管理層發言
Welcome to the Gogoro Inc. 2024 Fourth Quarter and Full Year Earnings Call. This conference call is now being recorded and broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. I'd like to turn the call over to the Gogoro team.
Welcome to Gogoro's 2024 Q4 and Full Year Earnings Conference Call, hosted by our Interim CEO, Henry Chiang, and CFO, Bruce Aitken. Hopefully, by now, you've seen our earnings release. If you haven't, it is available on the Investor Relations tab of our website, investor.gogoro.com. We are hosting our earnings conference call via live webcast through Gogoro's website, where you can also download all of the earnings release materials. We will also be displaying the materials on the webcast screen as we go. Henry will provide a business update and outline our plans and vision for the future. Bruce will then go into the Q4 and full-year financial results in more detail. And then we will open the line for Q&A and answer as many questions as time allows. As usual, we would like to remind everyone that today's discussions may contain forward-looking statements that are subject to risk and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the forward-looking statements that appear in our press release and investor presentation provided today. Now I would like to turn the call over to Henry.
Thank you. Success is forged in challenges. Gogoro is embracing our challenges. The strongest companies don't just endure, they adapt, refocus, and transform. At its core, Gogoro is an energy company. We were founded to rethink urban energy and inspire the world to move more sustainably. Over the last 3 years, we have improved and extended our customer experience on the Gogoro network by investing nearly $100 million annually in infrastructure. Today, we operate the world's largest infrastructure of its kind and serve nearly 640,000 monthly subscribers. Our goal is clear: to achieve profitability and continued growth. In Q4, we took decisive actions to accelerate profitability, sharpening focus, realigning resources, streamlining operations, and reducing costs. These efforts are showing early signs of success. Our energy business is on track to break even by 2026 and generate free cash flow in 2027.
Additionally, we expect that our vehicle business will break even by 2028. We have 3 main business priorities: our energy business, our vehicle business, including partner OEMs, and international expansion. First, we are focusing on our energy business. We ended the fourth quarter with nearly 640,000 accumulated subscribers, up from 587,000 subscribers at the end of the same quarter last year. In Q4 2024, for the first time, revenue from the Gogoro battery swapping business surpassed revenue from vehicle sales. This marks a fundamental milestone for the business, one we expect to continue. Our batteries are built for longevity and second-life applications. First-generation battery in service for 10 years still operate in a good state of health as anticipated and are now being repurposed for second-life opportunities. The demand for both customer-facing and behind-the-meter energy solutions is growing fast in Taiwan and globally.
We see a rapidly evolving business with significant potential. And we are expanding our investments to capitalize on our large battery fleet. We have shifted R&D funding toward our energy and second-life battery initiatives. In 2025, we will increase energy R&D spending by approximately 26% compared to 24%, driving innovation in smarter, more resilient energy solutions for the future. Some of these solutions are already in commercial use, while others are in pilot testing with Taipower. By the second half of 2025, we will have full certification for our energy storage and peak-shaving products. I'm excited about the innovations we are bringing to market. These new products and services will not only enhance our battery swapping business but also create new revenue streams. Next, we are streamlining our Gogoro branded product lineup and expanding our power by the Gogoro network program. We are improving customer experience by delivering vehicles and services they need, whether on performance, quality, convenience, or affordability.
We are taking 2 important steps. First, we will utilize common components to drive efficiency. Second, we are optimizing our supply chain and manufacturing partnerships to achieve economies of scale. We are excited for upcoming product launches in 2025 and 2026 and look forward to sharing more soon. Finally, while Taiwan remains Gogoro's primary revenue driver, we remain committed to international expansion and partnerships. The global shift to electric two-wheelers is accelerating and interest in Gogoro's battery swapping ecosystem continues to grow. In 2024, we launched service with partners in Colombia, Singapore, and Nepal with more expansions ahead. Southeast Asia is still very much in our plans, but these markets take time to develop. We are actively working with Castrol to identify opportunities to accelerate adoption. Expect more concrete updates on this in the coming few weeks. In addition to realigning our business strategy, much of what we focus on during this transition has been streamlining operations and reducing costs.
