TAIPEI, Taiwan, August 10, 2023 – Gogoro Inc. (Nasdaq: GGR), a global technology leader in battery swapping ecosystems that enable sustainable mobility solutions for cities, today released its financial results for its second quarter ended June 30, 2023.
Second Quarter 2023 Summary
- Revenue of $87.2 million, down 3.8% year-over-year and up 0.2% on a constant currency basis
- Battery swapping service revenue of $33.3 million, up 9.6% year-over-year and up 14.2% on a constant currency basis
- Gross margin of 15.2%, up from 14.0% in the same quarter last year. Non-IFRS gross margin of 16.0%, up 0.5% year-over-year
- Net loss of $5.6 million, down from a net loss of $121.1 million in the same quarter last year primarily due to a one-time $178.8 million listing expense for the SPAC merger transaction last year
- Adjusted EBITDA of $12.9 million, up from $9.3 million in the same quarter last year
“We continue to see strong interest across the region and around the world for sustainable two-wheel transportation and when evaluated by B2B and B2C sectors, Gogoro battery swapping solutions and vehicles are consistently being chosen. We are on track for market availability in India and the Philippines later this year. In India, we announced a strategic agreement, the first of its kind, with India’s State of Maharashtra government to manufacture our Smartscooters, Smart batteries and GoStations in the state as well as to deploy the Gogoro battery swapping system across the state. As part of the agreement, the Maharashtra government is providing financial and other key incentives to ensure the agreement is executed successfully,” said Horace Luke, chairman, founder and CEO of Gogoro. “In the second quarter, we improved gross margin, operating expenses, and adjusted EBITDA. We also continued our growth in battery swapping service revenue and saw a slight increase in our overall revenue on a constant currency basis. Despite these positive results, our scooter sales in Taiwan were slightly below that of the same quarter last year. But we aren’t standing still, we are aggressively investing in our marketing and retail channel expansion in Taiwan and we are continuing to build out our portfolio. We plan to introduce several vehicle models in the coming quarters that will expand our product family, increase sales and grow revenue in both Taiwan and our other markets.”
“We have established a strong foundation for a successful global business and are well-positioned to increase our vehicle sales and recurring battery swapping revenue across our markets. Our focus on cost management has resulted in improved bottom-line performance, and we continued to see healthy increases in our Gogoro battery swapping revenue in the second quarter of 2023. In fact, our performance against our key financial metrics for the first half of 2023 was solid,” said Bruce Aitken, CFO of Gogoro. “We saw a drop in our Taiwan hardware revenue this quarter, but our international expansion continues to demonstrate solid progress which we anticipate will begin turning into revenue in the second half of 2023. We expect to continue our investment in research and development, network infrastructure and international production capacity into 2024 to lay the foundation for our international expansion.”
Despite achieving targeted financial results in the first half, uncertainty in the market translates to a conservative second-half outlook and we expect our scooter sales in the second half of 2023 to track to historical seasonality. Given the potential for ongoing soft ePTW demand in the Taiwan market, we are revising our full-year guidance to a revenue forecast of $340 million to $370 million.
Second Quarter 2023 Financial Overview
For the second quarter, revenue was $87.2 million, down 3.8% year-over-year and up 0.2% year-over-year on a constant currency basis1. Had foreign exchange rates remained constant with the average rate of the same quarter last year, revenue would have been up by an additional $3.7 million.
- Sales of hardware and other revenues for the quarter were $53.9 million, down 10.6% year-over-year, and down 6.8% year-over-year on a constant currency basis1. For the entire powered two-wheelers (“PTW”) market, sales in Taiwan in the second quarter were up 13.4% year-over-year, returning to roughly pre-pandemic levels, likely due to deferred purchases. Sales of electric PTW vehicles have not mirrored this growth, sales were down 5.1% compared to the same quarter last year. Much of the growth in the PTW market was driven by a few specific internal combustion engine (“ICE”) models that continue to appeal to price-sensitive consumers at the expense of competing ICE and electric vehicles. Gogoro vehicle sales volume decreased by 8.1% compared to the same quarter last year. Taiwan's consumer confidence index was at a ten-year low at the beginning of 2023 which typically translates into conservative purchase decisions when customers are refreshing their vehicles. This makes our second-half financial outlook difficult to predict. We view the second half conservatively and are expecting our performance in the second half of 2023 to track to historical seasonality.
