Gogoro Inc. Q3 FY2024 earnings call

• Horace Luke resigned as CEO, Tamon Tseng became new Chairman, Henry Chiang interim CEO.
• Received NASDAQ Listing Compliance Notice, have 180 days to regain $1 per share compliance.
• Taiwan government inquiry into imported parts issue, no sufficient evidence found.
• Focus on three key areas: establishing profitable business, delighting Taiwan customers, prioritizing key expansion markets.
• Evaluating business segments and international operations for efficiency, initiating cost savings initiatives.

In Taiwan, battery swapping service revenue in Q3 was $34.9 million. Accumulated subscribers ended the third quarter at 626,000, up from 578,000 in Q3 2023. The total number of registered electric scooters in Q3 in Taiwan was 23,837 vehicles, up 14.5% from Q3 2023. Gogoro branded vehicle registrations were 15,551, up 1.6% from Q3 2023, and powered by the Gogoro network vehicle registrations were 16,444, making Gogoro based vehicles 69% of total electric two wheeled vehicle sales in Q3 2024. Sales of hardware and other revenues for the third quarter were $52 million, down 10.6% year-over-year. Total revenue in Q3 was $86.9 million, down 5.3% year-over-year and down 3.4% year-over-year on a constant currency basis.

• Adjusted 2024 full year revenue expectation to between $305 million to $315 million due to softer Taiwan two wheeler market and delays in international sales.
• Gross margin will be materially negatively impacted in the short-term due to ongoing and accelerated battery upgrade initiatives.

• NASDAQ listing compliance risk with 180 days to regain $1 per share closing price.
• Government inquiry risk related to potential use of imported parts.
• Uncertainties in international expansion, including market development pace and government programs/subsidies.

Q: What possible action plans to raise stock price back above $1?

A: Plan to take necessary steps to regain compliance, including having stock price trade above $1 for 10 consecutive days, focusing on business fundamentals.

Q: Is there a solid plan to address negative press and sales weakness?

A: Have a three-point plan: focus on establishing profitable business, delighting customers, prioritizing key expansion markets.

Q: Can Taiwan operations become double-digit margin business over next couple of years?

A: View Taiwan business holistically, working on cost reduction programs, non-IFRS gross margin in Q3 was 14.7%, focus on creating healthy business.

Q: Any plans to allow customers to own and buy their own battery system?

A: Business is capital intensive, expand internationally in asset light way with partners, open to new business models but not actively pursued currently.

Q: Update on India?

A: Successfully ran pilot programs in India, learning vehicle price matters, battery pack factory nearing completion, working with partners, influencing government subsidy policy for battery swapping electrification.