NASDAQ:GGR Gogoro Q4 2024 Earnings Report $0.26 +0.00 (+0.04%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$0.26 0.00 (-0.42%) As of 04/25/2025 07:59 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Gogoro EPS ResultsActual EPS-$0.25Consensus EPS -$0.03Beat/MissMissed by -$0.22One Year Ago EPSN/AGogoro Revenue ResultsActual Revenue$73.01 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AGogoro Announcement DetailsQuarterQ4 2024Date2/13/2025TimeBefore Market OpensConference Call DateThursday, February 13, 2025Conference Call Time7:00AM ETUpcoming EarningsGogoro's Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (20-F)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Gogoro Q4 2024 Earnings Call TranscriptProvided by QuartrFebruary 13, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Welcome to the Gogoro Inc. Twenty twenty four Fourth Quarter and Full Year Earnings Call. This conference call is now being recorded and broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. I'd like to turn the call over to the Gogoro team. Anny LiaoInvestor Relations at Gogoro00:00:24Welcome to Gogoro's twenty twenty four Q4 and Full Year Earnings Conference Call, hosted by our Interim CEO, Henry Jeong and CFO, Bruce Aitken. Hopefully, by now, you've seen our earnings release. If you haven't, it is available on the Investor Relations tab of our website, investor.gogoro.com. We are hosting our earnings conference call via live webcast through Gogoro's website, where you can also download all of the earnings release materials. We will also be displaying the materials on the webcast screen as we go. Anny LiaoInvestor Relations at Gogoro00:01:05If you are joining us through the conference call, your dial in lines are in listen only mode. Henry will provide a business update and outline our plans and vision for the future. Bruce will then go into the Q4 and full year financial results in more detail. And then we will open the line for Q and A and answer as many questions as time allows. As usual, we would like to remind everyone that today's discussions may contain forward looking statements that are subject to risks and uncertainties, which could cause actual results to differ materially from those contained in the forward looking statements. Anny LiaoInvestor Relations at Gogoro00:01:49Please refer to the forward looking statements that appear in our press release and investor presentation provided today. Now, I would like to turn the call over to Henry. Henry ChiangInterim Chief Executive Officer at Gogoro00:02:01Thank you. Success is forged in challenges. Gogol is embracing our challenges. The strongest companies don't just endure, they adapt, refocus and transform. At its core, Gogor is an energy company. Henry ChiangInterim Chief Executive Officer at Gogoro00:02:20We were founded to rethink urban energy and inspire the world to move more sustainably. Over the last three years, we have improved and extend our customer experience on the Gogo network by investing nearly $100,000,000 annually in infrastructure. Today, we operate the world's largest infrastructure of its kind and serve nearly 640,000 monthly subscribers. Our goal is clear, to achieve profitability and continued growth. In Q4, we took decisive actions to accelerate profitability, sharpening focus, realigning resources, streamlining operations and reducing costs. Henry ChiangInterim Chief Executive Officer at Gogoro00:03:11These efforts are showing early signs of success. Our energy business is on track to breakeven by 2026 and generate free cash flow in 2027. Additionally, we expect that our vehicle business will breakeven by 2028. We have three main business priorities, our energy business, our vehicle business, including partner OEMs and international expansion. First, we are focusing on our energy business. Henry ChiangInterim Chief Executive Officer at Gogoro00:03:45We ended the fourth quarter with nearly 640,000 accumulated subscribers, up from 587,000 subscribers at the end of the same quarter last year. In Q4 twenty twenty four, for the first time, revenue from the Gogoro battery swapping business surpassed revenue from vehicle sales. This marks a fundamental milestone for the business, one we expect to continue. Our batteries are built for longevity and second life applications. First generation battery in service for ten years still operate in a good state of health as anticipated and are now being repurposed for second life opportunities. Henry ChiangInterim Chief Executive Officer at Gogoro00:04:34The demand for both customer phasing and behind the media energy solutions is growing fast in Taiwan and globally. We see a rapidly evolving business with significant potential, And we are expanding our investments to capitalize on our large battery fleet. We have shift R and D funding toward our energy and second life battery initiatives. In 2025, we will increase energy R and D spending by approximately 26% versus 24%. Driving innovation is smarter, more resilient energy solutions for the future. Henry ChiangInterim Chief Executive Officer at Gogoro00:05:15Some of these solutions are already in commercial use, while others are in pilot