LiveWire Group, Inc. Q4 FY2024 earnings call

• Product Performance: Launch of new model year 2024 Street Glide and Road Glide touring motorcycles drove growth in US Touring segment. Trimmed inventory by reducing motorcycle production wholesale.
• Brand and Experiences: Build-out of custom-built apparel capabilities, brand collaborations with Champion, digital investments with 177% increase in motorcycle paces engagements for 2025 launch, Homecoming event with over 60,000 attendees, HDRA reaching 1M riders trained.
• Marketing and Dealer Support: Launched Marketing Development Fund to drive dealer traffic, focus on aligning messages with dealer channel, continued support for dealer network.

HDMC

• Q4 revenue: down 47%, full year: down 15%. Operating loss in Q4: $214M, full year: $278M.
• Touring segment: near 5% growth in US, share at almost 75% in 2024, highest since 2019.

HDFS

• Q4 revenue: up 4%, full year: up 9%. Operating income in Q4: $46M, full year: $248M.

LiveWire

• Q4 revenue: down, full year: down 31%. Operating loss in Q4: $26M, full year: $110M.
• Global retail sales of electric motorcycles: up 46% YOY, US market share 65% in 50+ hp on-road EV segment.

• HDMC: Flat retail sales in 2025, positive performance skewed to second half. Wholesale units flat to down 5%, revenue flat to down 5%, operating margin 7%-8%.
• HDFS: Operating income down 10%-15% in 2025 due to higher borrowing costs.
• LiveWire: Unit sales 1,000-1,500, operating loss $70M-$80M, cash burn reduced by 40% to $60M or less.

• Macro headwinds: Cyclicality of discretionary products, high interest rates, consumer confidence issues impacting sales.
• Tariffs: Uncertainty around tariffs, no production in Canada/Mexico, 100% US manufacturing.
• LiveWire Performance: Slow adoption of electric motorcycles affecting profitability and cash burn.

Q: Megan Clapp asked about first quarter cadence and inventory reduction.

A: Jonathan Root explained front half inventory reduction over 30%, front half wholesale down double-digit, back half up.

Q: Joe Altobello asked about Q4 margin surprise and retail outlook.

A: Karim Donnez and Jochen Zeitz discussed margin impacts from volume, manufacturing, and retail outlook with better second half performance.

Q: James Hardiman asked about margin bridge.

A: Jonathan Root explained volume, pricing, FX, mix, and OpEx factors contributing to 7%-8% margin.

Q: Robin Farley asked about motorcycle revenue and retail reference.

A: Jonathan Root said wholesale flat to down, retail flat, pricing favorable.

Q: Fred Wightman asked about dealer inventory mix.

A: Jonathan Root and Jochen Zeitz discussed improved inventory quality, surgical dealer support, and strategic pricing.

Q: Alex Perry asked about LiveWire long-term.

A: Jochen Zeitz said LiveWire is being streamlined, operating losses reduced, cash burn cut.

Q: Joe Nolan asked about international markets.

A: Jonathan Root said international markets mostly flat, some past challenges in China, Japan, Germany.

Q: Noah Zatzkin asked about HDFS health and guide.

A: Jonathan Root discussed book health, normalized youth values, and reserve adjustments.

Q: Tristan Thomas-Martin asked about HDMC margin target and HDFS seasonal change.

A: Jochen Zeitz said 15% target achievable with product launches, Jonathan Root mentioned HDFS reserve adjustments.

Q: Brandon Rolle asked about LiveWire profitability.

A: Karim Donnez and Jochen Zeitz discussed LiveWire cost reduction, contribution margin positive by year end, and commitment to the business.

Q: Jaime Katz asked about LiveWire new product.

A: Karim Donnez and Jochen Zeitz explained strategic rationale of maxi-scooter launch leveraging S2 platform and KYMCO partnership.