First, we increased the alignment of our engineering and product teams by establishing an integrated development center to enhance our cross-functional collaborations and implement value-added engineering. In this way, we will be developing products that better meet our customers' needs at a reduced cost. Second, maintaining rigorous financial discipline. We conducted a top-to-bottom review of our fixed costs and removed unnecessary spending. We reviewed every hardware and energy product for its contribution margin, and we will streamline product offerings accordingly. We restructured our organization and consolidated overall space to foster better team collaboration and reduce costs. We are instilling discipline across all businesses, leaders, and teams with clear financial indicators and funding milestones. As a result, we have significantly reduced our fixed spending budget by more than 32% from $120 million in 2024 to $82 million in 2025.
These changes result in a leaner, more efficient operational model that positions us for sustainable long-term growth. While our focus is on the future, I want to take a moment to recognize some of our key achievements in 2024. During 2024, we received prestigious global accolades from top-tier media outlets and industry research firms. Fast Company recognized Gogoro as Asia Pacific's #1 most Innovative Company of 2024 and 37th globally. Fortune highlighted Gogoro on its 2024 Change the World list. MIT Technology Review recognized Gogoro as a top 15 Climate Tech Company to Watch for the second consecutive year. Also, we were honored by Frost & Sullivan as the 2024 Global Battery Swapping Company of the Year. We expanded our multiyear collaboration with TSMC to promote green and sustainable transportation. In November, we held our seventh annual Taipei Bridge rider event, attracting nearly 2,000 riders from all over Taiwan, representing Gogoro, GoShare, and PBGN vehicles.
During the year, we also received 2 major capital investments from Gold Sino and Castrol that resulted in a total of $75 million invested in the second quarter. In closing, it should be clear that our primary goal is accelerating our path to profitability. We will achieve this objective by sharpening our focus on the energy business, realigning resources to deliver products and services that better meet our customer needs, streamlining operations, and reducing costs for greater efficiency and team collaboration. The transition of the transportation and energy industries is a complex and challenging one. These are large and entrenched industries, deeply rooted in government regulations, slow-changing consumer behavior, and commoditized products. Gogoro's battery swapping ecosystem and Smartscooters have already begun disrupting and tangibly demonstrating a better solution at scale. The opportunities ahead are bigger than ever.
The demand for sustainable, efficient, and scalable energy solutions is only increasing, and Gogoro is uniquely positioned to lead this transformation. We are embracing these challenges as a team with a shared commitment to achieving profitability. I'm personally incredibly passionate about Gogoro's future and look forward to sharing more as we continue to execute our strategy. I'd like to hand it to Bruce, who will walk through our Q4 and full-year 2024 financials.
Thank you, Henry. I'm pleased to have this opportunity to provide a summary of our fourth quarter and full-year 2024 results. Our full-year revenue for 2024 was $310.5 million within the previously provided range of $305 million to $315 million. In the fourth quarter, we took accounting charges of over $38 million to simplify and strengthen our business. These impairment and exit costs materially impacted our fourth-quarter and full-year net loss results on an IFRS basis. However, we managed to deliver adjusted EBITDA of $46.5 million, representing a slight increase from 2023 full-year adjusted EBITDA. These proactive steps allowed us to optimize our cost structure and set us up well for the future as a leaner and more efficient organization focused on delivering a clear path to profitability. Our energy business continues to grow, reinforcing the strength of our battery swapping and smart energy solutions.