testing with Ti Power. By the second half of twenty twenty five, we will have full certification for our energy storage and peak shaving products. I'm excited about the innovations we are bringing to market. These new products and services will not only enhance our battery tropics business, but also create new revenue streams. Next, we are streamlining our GoGo branded product lineup and expanded our Power by GoGo network program. Henry ChiangInterim Chief Executive Officer at Gogoro00:05:54We are improving customer experience by delivering vehicles and services they need, whether on performance, quality, convenience or affordability. We are taking two important steps. First, we will utilize common components to drive efficiency. Second, we are optimizing our supply chain and manufacturing partnerships to achieve economies of scale. We are excited for upcoming product launches in 2025 and 2026 and look forward to share more soon. Henry ChiangInterim Chief Executive Officer at Gogoro00:06:31Finally, while Taiwan remains Gogoro's primary revenue driver, we remain committed to international expansion and partnerships. The global shift to electric two wheeler is accelerating and interest in Gogoro's battery swapping ecosystem continues to grow. In 2024, we launched service with partner in Colombia, Singapore and Nepal with more expansions ahead. Southeast Asia is still very much in our plans, but these markets take time to develop. We are actively working with Castro to identify opportunities to accelerate adoption. Henry ChiangInterim Chief Executive Officer at Gogoro00:07:10Expect more concrete updates on this in the coming few weeks. In addition to realigning our business strategy, much of what we focus on during this transition has been streamlining operations and reducing costs. First, we increased the alignment of our engineering and product teams by establishing an integrated development center to enhance our cross functional collaboration and implement value added engineering. In this way, we will be developing products that better meet our customer needs at a reduced cost. Second, maintaining rigorous financial discipline. Henry ChiangInterim Chief Executive Officer at Gogoro00:07:57We conducted a top to bottom review of our fixed costs and removed unnecessary spending. We reviewed every hardware and energy product for its contribution margin and we will streamline product offerings accordingly. We restructured our organization and consolidate overall space to foster better team collaboration and reduce costs. We are instilling discipline across all businesses, leaders and teams with clear financial indicators and funding milestones. As a result, we have significantly reduced our fixed spending budget by more than 32% from $120,000,000 in 2024 to $82,000,000 in 2025. Henry ChiangInterim Chief Executive Officer at Gogoro00:08:54These changes result in a leaner, more efficient operational model that positions us for sustainable long term growth. While our focus is on the future, I want to take a moment to recognize some of our key achievements in 2024. During 2024, we received prestigious global accolades from top tier media outlets and industry research firms. Fast Company recognized Gogor as Asia Pacific's number one most innovative company of 2024 and '30 seventh globally. Fortune highlighted Gogor on its 2024 change the world list. Henry ChiangInterim Chief Executive Officer at Gogoro00:09:46MIT Technology Review recognized Gogra as a top 15 climate tech company to watch for the second year in a row. Also, we were honored by Frost and Sullivan as the 2024 Global Battery Swapping Company of the Year. We expanded our multi year collaboration with TSMC to promote green and sustainable transportation. In November, we held our seventh annual Taipei Bridge rider event, attracting nearly 2,000 riders from all over Taiwan, representing Gogoro, Gogshare and PPGN vehicles. During the year, we also received two major capital investment from Gosino and Castrol that results in a total of $75,000,000 invested in the second quarter. Henry ChiangInterim Chief Executive Officer at Gogoro00:10:44In closing, it should be clear that our primary goal is accelerating our path to profitability. We will achieve this objective by sharpening our focus on the energy business, realigning resources to deliver products and services that better meet our customer needs, streamlining operations and reducing costs for greater efficiency and team collaborations. The transition of the transportation and energy industries is a complex and challenging one. These are large and entrenched industries, deeply rooted in government regulations, slow changing consumer behavior and commoditized products. Gogoro's battery swapping ecosystem and smart scooters have already begun disrupting and tangibly demonstrating a better solution at scale. Henry ChiangInterim Chief Executive Officer at Gogoro00:11:43The opportunities ahead are bigger than ever. The demand for sustainable, efficient and scalable energy solutions is only increasing and Gogor is uniquely positioned to lead this transformation. We are embracing these challenges as a team with a shared