Workhorse Group Inc. Q4 FY2025 earnings call

Scott introduced that it's a milestone moment as Workhorse's first earnings report as a combined company post-merger with Motive Electric Trucks in December 2025. The new Workhorse is a leading North American medium-duty commercial vehicle OEM with a portfolio spanning classes 4, 5, and 6. They have over 1,100 vehicles deployed with some of the largest commercial and public sector fleets in North America, having surpassed 20 million real-world miles. They made three commitments at the close of the merger: complete integration, expand product portfolio, and strengthen financial position. On integration, board and governance structure are in place, workforce and office integrations are nearly complete, and expect full enterprise integration to be complete over the next two to three quarters with manufacturing consolidation at Union City, Indiana wrapping up by end of Q2 2026, targeting $20 million in annualized cost synergies. On product portfolio, teams are working on a new cycle plan and product roadmap for commonization of components and development of a proprietary Class 5-6 cab chassis, and introduced a new lower cost configuration of the W56 step van. On financial position, entered the year with a stronger balance sheet and had a $40 million customer order lending facility. Bob then walked through financial results: Q4 2025 revenue $9.7M vs $6M in 2024, delivered 65 vehicles vs 40 in Q4 2024; cost of sales $15.5M vs $9M, gross margin negative $5.7M; operating expenses $14.4M vs $13.5M, operating loss $20.1M vs $16.5M; net loss $23.7M vs $19.6M. Full year 2025 revenue $21.2M vs $7M in 2024, pro forma revenue if merger completed for both periods would be $34M vs $13.7M. Balance sheet as of Dec 31, 2025 had $12.9M cash and cash equivalents, $5M convertible note and $10M under cash flow credit facility, and $40M purchase order back customer order lending facility with no borrowings outstanding.

While not providing specific financial guidance at this time, expect deliveries to increase in 2026 as they ramp production at Union City, convert growing pipeline into confirmed orders, and will continue to provide visibility into key operating metrics each quarter.

Q: In the fourth quarter, describe the material one-time expenses related to closing the merger and how the $20 million in synergies cut in to the P&L over the course of 2026.

A: Bob said in Q4 recognized a little over $4M in one-time fees and costs associated with the merger. Scott added the $20M in synergies has four primary sources: manufacturing consolidation, significant headcount reductions, redundant costs like professional fees, insurance, marketing costs, and facility reductions. Expect to exit 2026 at a $20 million run rate with some immediate and others taking more time as work migrates into the Union City facility.

Q: With significant change in manufacturing footprint, optimistic about reaching positive gross margins on revenue by fourth quarter this year?

A: Craig, Scott said no, not quite there for fourth quarter this year, probably not in 2026.

Q: Outlook on step van market and preliminary feedback on new lower cost model.

A: Preliminary feedback on new lower cost models is really good from dealers and buyers, with positive reaction as they need complementary lower cost vehicles for shorter routes and smaller payload operations.

Q: Plant capacity, what's left to be done to get to 5,000 plus capacity.

A: Ben, Scott said minimal capex needed, like lift equipment and torque guns. In first quarter, relocated Motive's line, adding a third line in Q2 for Class 4 truck, with three lines operating in the same facilities with very little additional capital.

Q: How workhorse product and motive product will differ in eyes of customer and bill of materials reduction plan.

A: Mike, Scott said will sunset former class five, six chassis from motive side, ramp up new lines for Class 5-6 cab chassis and Class 4 line, with three lines running forward. On bill of materials, focus on commonizing parts from class four to five to six, reducing number of parts to stock, and the W56 140 kilowatt launch is an example of dropping price with lower BOM, and volume will help drive cost structure down.