Gogoro, empowered by Gogoro Network Partner brands, maintained its market leadership with a 72% market share of electric scooters, even as the overall two-wheel market contracted slightly. As we closed out 2024, we leveraged this transition period to refine our strategy, sharpen our focus on energy services and ecosystem enablement, and continue our international focus. We continue to accumulate new subscribers on our Gogoro network, and that business continues to grow in line with expectations as we accumulate subscribers. We ended the year with nearly 640,000 subscribers, up from 587,000 subscribers at the end of 2023, and had $137.9 million in battery swapping service revenue for the full year 2024, representing an increase of 4.6% over 2023. As we anticipated, the overall market for two-wheelers in Taiwan in 2024 declined substantially, dropping 13.6% from 871,000 to 753,000 units. Electric two-wheeler sales remained at 10.5% penetration and Gogoro Smartscooters slightly increased our market share from 6.5% in 2023 to 7% in 2024 despite a small drop in Gogoro units sold.
We continue to provide exceptional services to our customers who we are partnering with to reduce our carbon emissions. A total of over 12 billion kilometers have now been ridden, over 1 million tons of carbon saved on the Gogoro network, and a total of 400,000 swaps per day carried out. Our international markets continue to deliver revenue and unit growth, but not at the pace we had anticipated, and Taiwan still accounts for more than 95% of our revenue. We remain optimistic and committed to international growth, but developing these markets takes time. For the fourth quarter, total revenue was $73 million, down 20.2% year-over-year and down 19.2% year-over-year on a constant currency basis. For the full year, total revenue was $310.5 million, down 11.2% year-over-year and down 8.5% year-over-year on a constant currency basis. Battery swapping service revenue for the fourth quarter was $35.9 million, up 10.2% year-over-year and up 12.3% year-over-year on a constant currency basis.
Battery swapping service revenue for the year was $137.9 million, up 4.6% year-over-year and up 8% year-over-year on a constant currency basis. The year-over-year increases in our battery swapping service revenue were primarily due to our large subscriber base and high retention rates. We continue to see the strength of our subscription-based business model and increasing customer base. Sales of hardware and other revenue for the fourth quarter was $37.1 million, down 37% year-over-year. The year-over-year decrease in sales of hardware and other revenues was driven by lower sales volume, a decrease in average selling price due to a higher proportion of sales of entry-level models, a decrease in our parts and accessories sales as non-Gogoro branded accessories and parts proliferate, a $4.6 million carve-out of revenue associated with deferred revenue adjustments for a battery swapping service revenue promotion program, and these deferred revenues will be recognized over the next 24 to 36 months.
Sales of hardware and other revenues for the full year were $172.6 million, down 20.8% year-over-year and down 18.5% year-over-year on a constant currency basis. As a result of realigning our business, many one-time events reduced our gross margin for both the fourth quarter of 2024 and the full year of 2024. For the full year 2024, gross margin was 2.4%, down from 14.6% last year, whereas non-IFRS gross margin was 14.8%, down from 16% last year. For the fourth quarter, gross margin was negative 8.1%, down from a positive 11.6% in the same quarter last year, while non-IFRS gross margin was 14.2%, down from 14.8% in the same quarter last year. We believe the non-IFRS figures more accurately reflect the real underlying nature of the business after excluding all one-time impacts. We use these figures to measure our business performance. The decline in gross margin across both the fourth quarter and the full year was primarily driven by a combination of factors.
First, the $5 million derecognition expense on components removed from battery packs during the battery upgrade process, and $9.4 million of total direct costs attributable to our battery upgrade initiatives. Secondly, an increase in sales of lower-margin entry-level models; third, higher excess capacity cost due to reduced sales volume; fourth, the full-year impact of the $4.6 million hardware revenue carve-out that I described previously; and fifth, a lower margin contribution from Gogoro OEM parts. For the last few quarters, we've been undertaking a program to carry out one-time voluntary upgrades on certain battery packs, which will take several quarters to complete and will continue throughout 2025. These upgrades provide multiple benefits. More efficient deployment of our resources than replacing battery packs, increasing the lifetime capacity of each battery pack, including extending its first mobility use case useful life and solidifying the extra lifetime capacity of each battery pack to validate our second-life thesis.