commitment to achieving profitability. I'm personally incredibly passionate about Gogoro's future and look forward to share more as we continue to execute our strategy. I'd like to hand it to Bruce, who will walk through our Q4 and full year 2024 financials. Bruce AitkenChief Financial Officer at Gogoro00:12:30Thank you, Henry. I'm pleased to have this opportunity to provide a summary of our fourth quarter and full year 2024 results. Our full year revenue for 2024 was $310,500,000 within the previously provided range of $3.00 $5,000,000 to $315,000,000 In the fourth quarter, we took accounting charges of over $38,000,000 to simplify and strengthen our business. These impairment and exit costs materially impacted our fourth quarter and full year net loss results on an IFRS basis. However, we managed to deliver adjusted EBITDA of $46,500,000 representing a slight increase from twenty twenty three full year adjusted EBITDA. Bruce AitkenChief Financial Officer at Gogoro00:13:15These proactive steps allowed us to optimize our cost structure and set us up well for the future as a leaner and more efficient organization focused on delivering a clear path to profitability. Our energy business continues to grow, reinforcing the strength of our battery swapping and smart energy solutions. Gogoro and powered by Gogoro Network partner brands maintained its market leadership with a 72% market share of electric scooters, even as the overall two wheel market contracted slightly. As we closed out 2024, we leveraged this transition period to refine our strategy, sharpen our focus on energy services and ecosystem enablement and continue our international focus. We continue to accumulate new subscribers on our Gogoro network and that business continues to grow in line with expectations as we accumulate subscribers. Bruce AitkenChief Financial Officer at Gogoro00:14:07We ended the year with nearly 640,000 subscribers, up from 587,000 subscribers at the end of twenty twenty three and had $137,900,000 in battery swapping service revenue for the full year 2024, representing an increase of 4.6 over 2023. As we anticipated, the overall market for two wheelers in Taiwan in 2024 declined substantially, dropping 13.6% from 871,000 to 753,000 units. Electric two wheeler sales remained at 10.5 penetration and Gogoro Smart Scooters slightly increased our market share from 6.5% in 2023 to 7% in 2024 despite a small drop in Gogoro units sold. We continue to provide exceptional services to our customers who we are partnering with to reduce our carbon emission reduction goals. A total of over 12,000,000,000 kilometers have now been ridden, over 1,000,000 tons of carbon saved on the GoGrow network and a total of 400,000 swaps per day carried out. Bruce AitkenChief Financial Officer at Gogoro00:15:18Our international markets continue to deliver revenue and unit growth, but not at the pace we had down 20 down 20.2% year over year and down 19.2% year over year on a constant currency basis. For the full year, total revenue was $310,500,000 down 11.2 year over year and down 8.5% year over year on a constant currency basis. Battery swapping service revenue for the fourth quarter was $35,900,000 up 10.2% year over year and up 12.3% year over year on a constant currency basis. Battery swapping service revenue for the year was $137,900,000 up 4.6% year over year and up 8% year over year on a constant currency basis. The year over year increases in our battery swapping service revenue was primarily due to our large subscriber base and high retention rates. Bruce AitkenChief Financial Officer at Gogoro00:16:26We continue to see the strength of our subscription based business model and increasing customer base. Sales of hardware and other revenue for the fourth quarter was $37,100,000 down 37% year over year. The year over year decrease in sales of hardware and other revenues was driven by lower sales volume, a decrease in average selling price due to higher proportion of sales of entry level models, a decrease in our parts and accessory sales as non Gogrow branded accessories and parts proliferate, a $4,600,000 carve out of revenue associated with deferred revenue adjustments for a battery swapping service revenue promotion program, and these deferred revenues will be recognized over the next twenty four to thirty six months. Sales of hardware and other revenues for the full year were at $172,600,000 down 20.8% year over year and down 18.5% year over year on a constant currency basis. As a result of realigning our business, many one time events reduced our gross margin for both the fourth quarter of twenty twenty four and the full year of 2024. Bruce AitkenChief Financial Officer at Gogoro00:17:34For the full year 2024, gross margin was 2.4%, down from 14.6% last year, whereas non IFRS gross margin was 14.8, down from 16% last year. For the fourth quarter, gross margin was negative 8.1%, down from a positive 11.6% in the same quarter last year, while non IFRS gross margin was 14.2%, down from 14.8% in the same quarter last year. We believe the non IFRS figures more accurately reflect the real underlying nature of the business after excluding all one time