- Battery swapping service revenue for the second quarter was $33.3 million, up 9.6% year-over-year, and up 14.2% year-over-year on a constant currency basis1. Total subscribers at the end of the second quarter exceeded 552,000, up 14.0% from 484,000 subscribers at the end of the same quarter last year. The year-over-year increase in battery swapping service revenue was primarily due to our larger subscriber base compared to the same quarter last year and the high retention rate of our subscribers. We continue to see the strength of our subscription-based business model to accrue more customers to maximize our battery swapping network efficiency.
For the second quarter, gross margin was 15.2%, up from 14.0% in the same quarter last year and non-IFRS gross margin1 was 16.0%, up from 15.5% in the same quarter last year. The gross margin and non-IFRS gross margin1 increases were driven by the improved cost efficiencies of Gogoro's battery swapping service operations and an increase in average revenue per energy subscriber due to a combination of new subscription programs and longer riding distances post-pandemic. These increases were partially offset by the higher production cost per vehicle as a result of lower volumes and promotional expenditures on scooter sales this year, while some of the adverse impacts were mitigated by our favorable product portfolio.
For the second quarter, net loss was $5.6 million, down $115.5 million from $121.1 million in the same quarter last year. The decrease in net loss was primarily due to a $178.8 million decrease in listing expenses and a $24.4 million decrease in operating expenses, primarily consisting of a $18.5 million decrease in acquisition-related expenses, a $3.2 million decrease in share-based compensation, and our tight control on expenses — savings of $2.3 million in expenses for sales and marketing programs and $1.5 million in general and administrative expenses. These decreases were partially offset by an unfavorable change in the fair value of financial liabilities of $88.5 million.
For the second quarter, adjusted EBITDA1 was $12.9 million, up from $9.3 million in the same quarter last year. The increase was primarily due to a $2.3 million decrease in expenses for sales and marketing programs as we implemented more efficient marketing campaigns and a $1.5 million decrease in general and administrative expenses mainly as a result of cost-saving initiatives. The increase was partially offset by a $1.1 million increase in research and development expenses for the development of new products.
We reduced operating cash outflow by $41.0 million compared to the same quarter last year through tightening our business operations and reducing working capital. We borrowed $22.7 million and paid back $14.3 million in bank loans in the second quarter to finance our investing activities. With a $144.0 million cash balance at the end of the second quarter and additional credit facilities, we believe we have sufficient sources of funding to meet our near-term business growth objectives.
Updated 2023 Guidance
Due to the soft demand in the Taiwan market, and to reflect our current market outlook and the timing of realizing our international projects, we are updating our 2023 revenue guidance to:
- Revenue of $340.0 million to $370 million.
- We estimate that we will generate approximately 95% of 2023 full-year revenue from the Taiwan market.
Conference Call Information
Gogoro's management team will hold an earnings Webcast on August 10th, 2023, at 8:00 a.m. Eastern Time to discuss the Company's second quarter 2023 results of operations and outlook.
Investors may access the webcast, supplemental financial information and investor presentation at Gogoro’s investor relations website (https://investor.gogoro.com) under the “Events” section. A replay of the investor presentation and the earnings call script will be available 24 hours after the conclusion of the webcast and archived for one year.
Founded in 2011 to rethink urban energy and inspire the world to move through cities in smarter and more sustainable ways, Gogoro leverages the power of innovation to change the way urban energy is distributed and consumed. Recognized and awarded by Frost & Sullivan as the “2023 Global Company of the Year for battery swapping for electric two-wheel vehicles,” Gogoro’s battery swapping and vehicle platforms offer a smart, proven, and sustainable long-term ecosystem for delivering a new approach to urban mobility. Gogoro has quickly become an innovation leader in vehicle design and electric propulsion, smart battery design, battery swapping, and advanced cloud services that utilize artificial intelligence to manage battery availability and safety. The challenge is massive, but the opportunity to disrupt the status quo, establish new standards, and achieve new levels of sustainable transportation growth in densely populated cities is even greater. For more information, visit https://www.gogoro.com/news and follow Gogoro on Twitter: @wearegogoro.
1This is a non-IFRS measure, see Use of Non-IFRS Financial Measures for a description of the non-IFRS measures and Reconciliation of IFRS Financial Metrics to Non-IFRS for a reconciliation of the company’s non-IFRS financial measures to their most directly comparable IFRS measures.