These upgrades are expected to create economic benefits in the long term but do generate a short-term reduction in our gross margin as we continue carrying out the upgrades. We expect our cash position, gross profit, and gross margin will continue to be impacted by the cost of these upgrades during 2025. In order to improve our overall customer experience and to extend battery life, we plan to continue upgrading a substantial quantity of our battery packs, which are already in circulation and will improve designs of our battery packs to make them even more rugged, safe, and long-lasting. For the fourth quarter, net loss was $71.8 million, representing an increase of $45.1 million from a net loss of $26.7 million in the same quarter last year. The increase in net loss was due to a $29.9 million increase in other operating expenses associated with various accounting charges for impairment and exit activities and the decrease of $16.5 million in gross profit.
We reduced operating expenses substantially in the fourth quarter, contributing $4.7 million in savings. For the full year 2024, net loss was $123.2 million, representing a decrease of $47.2 million from a net loss of $76 million last year. The increase in net loss was primarily due to a $43.5 million decrease in gross profit driven by costs related to our battery upgrade initiatives, increase in impairment loss of $32.6 million, $3.3 million of exit activities, and $1.6 million in customer care packages. This was partially offset by a favorable change of $12.1 million in the fair value of financial liabilities and a $25.1 million reduction in operating expenses, excluding other operating expenses. For the fourth quarter, adjusted EBITDA was $8.8 million, representing a decrease of $0.2 million from $9 million in the same quarter last year. The decrease was primarily due to a $3.2 million decrease in non-IFRS gross profit margin, excluding share-based compensation, depreciation, and amortization, also excluding battery upgrade initiatives and exit activities.
The decrease was partially offset by a reduction in operating expenses from various cost-savings initiatives compared to the same quarter last year. For the full year 2024, adjusted EBITDA was $46.5 million, representing an increase of $1 million from $45.5 million last year. The increase was primarily due to a reduction in operating expenses from various cost savings initiatives compared to the same quarter last year. The increase was partially offset by a $9.9 million decrease in non-IFRS gross profit margin. We generated $12.1 million of operating cash inflow in 2024 compared to 2023, when we generated $59.1 million of cash in operations. With $117.1 million cash balance at the end of 2024 and the additional credit facilities that are available to us, we believe we have sufficient sources of funding to meet our near-term business growth objectives. In the fourth quarter, we focused on simplifying our business and realigning our resources to focus on delivering exceptional products with increased efficiency.
Our plan is to accelerate our path to profitability. These initiatives include structural and operating realignment across the company, consolidation and exit of facilities, accounting impairments alongside other reductions in operating expenses. As a result of these actions, we recognized $34 million of non-cash impairment charges for certain manufacturing assets in India, China, and Taiwan and a decline in value of our equity investment in the Philippines. We also recognized $4.8 million of exit activities, including idle facilities and $3.3 million of Customer Care Package programs in 2024. Gogoro's fourth quarter and full year 2024 results of operations were materially impacted by these charges, while the exit activities, impairment of assets, and one-time customer experience enhancement program had no impact on non-IFRS net loss and adjusted EBITDA. Further, Gogoro is expected to create approximately $25 million in savings in 2025 compared to 2024 as a result of the cost reduction plan.
We expect our Gogoro network battery swapping business to reach profitability and deliver non-IFRS net income in 2026 and our hardware sales business to reach profitability in 2028. We believe the Taiwan two-wheel market in 2025 will remain at 2024 levels. For the full year 2025, we expect our revenue to be between $295 million to $315 million on a constant currency basis, which would reflect 2025 Taiwan market conditions and the conversion rate. We estimate that approximately 95% of such full-year revenue will be generated from the Taiwan market. Our IFRS gross margin will be continuously negatively impacted in the short term because of our ongoing and accelerated battery upgrade initiative, which is expected to be completed by the end of 2025. With the combination of ASP pressure from entry-level models and delays in realizing anticipated international sales, we expect our non-IFRS gross margin to remain at the current level in 2025. With that financial update, I'll hand the session back to the moderator for a Q&A session. Thank you.