impacts. We use these figures to measure our business performance. The decline in gross margin across both the fourth quarter and the full year was primarily driven by a combination of factors. Bruce AitkenChief Financial Officer at Gogoro00:18:23First, the $5,000,000 derecognition expense on components removed from battery packs during the battery upgrade process and $9,400,000 of total direct costs attributable with our battery upgrade initiatives secondly, an increase in sales of lower margin entry level models third, higher excess capacity costs due to reduced sales volume fourth, the full year impact of the $4,600,000 hardware revenue carve out that I described previously and fifth, a lower margin contribution from Gogoro OEM parts. For the last few quarters, we've been undertaking a program to carry out one time voluntary upgrades on certain battery packs, which will take several quarters to complete and will continue throughout 2025. These upgrades provide multiple benefits: more efficient deployment of our resources than replacing battery packs increasing lifetime capacity of each battery pack, including extending its first mobility use case useful life and solidifying the extra lifetime capacity of each battery pack to validate our second life thesis. These upgrades are expected to create economic benefits in the long term, but do generate a short term reduction in our gross margin as we continue carrying out the upgrades. We expect our cash position, gross profit and gross margin will continue to be impacted by the cost of these upgrades during 2025. Bruce AitkenChief Financial Officer at Gogoro00:19:45In order to improve our overall customer experience and to extend battery life, we plan to continue upgrading a substantial quantity of our battery packs, which are already in circulation and will improve designs of our battery packs to make them even more rugged, safe and long lasting. For the fourth quarter, net loss was $71,800,000 representing an increase of 45,100,000 from a net loss of $26,700,000 in the same quarter last year. The increase in net loss was due to a $29,900,000 increase in other operating expenses associated with various accounting charges for impairment and exit activities and the decrease of $16,500,000 in gross profit. We reduced operating expenses substantially in the fourth quarter, contributing $4,700,000 in savings. For the full year 2024, net loss was $123,200,000 representing a decrease of $47,200,000 from a net loss of $76,000,000 last year. Bruce AitkenChief Financial Officer at Gogoro00:20:52The increase in net loss was primarily due to a $43,500,000 decrease in gross profit driven by costs related to our battery upgrade initiatives, increase in impairment loss of $32,600,000 3 point 3 million dollars of exit activities and $1,600,000 in customer care packages. This was partially offset by a favorable change of $12,100,000 in the fair value of financial liabilities and a 25,100,000 reduction in operating expenses, excluding other operating expenses. For the fourth quarter, adjusted EBITDA was $8,800,000 representing a decrease of $200,000 from $9,000,000 in the same quarter last year. The decrease was primarily due to a $3,200,000 decrease in non IFRS gross profit margin, excluding share based compensation, depreciation and amortization, also excluding battery upgrade initiatives and exit activities. The decrease was partially offset by a reduction in operating expenses from various cost savings initiatives compared to the same quarter last year. Bruce AitkenChief Financial Officer at Gogoro00:22:00For the full year 2024, adjusted EBITDA was $46,500,000 representing an increase of $1,000,000 from $45,500,000 last year. The increase was primarily due to a reduction in operating expenses from various cost savings initiatives compared to the same quarter last year. The increase was partially offset by a $9,900,000 decrease in non IFRS gross profit margin. We generated $12,100,000 of operating cash inflow in 2024 compared to 2023 where we generated $59,100,000 of cash in operations. With $117,100,000 cash balance at the end of twenty twenty four and the additional credit facilities that are available to us, we believe we have sufficient sources of funding to meet our near term business growth objectives. Bruce AitkenChief Financial Officer at Gogoro00:22:53In the fourth quarter, we focused on simplifying our business and realigning our resources to focus on delivering exceptional products with increased efficiency. Our plan is to accelerate our path to profitability. These initiatives include structural and operating realignment across the company, consolidation and exit of facilities, accounting impairments alongside other reductions in operating expenses. As a result of these actions, we recognized $34,000,000 of non cash impairment charges for certain manufacturing assets in India, China and Taiwan, and a decline in value of our equity investment in The Philippines. We also recognized 4,800,000 of exit activities, including idle facilities and $3,300,000 of customer care package programs in 2024. Bruce AitkenChief Financial Officer at Gogoro00:23:44Gogoro's fourth quarter