LiveWire Group, Inc. (NYSE:LVWR) is an industry-leading all-electric vehicle brand with a mission to pioneer the rapidly growing two-wheel electric motorcycle space. The company operates in two segments: Electric Motorcycles and STACYC. The Electric Motorcycles segment sells electric motorcycles, related parts and accessories, and apparel in the United States and certain international markets, while the STACYC segment sells electric balance bikes, related parts and accessories, and apparel in the United States and certain international markets.

Financials

In the fiscal year 2023, LiveWire reported annual revenue of $38,023,000 and a net loss of $109,550,000. The company's annual operating cash flow was -$83,462,000, and its annual free cash flow was -$96,924,000. These financial results reflect the early-stage nature of LiveWire's business as it continues to invest in product development, market expansion, and cost improvements.

For the first quarter of 2024, LiveWire reported a net loss of $23,644,000 and revenue of $4,978,000. The company's operating cash flow for the quarter was -$22,926,000, and its free cash flow was -$26,115,000. The increase in net loss and negative cash flows compared to the prior-year period was primarily due to higher costs associated with the launch of new electric motorcycle models, as well as continued investment in product development and market expansion.

Segment Performance

LiveWire's Electric Motorcycles segment reported revenue of $1,244,000 in the first quarter of 2024, down 16.1% from the same period in 2023. This decrease was driven by a reduction in revenue from electric motorcycles, which was partially offset by an increase in revenue from parts, accessories, and apparel. The segment's operating loss was $29,007,000, up from $24,769,000 in the prior-year period, due to higher costs of goods sold and increased depreciation expense.

The STACYC segment, which focuses on electric balance bikes, reported revenue of $3,734,000 in the first quarter of 2024, down 40.5% from the same period in 2023. This decrease was primarily due to lower sales volumes to independent distributors. The segment's operating loss was $1,415,000, up from $138,000 in the prior-year period, driven by the decline in revenue.

Business Overview

LiveWire's business is focused on the rapidly growing electric motorcycle market, which is expected to see significant growth in the coming years. The company is well-positioned to capitalize on this trend with its innovative product offerings and strong brand recognition. However, the company faces significant competition from both established motorcycle manufacturers and new entrants in the electric vehicle space.

Outlook

In terms of guidance, LiveWire expects to deliver between 1,000 and 1,500 electric motorcycle units in 2024 and anticipates an operating loss in the range of $105 million to $115 million for the full year. The company also expects capital investment in the range of $225 million to $250 million as it continues to invest in product development and market expansion.

Liquidity

LiveWire's liquidity position remains a concern, with the company reporting negative operating and free cash flows in the first quarter of 2024. The company's cash and cash equivalents stood at $141,033,000 as of March 31, 2024, down from $167,904,000 at the end of 2023. To address this, LiveWire has entered into a Convertible Delayed Draw Term Loan Agreement with Harley-Davidson, Inc. (H-D) for up to $100 million in additional financing.

Geographic Presence

Geographically, LiveWire's sales are primarily concentrated in the United States, with some international presence in Europe and other markets. The company's international expansion efforts, particularly in Europe, will be a key focus area going forward as it seeks to grow its global footprint.

Risks and Challenges

In terms of risks, LiveWire faces a number of challenges, including the highly competitive nature of the electric motorcycle market, the need for continued investment in product development and market expansion, and the potential for supply chain disruptions and cost inflation. The company also faces risks related to its relationship with H-D, which is a significant shareholder and supplier.

Conclusion

Overall, LiveWire is a promising player in the rapidly evolving electric motorcycle market, but it faces significant challenges as it works to establish itself as a leading brand in this space. The company's ability to execute on its growth strategy, manage costs, and navigate the competitive landscape will be critical to its long-term success.