Thank you, Henry and Bruce, for the updates. As attendees are formulating their questions, I will ask 2 questions that we have collected. Question number one, can you provide additional color on your expectation of energy business to breakeven in 2026?
Gogoro has always viewed ourselves as an energy company, and we are now even more focused on this part of the business. We have accumulated approximately 640,000 subscribers, have very predictable ARPU and have an extremely high retention rate of our subscribers. Based on this information, we can predict with relative accuracy our future battery swapping revenue and provided we control costs in line with our planned budget expenditures. We will break even on a non-IFRS basis in 2026. We are confident of that outcome.
Thank you, Henry. So question number two, what action plans can you implement to raise your stock price back above $1, so you don't get delisted? And when does the 180-day grace period end?
Thanks. Stock price is really a reflection of the market's perspective on our future strategy, our earning potential, our product roadmap, and a number of other factors. So we hope that through this discussion we've had today, we've shed some light on our future plans, primarily to shed some light on our anticipation of accelerating our path to profitability and tightening our cost structure through a number of different actions. So, with that, we trust that the market will have more confidence in our ability to deliver future business results. Our plan is to remain listed on the NASDAQ. The deadline is April 28 to regain compliance, and we're exploring a number of different alternative courses of action to ensure that we do regain compliance.
分析師問答
Thank you. We will now take our first question from Fawne Jiang at Benchmark Company. Please go ahead, Fawne.
Thank you. Hi, Henry. Hi, Bruce. Thanks for taking my questions. I have a couple of inquiries. First, I'm encouraged to hear your game plans regarding the path to profitability. Henry provided some insights earlier, but I would like to delve deeper into the assumptions for breaking even in 2026 regarding net income and in 2027 for free cash flow in energy, as well as for vehicles aiming for break even in 2028. What underlying growth assumptions are you using to reach these profitability targets?
Thanks, Fawne. I'll take a first crack at that. So, we've really shifted our focus in terms of how we think about profitability. We need to take an affordability approach to this. We are actually using very conservative growth assumptions with regards to, for example, vehicle sales quantities in Taiwan. For this year, as you can tell from our revenue guidance, with some growth in the energy business, there is limited growth forecasted from a vehicle standpoint. Last year, we sold a little bit under 50,000 units, and this year, our targets are roughly in line with that if you just do the ASP backwards math from our revenue forecast. So, we're confident that we will hit that 2026 energy break-even, the 2027 cash flow, and then 2028, the vehicle business should be able to break even as well.
I have a quick follow-up on that. I see that you focused on cost optimization, and it appears you have some effective plans in place. What factors need to change for you to potentially return to growth? Or is that something you are considering for the future?
So, I think there's two sides of it. The first side of it is our energy business that provide us constant growth in revenue and also EBITDA. So, you can see we have a very good 2026 in energy business, and also we are looking forward to the free cash flow in 2027. And for vehicles, I think we are now officially into the second cycle of Gogoro product roadmap. For the first cycle of product roadmap, we were required to build a vehicle from, like, the very top-tier to the entry-level tier because we are fundamentally, Gogoro network is an infrastructure project. But based on the infrastructure, you are required to have more subscribers. And given that our subscriber is at a breakeven point, it provides us another opportunity to revisit our product roadmap on the vehicle side. So, we have a very well-considered product roadmap for the next 10 years. We believe that product roadmap will help us to achieve the growth while helping us to achieve the breakeven of the vehicle business.