and full year 2024 results of operations were materially impacted by these charges, while the exit activities, impairment of assets and one time customer experience enhancement program had no impact on non IFRS net loss and adjusted EBITDA. Further, Gogoro is expected to create approximately $25,000,000 in savings in 2025 compared to 2024 as a result of the cost reduction plan. We expect our Gogoro network battery swapping business to reach profitability and deliver non IFRS net income in 2026 and our hardware sales business to reach profitability in 2028. We believe the Taiwan Two wheel market in 2025 will remain at 2024 levels. For the full year 2025, we expect our revenue to be between $295,000,000 to $315,000,000 on a constant currency basis, which would reflect 2025 Taiwan market condition and a conversion rate. Bruce AitkenChief Financial Officer at Gogoro00:24:45We estimate that approximately 95% of such full year revenue will be generated from the Taiwan market. Our IFRS gross margin will be continuously negatively impacted in the short term because of our ongoing and accelerated battery upgrade initiative, which is expected to be completed by the end of twenty twenty five. With the combination of ASP pressure from entry level models and delays in realizing anticipated international sales, we expect our non IFRS gross margin to remain at the current level in 2025. With that financial update, I'll hand the session back to the moderator for a Q and A session. Thank you. Anny LiaoInvestor Relations at Gogoro00:25:29Thank you, Henry and Bruce for the updates. As attendees are formulating their questions, I will ask two questions that we have collected. Question number one, can you provide additional color on your expectation of energy business to breakeven in 2026? Henry ChiangInterim Chief Executive Officer at Gogoro00:25:53Golar has always viewed ourselves as an energy company and we are now even more focused on this part of the business. We have accumulated approximately 640,000 subscribers, have very predictable ARPU and have extremely high retention rates of our subscribers. Based on this information, we can predict with relative accuracy our future factory swapping revenue and provided we control costs in line with our planned budget expenditures. We'll breakeven on a non IFRS basis in 2026. We are confident of that outcome. Anny LiaoInvestor Relations at Gogoro00:26:39Thank you, Henry. So question number two, what action plans can you implement to raise your stock price back above $1 so you don't get delisted? And when does the one hundred and eighty day grace period Anny LiaoInvestor Relations at Gogoro00:27:00end? Bruce AitkenChief Financial Officer at Gogoro00:27:01Thanks, Andy. Stock price is really a reflection of the market's perspective on our future strategy, our earning potential, our product roadmap and a number of other factors. So we hope that through this discussion we've had today, we've shed some light on our future plans and primarily to shed some light on our anticipation of accelerating our path to profitability and tightening our cost structure through a number of different actions. So with that, we trust that the market will have more confidence in our ability to deliver future business results. Bruce AitkenChief Financial Officer at Gogoro00:27:36Our plan is to remain listed on the NASDAQ. The deadline is April 28 to regain compliance and we're exploring a number of different alternative courses of action to ensure that we do regain compliance. Anny LiaoInvestor Relations at Gogoro00:27:52Thank you, Bruce. Operator, please open the line for Q and A session. Operator00:27:59Thank Operator00:28:26We will now take our first question from the line of Fawn Jiang from Benchmark Company. Please ask your question Fawn. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:28:36Thank you. Hi, Henley. Hi, Bruce. Thanks for taking my questions. A couple on my side. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:28:44First, it's very encouraging to hear your, I think, game plans in terms of path to profitability ahead. I think here we actually shed a bit more light earlier, but I just want to go a bit deeper with assumption to breakeven in 2026 on the net income and the free cash flow 2027 for the energy and also on the vehicle side to breakeven on 2028. What's your growth assumption underlying the growth assumption to achieve this, I think, again, profitability? Bruce AitkenChief Financial Officer at Gogoro00:29:22Thanks, Fawn. I'll take a first crack at that. So we've really shifted our focus in terms of how we think about profitability. We need to take an affordability approach to this. So we are actually using very conservative growth assumptions with regards to, for example, vehicle sales quantities in Taiwan. Bruce AitkenChief Financial Officer at Gogoro00:29:47For this year, as you can tell from our revenue guidance, with some growth in the energy business, there is limited growth forecasted from a vehicle standpoint. Last year, we sold a little bit under 50,000 units and this year our targets are roughly in line with that. If you just do the ASP backwards math from our revenue forecast. So we're confident that we will hit that 2026 energy breakeven, the 2027 cash flow and then 2028 the vehicle business should be able to breakeven as well. