. In response, LiveWire plans to strategically expand its product offerings, including the production of two new 125 cc-equivalent mini-motos (S4 Honcho Trail and Street) in spring 2026, aimed at increasing accessibility and affordability. Management expects current resources, supplemented by the new Term Loan and potential ATM proceeds, to fund operations and capital expenditures for at least the next twelve months, but additional capital will be required to achieve and maintain profitability.

Management Comments

• "LiveWire's focus continues to be on cost improvements, future electric motorcycle models and product innovation and development."
• "Company believes indicators point to a much later electric vehicle adoption than the Company originally anticipated given a lack of government incentives and a less favorable regulatory environment, combined with a slower expansion of charging infrastructure."
• "As the Company evaluates its long-term strategy and product offerings, it will continue to focus on cost savings to reduce cash usage while focusing on developing and producing profitable products to align with evolving customer preferences and broader electric vehicle adoption trends that will allow the Company to continue to reduce operating losses and fund its operations through profitability."
• "Based on its current plans and projections, the Company expects that its current resources will be sufficient to fund its ongoing operations and capital expenditure requirements for at least the next twelve months from the issuance date of these consolidated financial statements."
• "The Company will require additional capital in order to continue to finance its operations and execute its business plan before eventually attaining and maintaining profitable operations."
• "The amount and timing of future funding requirements will depend on many factors, including the pace and results of the Companys product development and sales efforts, as well as timing and size of funds raised under the ATM Program or other possible financing vehicles."
• "The Company estimates capital expenditures to be between $4 million and $5 million in 2025."

Industry Context

The electric vehicle (EV) segment of the powersports and discretionary leisure industries faces significant headwinds, including slower-than-anticipated EV adoption. This is attributed to a lack of government incentives, a less favorable regulatory environment, and a slow expansion of charging infrastructure. LiveWire's strategy to introduce more accessible and affordable mini-motos (S4 Honcho Trail and Street) in 2026 aligns with a potential shift towards broader market appeal and lower price points to stimulate adoption in a challenging market. The company's continued focus on cost reduction is a common response across industries facing market slowdowns and intense competition.

Comparison to Industry Standards

• NA

Corporate Governance

Legal Proceedings

• The company is subject to claims related to product and other commercial matters.
• In 2024, the company received an unfavorable arbitration ruling related to a supplier claim, resulting in a payment of $1.802 million to the supplier in the nine months ended September 30, 2025.

Related Party Transactions

• Cost of goods sold with H-D: $4.041 million for the three months and $5.684 million for the nine months ended September 30, 2025.
• Selling, administrative and engineering expense with H-D: $1.260 million for the three months and $3.995 million for the nine months ended September 30, 2025.
• Accounts payable to H-D: $7.485 million as of September 30, 2025, including $5.744 million for excess inventory components.
• Accounts receivable from H-D: $2 thousand as of September 30, 2025.
• Owes Harley-Davidson Financial Services (HDFS) $1.064 million for amounts remitted to dealers on behalf of the company related to returns and incentive payments.
• Amended and Restated Delayed Draw Term Loan Agreement with H-D provides access to $75.0 million, to be drawn between November 17, 2025, and December 15, 2025, with a maturity date of December 15, 2027.
• Lease agreement with H-D for Milwaukee space, amended September 26, 2025, includes a $500 thousand lease incentive from H-D for tenant improvements, with timing extended to 2026.
• Termination of a sublease for a Product Development Center with H-D effective February 28, 2025.
• Termination of a month-to-month office space lease with H-D effective January 31, 2025.
• New lease agreement with H-D to sublease office space in California, expiring October 31, 2027.

Stakeholder Impact

• **Shareholders**: Experience continued net losses and cash burn, but also see improved operating efficiency and secured debt financing, which could stabilize the company's short-term liquidity. Dilution risk from the ATM program and potential equity conversion of the Term Loan if not repaid.
• **Employees**: Benefit from cost reduction initiatives that aim for long-term sustainability, but also face potential headcount reductions as seen in prior restructuring efforts.
• **Customers**: Benefit from new pricing incentives on electric motorcycles and expanded product offerings (e.g., new mini-motos) aimed at increasing accessibility and affordability.
• **Suppliers**: The company's dependency on single/limited-source suppliers for critical components creates risk for both LiveWire and its suppliers. An unfavorable arbitration ruling resulted in a payment to a supplier.
• **Creditors (Harley-Davidson)**: Harley-Davidson, as the primary lender, has significant influence and security interest over LiveWire's assets, ensuring its position as a key stakeholder and potentially impacting other creditors.

Next Steps

• Draw the full $75.0 million from the Amended and Restated Delayed Draw Term Loan Agreement between November 17, 2025, and December 15, 2025.
• Continue to focus on cost improvements, future electric motorcycle models, and product innovation and development.
• Strategically expand product offerings, including the planned production of two new 125 cc-equivalent mini-motos (S4 Honcho Trail and Street) in spring 2026.
• Continue to explore additional means for raising capital to support ongoing operations and future investments.
• Focus on the development of profitable products while reducing cash usage.
• Mandatory prepayment of the Term Loan principal from the first $10.0 million of net ATM proceeds.

Key Dates

Recommendation

LiveWire Group, Inc. presents a mixed financial picture. While the company has demonstrated significant improvement in reducing its net and operating losses, particularly through cost reduction and strong performance in its STACYC segment, it continues to operate at a substantial loss and burn cash. The securing of a $75 million term loan from Harley-Davidson provides critical short-term liquidity, but it comes with restrictive covenants and is collateralized by nearly all company assets, highlighting ongoing financial fragility. The Electric Motorcycles segment faces challenges with declining revenue despite increased unit sales, driven by aggressive incentives, and the broader EV market adoption is slower than anticipated. For a seasoned investor, the company remains in an early growth stage with a high degree of uncertainty regarding its path to sustained profitability. The current valuation likely reflects both the potential of the EV market and the inherent risks. A 'hold' recommendation is appropriate, acknowledging the positive steps in cost control and financing, but also the significant market headwinds, continued cash burn, and the need for further capital before achieving self-sufficiency.

Keywords

Electric Motorcycles, EV, STACYC, Harley-Davidson, Financial Results, 10-Q, Quarterly Report, LiveWire, Electric Bikes, Motorcycle Industry, Financial Performance, Capital Raise, Debt Financing, Cost Reduction, Market Trends