I think the thing I'll add too, Fawne, is there's two sides of it right? One is revenue growth and the other is cost control. And obviously, cost control is not our fundamental objective. It's an outcome of focusing on streamlining the business. As you saw, we've taken a number of accounting charges. We're consolidating space. We're writing down some inventory if we don't believe there's future sales opportunities. We're looking at some streamlining of resources within the company. We're looking at streamlining of CapEx within the company. And so, all of these things contribute to setting us up to a cost structure where this year, for example, our fixed cost will be reduced from $120 million last year to $88 million this year. And then across the board, as we mentioned, we expect about $25 million in savings. Whether it's marketing, whether it's facility space, whether it's rental of offices, whether it's our retail channel, we're looking at every single opportunity to get more efficient. And the net results of that is a more optimized cost structure, which leads to an improved and faster path to profitability as well.
Understood, that's very helpful. Just a quick follow-up on the growth side. I think Henry mentioned, you guys see the energy storage as a new source of revenue for you down the road. I just wonder how should we size the market potential and your value proposition there? And on top, of course, you did mention an international expansion is still part of your long-term growth plan. I just wonder how should we think about the revenue potential, growth potential from that part of your business down the road?
Yeah, I think the energy storage is definitely something really big in Taiwan. And we expect it to be very significant in Southeast Asia, especially as the renewable energy is kicking in. And you can see from the policy side that we have already seen lots of policies coming out. Our government is pushing hard on renewable energy. To adopt that renewable energy trend, there's a huge opportunity for us to provide energy storage service to the SMB, like a factory and household. As a matter of fact, we already have some pilot programs with, for example, Taipei and more than 346 intersections having batteries inside them. So, when there's a power outage, our battery has been very helpful. So, we see this as a new revenue source for us.
Yes. So I'll take the second part of the question about international expansion. We believe three things are required for success in the international markets: policy, partners, and patience. Policies are being aligned at different speeds in different markets. Partnerships are being aligned at different speeds in different markets. And then obviously, we have to be patient, and we have to wait for the right time, wait for the right partners, and wait for the right policy before we'll be successful. We have been targeting Southeast Asian markets for some time. We'll continue to do that. But we are still forecasting that for this year, the bulk of our revenue, over 95 percent, will come from the Taiwan market. As soon as there are better updates that we can provide, and we hope that we'll have some of those updates soon, we'll provide them to you directly.
Yes. We are looking forward to providing good updates in the next few weeks. So we'll love to share that more in the next couple of weeks.
At this time, I will take a question from online. Home energy storage has gotten very popular in recent years. Does Gogoro plan on releasing battery packs to consumers that can buy?
Yes, we have seen strong growth momentum in Taiwan as well. I think America has more and more home use of that, but I think Taiwan is growing. From our perspective, as an energy company, we have been positioned ourselves as a service company. So no matter the first life cycle usage of the battery, we are providing it as a subscription model. Not sure if we will consider selling them outright, but we will consider providing a service based on that.
I have another question online. Are there any plans to license your technology patents to diversify your revenue?
We have PBGN.
There are two ways we generate revenue from licensing. First, we sell kits and parts powered by the Gogoro network partners, which is essentially a licensing revenue model. Additionally, we already have licensing agreements for our software programs in international markets, where a small fee is paid back to Gogoro for every battery swapped. We are open to broader licensing programs in foreign countries for those interested in managing full enclosed battery swapping networks and for those looking to locally deploy the battery pack design. We welcome various models and partnerships and encourage anyone interested in collaborating with us to reach out directly. Our primary goal is to make urban mobility cleaner, greener, and more sustainable. If we can assist people in various countries in achieving that goal and contribute to a cleaner, greener world, we would be pleased to do so.
So at this time, there are no further questions. I'll turn the call over to Henry for a few closing remarks.
If you take one thing from today's call, please know that despite our recent challenges, Gogoro is laser-focused and completely committed to our customer experience and the goal of profitability. So thank you for your support of Gogoro, and thanks for calling into today's call.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.