Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- LiveWire Group Inc (LVWR, Financial) achieved a 46% year-over-year growth in global retail performance, maintaining a 65% market share in the U.S. 50-plus horsepower on-road EV segment.
- The company successfully reduced its cash burn below target for 2024 and expects to reduce 2025 total cash used by operating and investing activities by about 40%.
- LiveWire Group Inc (LVWR) plans to introduce an electric maxi-scooter in the first half of 2026, targeting the European market, which shows commitment to innovation and market expansion.
- The company has taken significant actions to downsize the organization and refocus the product portfolio, aiming to reduce operating losses from $110 million to $70-$80 million.
- LiveWire Group Inc (LVWR) is leveraging its existing S2 platform for new product launches, which helps in reducing costs and improving operational efficiency.
Negative Points
- LiveWire Group Inc (LVWR) reported an operating loss of $110 million for 2024, indicating ongoing financial challenges.
- The company experienced a 31% decline in revenue for the full year 2024 compared to the prior year, highlighting difficulties in the electric motorcycle market.
- Despite growth in the U.S. market, StaCyc total unit sales decreased due to reduced sales to third-party distributors.
- The macroeconomic environment, including high interest rates and inflationary pressures, continues to impact consumer confidence and sales.
- LiveWire Group Inc (LVWR) faces challenges in achieving profitability, with ongoing operating losses and a need for increased demand and adoption of electric vehicles.
Q & A Highlights
Q: Can you elaborate on the expected inventory reduction in the first quarter and its impact on revenue?
A: Jonathan Root, Director, explained that they anticipate a more than 30% reduction in inventory in the first half of the year, with a focus on aligning wholesale shipments accordingly. This will result in a double-digit decline in wholesale in the first half, followed by an increase in the second half to ensure appropriate year-end inventory levels.
Q: What caused the margin surprise in Q4, and what is the retail outlook for 2025?
A: Jonathan Root noted that the margin surprise was due to lower volumes and manufacturing costs. Jochen Zeitz, Chairman, added that they expect a stronger performance in the second half of 2025, driven by ongoing product innovation and the potential for growth in the Touring segment.
Q: How do you plan to achieve margin growth in 2025 despite flat to declining revenues?
A: Jonathan Root stated that they expect slight pricing favorability and improved operating expenses to contribute to margin growth. Although there will be challenges from FX and mix, they anticipate better manufacturing efficiency and cost management.
Q: What is the strategy for LiveWire given the current demand and adoption challenges for electric vehicles?
A: Jochen Zeitz emphasized that they are continuously evaluating LiveWire's performance and have taken steps to reduce operating losses and cash burn. They remain committed to the business but are closely monitoring its progress and market conditions.
Q: Can you provide insights into the international market outlook for 2025?
A: Jonathan Root mentioned that they expect a flat global retail environment, with slight growth anticipated in Asia Pacific. While some European markets face challenges, others like Spain and Italy have shown strength. Overall, they are cautious but see potential for stabilization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
