Written by Cláudio Afonso | LinkedIn | X
Nikola’s Chief Financial Officer Tom Okray stated on Thursday that the company has a cash runway of “five to six months,” with a monthly burn rate of $30 million to $40 million.
At the third quarter earnings conference call, the CFO added that the company is “working right now to try to raise the necessary capital to give us the runway to go much further into 2025.”
As of the time of writing, shares of the EV truck maker are falling 8.6% at $3.86.
“We finished the [third] quarter with approximately $198 million unrestricted cash. So, let’s just round that to $200 million because it makes the math easier. The cash burn for the quarter was $162 million. That is higher than the prior quarter, which had a cash burn of $145 million and higher than the first half, which was $135 million per quarter,” the executive explained.
Okray noted that the company had “some one-time and some annual payments” in the third quarter causing an increased cash burn rate.
“What’s important to note in this quarter is there were some one time and some annual payments related to settlements and insurance policies. There were also some supplier negotiations in terms of payments. If you normalize for those, then our $162 million gets very close to $145 million which was the last quarter,” Okray continued.
“Now, if you do the math and you take the first half cash burn down from the $45 million a month to $30 million to $40 million a month that gives you five to six and half month’s runway, which is the basis for our prepared remarks,” Nikola’s CFO added.
Okray highlighted that Nikola is “one of the few out on the field with the hydrogen network” adding that the company is not only selling trucks but also working on establishing an hydrogen refueling network via its brand HYLA.
Earlier this month, Nikola announced that it provided more than 5,000 hydrogen fueling sessions between December 27, 2023, and September 30.
“What we’re doing now, as we’ve said in the answer to some of our questions, we are talking to a number of strategics, a number of people who are interested. And by the way, they continue to be excited by what we’re building. As Steve says, we’re one of the few out on the field with the hydrogen network. We’re not only making the trucks, but we’re putting in the infrastructure as well. So, there’s very good interest from that,” Nikola‘s CFO said.
The company reported a loss from operations of $178.8 million while reiterating its annual guidance of 300-350 fuel cell electric vehicles (FCEV).
“In addition, we’re also working on our own self-help. And if you do the math, our cash conversion cycle, for example, improved 45 days since the end of Q1,” he noted.
The company’s CFO added that Nikola is making efforts to decrease the cash burn rate while being “very rigorous and vigilant.”
Nikola has recently informed employees of a new round of layoffs, coming less than 18 months after the company cut 23% of its Arizona workforce. The latest round impacted 135 employees, roughly 15% of the company’s staff.
“We’re working with [inaudible] in terms of their speed to improve voucher processing. We’re working with dealers in terms of floor planning issues. We’re looking at our organizational structure to make sure it’s lean. We’re being very rigorous and vigilant on discretionary cash,” Okray stated before adding that Nikola is currently trying to raise the necessary capital for a “much further” runway “into 2025.”
“To sum it all up, we think we’ve got that runway of five to six months at $30 million to $40 million per month. And therefore, we are working right now to try to raise the necessary capital to give us the runway to go much further into 2025,” the executive concluded.
The company announced that its net third quarter revenue was negatively impacted by $7.7 million as it repurchased 20 BEV trucks from one of its dealers.
In the earnings call, the company’s CFO said Nikola has “a PO in hand to deliver these units to another dealer.”
“We have a customer for them [the 20 returned trucks] in Q4,” Okray added later in the call.
Written by Cláudio Afonso | LinkedIn | X