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:30:22Understood. Just a quick follow-up on that. I understand you guys focus on the cost optimization. It seems like you have very effective plan, game plan in place. Do you expect like what factors what kind of need to happen for you to potential return to growth? Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:30:45Or is that focused for the company down the road? Henry ChiangInterim Chief Executive Officer at Gogoro00:30:52So I think there's two side of it. The first side of it is our energy business that provide us constant growth in revenue and also EBITDA. So you can see we have a very good 2026 in energy business and also we are looking forward to the free cash flow in 2027. And for vehicle, I think we are now officially into the second cycle of Gogoro product roadmap. For the first cycle of product roadmap, we are required to do the vehicle from like a very top tier to the entry level tier because we are fundamentally Gogol network is infrastructure project. Henry ChiangInterim Chief Executive Officer at Gogoro00:31:34But based on the infrastructure, you require to have more subscribers. And given that our subscriber is at a breakeven point, it provides us another opportunity to revisit our product roadmap on the vehicle side. So we have a very well considered product roadmap for the next ten years from now. So we believe that product roadmap will help us to achieve the growth while helping us to achieve the breakeven of the vehicle business. Bruce AitkenChief Financial Officer at Gogoro00:32:10I think the thing I'll add to Fawn is, there's two sides of it, right? One is revenue growth and the other is cost control. And obviously, cost control is not our fundamental objective. It's an outcome of focusing on streamlining the business. As you saw, we've taken a number of accounting charges. Bruce AitkenChief Financial Officer at Gogoro00:32:28We're consolidating space. We're writing down some inventory if we don't believe there's future sales opportunities. We're looking at some streamlining of resources within the company. We're looking at streamlining of CapEx within the country for the company. And so, all of these things contribute to setting us up to a cost structure where this year, for example, our fixed costs will be reduced from $120,000,000 last year to $88,000,000 this year. Bruce AitkenChief Financial Officer at Gogoro00:32:53And then across the board, as we mentioned, we expect about $25,000,000 in savings. Whether it's marketing, whether it's facility space, whether it's rental of offices, whether it's our retail channel, we're looking at every single opportunity to get more efficient and the net results of that is a more optimized cost structure, which leads to an improved and faster path to profitability as well. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:33:19Understood. That's very helpful. Just a quick follow-up on the growth side. I think Harry mentioned you guys see the energy storage as a new source of revenue for you down the road. I just wonder how should we size the market potential and your value proposition there? Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:33:36And on top of course, you did mention, at international expansion is still part of your long term growth plan. I just wonder how should we think about the revenue potential, growth potential from that part of your business down the road? Henry ChiangInterim Chief Executive Officer at Gogoro00:33:52Yes. I think the energy storage is definitely something really big in Taiwan and we are expected to it will be very big in Southeast Asia, especially that the renewable energy is kicking in. And you can see from the policy side of it in Taiwan that we already seen a lot of policies coming out and our government is pushing hard on the renewable energy. And to adopt that renewable energy trend, there's a huge opportunity for us to provide energy storage service to the SMB, like a factory and household. As a matter of fact, we already have a pilot some of the pilot with like for example, I'm in Taipei and more than three forty six intersections has the battery inside of it. Henry ChiangInterim Chief Executive Officer at Gogoro00:34:47So when the power is breaking When there's a brownout. Yes, brownout. Our battery really helped been very helpful. So we have seen that is something we want to build our second revenue growth on that. The other side of it is people have been talking about like the second life battery usage and it's really hard for a traditional vehicle maker even with when they manufacture the EV, they don't have the data of the battery. Henry ChiangInterim Chief Executive Officer at Gogoro00:35:22They don't know how it was used and how it was be monitored. So I think since both are on all the assets and we have the technology, we have a very good AI algorithm to monitor the battery and also every single cell in the battery pack. We will definitely capitalize it in our future revenue