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EV truck manufacturer Nikola (NASDAQ:NKLA) reported Q2 CY2024 results topping analysts' expectations, with revenue up 104% year on year to $31.32 million. It made a non-GAAP loss of $2.67 per share, improving from its loss of $9.22 per share in the same quarter last year.
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Nikola (NKLA) Q2 CY2024 Highlights:
- Revenue: $31.32 million vs analyst estimates of $26.19 million (19.6% beat)
- Wholesaled 72 hydrogen fuel cell electric vehicles in Q2, exceeding the high-end of guidance
- Adjusted EBITDA: -$109.4 million vs analyst estimates of -$111.3 million (beat)
- EPS (non-GAAP): -$2.67 vs analyst estimates of -$2.73
- Free Cash Flow was -$148.3 million compared to -$132.1 million in the previous quarter
- Market Capitalization: $352.7 million
Seeking to transform the heavy-duty transportation industry, Nikola (NASDAQ:NKLA) develops and manufactures zero-emission trucks.
Automobile ManufacturersMuch capital investment and technical know-how are needed to manufacture functional, safe, and aesthetically pleasing automobiles for the mass market. Barriers to entry are therefore high, and auto manufacturers with economies of scale can boast strong economic moats. However, this doesn’t insulate them from new entrants, as electric vehicles (EVs) have entered the market and are upending it. This has forced established manufacturers to not only contend with emerging EV-first competitors but also decide how much they want to invest in these disruptive technologies, which will likely cannibalize their legacy offerings.
Sales GrowthReviewing a company's long-term performance can reveal insights into its business quality. Any business can have short-term success, but a top-tier one tends to sustain growth for years. Luckily, Nikola's sales grew at an incredible 209% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows Nikola's offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Nikola's annualized revenue growth of 39.2% over the last two years is below its five-year trend, but we still think the results were good and suggest demand was strong.
This quarter, Nikola reported magnificent year-on-year revenue growth of 104%, and its $31.32 million of revenue beat Wall Street's estimates by 19.6%. Looking ahead, Wall Street expects sales to grow 461% over the next 12 months, an acceleration from this quarter.
EPSAnalyzing long-term revenue trends tells us about a company's historical growth, but the long-term change in its earnings per share (EPS) points to the profitability of that growth–for example, a company could inflate its sales through excessive spending on advertising and promotions.
Although Nikola's full-year earnings are still negative, it reduced its losses and improved its EPS by 30.3% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.
In Q2, Nikola reported EPS at negative $2.67, up from negative $9.22 in the same quarter last year. This print beat analysts' estimates by 2.3%. Over the next 12 months, Wall Street expects Nikola to improve its earnings losses. Analysts are projecting its EPS of negative $17.82 in the last year to advance to negative $8.48.
Key Takeaways from Nikola's Q2 Results We were impressed by how significantly Nikola blew past analysts' revenue expectations this quarter. Adjusted EBITDA loss was also better than expected. The company sold (wholesale) 72 hydrogen fuel cell electric vehicles in Q2, exceeding the high-end of previous guidance, which shows demand momentum. Zooming out, while the company still lacks scale and profits, we think this quarter featured some important positives. The stock traded up 10.5% to $8.62 immediately following the results.
