Canoo Stock Falls Over 28% After Significantly Missing Revenue in Q4 Results
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Canoo Stock Falls Over 28% After Significantly Missing Revenue in Q4 Results

Canoo reported an EPS of -$1.73 and revenue of $370k for Q4 against an expected EPS of -$1.77 and $723k in revenue.
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Canoo Inc. (NASDAQ: GOEV), a cutting-edge mobility company, announced its fourth-quarter and full-year financial results for 2023.

The company’s strategic initiatives, including commencing commercial fleet customer deliveries and securing a pivotal USPS agreement, show its potential in the electric vehicle (EV) market.

Canoo’s leadership aims to drive the company towards its production and financial goals, with a keen focus on disciplined capital allocation and supply chain optimization. However, the quarter’s results were worrying, as the company significantly missed revenue expectations despite reporting a better EPS than expected.

Canoo Reports Improvement in Adjusted EBITDA in 2024

The fourth quarter of 2023 was pivotal for Canoo as it embarked on delivering its first commercial fleet vehicles, a significant milestone reflecting the company’s transition from development to production.

This period also saw Canoo secure a notable agreement with the United States Postal Service for the purchase of Right Hand Drive LDV 190s.

Financially, Canoo reported a substantial improvement in its adjusted EBITDA, reducing its annual loss from $(408.6) million in 2022 to $(224.4) million in 2023. This 45% improvement is a testament to the company’s enhanced operational efficiency and strategic financial management.

Additionally, Canoo achieved a 40% reduction in capital expenditures compared to its already reduced second-half guidance for 2023, highlighting its successful efforts in optimizing spending and leveraging acquired manufacturing assets at a discount.

Canoo Misses Revenue by Over $353k in Q4

Against market expectations, Canoo’s performance in the fourth quarter of 2023 was notably weak. Analysts had projected an EPS of -$1.77 and revenue of $723,800 for the quarter.

Canoo’s actual performance, with reported revenue of $370,000, failed these revenue expectations by a massive margin. However, the improvement in adjusted EBITDA and the reduction in net loss year over year illustrate Canoo’s progress in aligning its operational execution with financial health despite the complexities of the EV industry and the broader economic environment.

Canoo Expects Annual Revenue Between $50M to $100M

Looking ahead to 2024, Canoo has set ambitious targets reflecting its confidence in its strategic direction and operational capabilities.

The company forecasts annual revenue from $50 million to $100 million, alongside a quarterly cash outflow of $45 million to $75 million. These projections underscore Canoo’s focus on scaling its production capabilities, optimizing its cash flow, and achieving sustainable growth.

The guidance does not specify capital expenditures, as Canoo continues to explore opportunities to acquire distressed assets, indicating a flexible and opportunistic approach to investment and expansion. This forward-looking perspective, combined with the strategic milestones achieved in 2023, positions Canoo to capitalize on the growing demand for electric vehicles and to navigate the challenges of the evolving automotive landscape.

Strategic Milestones and Operational Highlights

Canoo’s achievements in the fourth quarter of 2023, including the start of commercial fleet deliveries and the strategic acquisition of manufacturing assets, mark critical steps in the company’s journey towards becoming a significant player in the EV market.

The designation of its Oklahoma City manufacturing facility as a Foreign Trade Zone opens avenues for international expansion and cost savings, further enhancing Canoo’s competitive edge.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.