Gogoro Inc. Q1 FY2025 earnings call

• Focus is the key word for the past quarters, aiming for great customer experience, predictable financial results, and clear future vision.
• Energy business: Revenue of $34.5 million in Gogoro network business in line with projections, 6.2% growth y-o-y; 644,000 subscribers; launched new off-peak unlimited mileage plan and redesigned app; energy storage collaboration with Taipower progresses.
• Vehicle business: Streamlined vehicle offerings, saw increase in ASP and margin in hardware sales; launched new design model and co-branded model with Starlux Airlines; completed joint venture agreement with Castrol for international expansion, expect pilot program in H2 2025; working on strategy pivot in India regarding technology support.
• Infrastructure and future: Receive support from Taiwan central and local governments for EV policies; Kaohsiung and Tainan provide subsidies toward customers' monthly subscription spending; continue to add to 600 million infrastructure investment.
• NASDAQ status: Transferred from NASDAQ Global Select Market to NASDAQ Capital Market in late April, gaining 180-day grace period to regain compliance with NASDAQ bid price requirement.

Energy business: In the first quarter, Gogoro recorded revenue of $34.5 million in the Gogoro network business, in line with projections and showing 6.2% growth versus the first quarter of 2024. Vehicle business: Revenue for the hardware business was $29.1 million in the first quarter, down 21.8% year-over-year. The energy business revenue contribution is from the Gogoro network business, while the vehicle business's hardware revenue is a significant part but saw a decline.

• Full year 2025 revenue forecast between $295 million to $315 million on a constant currency basis, approximately 95% from Taiwan market.
• Energy business to achieve breakeven in 2026, generate positive free cash flow in 2027; vehicle business to breakeven in 2028.
• Expect to create approximately $25 million in savings in 2025 compared to 2024 as a result of cost efficiency plan.

• Global macro environment presents significant challenges including volatility in US markets and ongoing tariff issues, contributing to persistent downward pressure on broader market consumer confidence and Gogoro's share price.

Q: Gogoro is focusing on your network business with supercharge and quick charge technologies dramatically improving and shortening the electric vehicle charging time. Do you view that as a threat or how are you going to respond to the continued improvement of charging time for charging station models?

A: Yeah, thank you. We recognize the rapid advancements being made in fast charging and supercharging technology across the broader electric vehicle ecosystem. But these innovations are helping accelerate EV adoption overall, which is positive for the entire industry. However, we don't view them as a direct threat to Gogoro's battery swapping model. Our battery swapping platform was purpose built for the unique needs for urban mobility, particularly two-wheelers. The key value proposition remains speed, convenience and efficiency. With Gogoro a rider can swap a depleted battery for a fully charged one in less than six seconds, no waiting time, no grid strain and no need for dedicated parking or long wait time, which are often required even with the fastest chargers. I think fast-charging often comes with trade-offs including battery degradation, infrastructure investment, and grid stability issues. Our closed-loop system allows us to better manage the battery health, optimize energy load, and offer a consistent user experience at scale. This is especially relevant in high-density urban environment like those in Taiwan and Southeast Asia. That said we are not standing still. We continue to invest in R&D to improve our battery technology, energy efficiency, and system scalability. So, in short, we see the advancement of charging technology as part of the broader ecosystem evolution. Our focus remains on being the most efficient scalable and rider-centric energy platform for urban mobility based on our battery swapping technology.

Q: Please provide some commentary on the transfer to the NASDAQ capital market as well as your future plans to gain compliance with NASDAQ requirements and other plans for your listing status.

A: Thanks for the question. As we did mention briefly during the call, we have completed a transfer from the NASDAQ Global Select Market to the NASDAQ Capital Market in late April. By doing so, we gained an additional 180-day grace period to regain compliance with the NASDAQ bid price requirement. That gives us till the end of October almost to be compliant. So we're not focused on short-term stock price gains. We believe that our financial improvements, which hopefully you've seen some of today really indicates that we're on the right track and we're delivering against our stated plans. So, we're taking the long-term view on the stock. Obviously, we hope that there's organic stock price increase over the course of the next 180 or so days. In addition to that organic increase, there are a number of different options that we could explore for regaining compliance. Those could include a reverse stock split for example or other actions. And we'll carefully consider all of those actions and provide updates to our shareholders and to the public markets as we can in the interim. But we do not have any immediate plans and so we'll continue to watch the stock price, we'll continue to evaluate all options over the course of the next few months up until the extended deadline in late October.

Q: You mentioned the network business and scooter business will breakeven in 2026 and 2028 respectively. To help us derive Gogoro's value today, what is your longer term top line and bottom line growth plans?

A: Thanks for that one too. I'll take this one. So as you said we anticipate network breakeven in 2026 scooter breakeven in 2028 and network cash flow positive in 2027. So, we do see the opportunity as soon as we've reached those specific milestones to really have a meaningful shift in operational leverage and a meaningful shift in our profitability. So, from a top line standpoint the biggest driver of our growth is the increasing subscription business that we have, which is predictable it's recurring. We have 644,000 subscribers right now and every new subscriber that we add to the network, contributes to our top line growth. In addition to that top line growth, in the energy business, we do obviously see sales of Gogoro branded vehicles and partner-branded vehicles as well being good sources of revenue in the future. At a bottom-line level, we expect improvement in that income because as the revenue grows we don't expect that our cost base -- our fixed cost base to grow at the same speed. So, we should be able to leverage higher-margin network services business as that becomes a bigger and bigger part of our overall revenue. So, the key to Gogoro's business is the recurring revenue nature of our accumulating subscriber base. We're seeing that now. We're predicting breakeven in 2026. It's possible that we'll even see operational breakeven toward the end of this year. So, once we've gotten to that point then I think the story really shifts and we become about growth going into the future.

Q: Congratulations on making good progress on controlling costs. I'm wondering, whether your current operating efficiency model is sustainable and scalable when Gogoro grows beyond breakeven points? Can you touch on your cost structure and gross margin between the two different business models, i.e. network business and scooter business model?

A: Thank you for the questions and for also recognizing the progress, we have made on cost control. To address your first point, yes, we believe our current operating efficiency model is both sustainable and scalable. Over the past few quarters, we have made deliberate efforts to streamline operations, optimize our supply chain and leverage automation where possible. As we move beyond breakeven and scale into new markets, these efficiencies gives us a strong foundation. And most importantly, our platform approach especially with our battery swapping network, allows us to scale without a linear increase in operating costs. That's the key advantage. And now on the cost structure and gross margin between the two business models, in our network business, which includes battery swapping and energy services we see predictable and repeatable gross margin. This is largely due to the recurring nature of the revenue and the capital efficiency of the infrastructure, once it's deployed. So as variations [ph] grows, margins improve further due to operating leverage. So on the scooter business side, gross margin are more sensitive to component cost and volume. However, we view the vehicle business as a strategic enabler. It drives adoption of our energy platform and helps build the ecosystem. So going forward, we remain focused on improving margins across both segments, but particularly on expanding the member business, as the core engine of the long-term profitability. Thanks, again for the question it really give us an opportunity to explain our thoughts.