growth. So we have a strong belief in that. And so as I said in the call, we already finished the hardware validation with Tide Power, which is a state owned electricity company in Taiwan. Henry ChiangInterim Chief Executive Officer at Gogoro00:36:01We already finished the hardware validation last November and we are now in the sandbox with them. We hopefully we will finalize it in next six months. And once we have it or we have a certain we definitely will have a solid progress on our business planning. For since we already have 1,400,000 battery pack in the network and we are expecting to retire some of it from the Gen one battery. Gen one battery is actually we already deployed in our network since 2015. Henry ChiangInterim Chief Executive Officer at Gogoro00:36:42So we can see that is still stay in a very good healthy status and we want to make these Gen one battery to retire and repurpose that in our ESS. And for next coming few years, we will have more battery to retire and we are seeing these changes the needs of ESS is trending upwards. So we definitely will show more revenue progress on that part. For me, I think ESS in 2025 is a kickoff. We have finished our first product life cycle of our vehicle business and we see we already contain a great progress as an infrastructure company. Henry ChiangInterim Chief Executive Officer at Gogoro00:37:26So the second part of the growth, we definitely would depend on the progress of our ESS business and we would love to share with you, Fawn and the rest of the investor more in the next few earnings calls. So, Bruce, do you want to top up? Bruce AitkenChief Financial Officer at Gogoro00:37:44Yes. So, I'll take the second part of the question, Fawn, about international expansion. There's three things we believe are required for success in international markets. We require policy, we require partners and we require patience. And so, policies are being aligned at different speeds in different markets. Bruce AitkenChief Financial Officer at Gogoro00:38:03Partnerships are being aligned at different speeds in different markets. And then, obviously, we have to be patient and we have to wait for the right time, wait for the right partners, wait for the right policy before we'll be successful. We have been targeting Southeast Asian markets, as you know, for some time. We'll continue to do that. But we are still forecasting that for this year, the bulk of our revenue, 95 plus percent of our revenue will be from the Taiwan market. Bruce AitkenChief Financial Officer at Gogoro00:38:28As soon as there are better updates that we can provide and we hope that we'll have some of those updates soon, we'll provide them to you directly. Henry ChiangInterim Chief Executive Officer at Gogoro00:38:35Yes, we are looking forward to update in the next few weeks. So, we love to share that more in the next couple of weeks. Operator00:38:44Thank you for your questions, Paul. I'll hand back to Annie to Operator00:38:47check for any questions online. Back to you. Anny LiaoInvestor Relations at Gogoro00:38:52At this time, I will take a question from online. This is the question. Home energy storage has gotten very popular in recent years. Does Gogoro plan on releasing battery packs to consumers that can buy? Henry ChiangInterim Chief Executive Officer at Gogoro00:39:09Yes. We have seen a strong growth momentum in Taiwan as well. I think American has more and more home use of that, but I think Taiwan is growing. From our perspective, as an energy company, we have already we have been positioned ourselves as a service company. So no matter the first lifecycle usage of battery, we are providing as a subscription model. Henry ChiangInterim Chief Executive Officer at Gogoro00:39:40I'm not sure if we will consider to do a like a sellout type of business model, but definitely the definitely we will provide a service based on that. But we will consider to do a sellout, But we prefer to do but our thesis is to remain providing the services. Anny LiaoInvestor Relations at Gogoro00:40:18I have another question online. Are there any plans to license your technology patents to diversify your revenue? Bruce AitkenChief Financial Officer at Gogoro00:40:32We have PBG in there. There's two ways that we make revenue from licensing. One is we sell kits and parts to powered by the GoGro network partners, as Henry just mentioned, the PVGN partners. And so, that's effectively a licensing revenue business. We also already have licensing businesses with our software programs in international markets, wherefore all batteries are swapped. Bruce AitkenChief Financial Officer at Gogoro00:40:58There is a small licensing fee paid back to Gogrow. We would be open to broader licensing programs in foreign countries with people who want to run full enclosed and closed loop battery swapping networks with people who are interested in taking the battery pack design and deploying it locally in country. We're open to lots of different models, we're open to lots of different partnerships and would encourage anyone who's interested in working with us just to reach out directly and see how we can help. Our fundamental objective is to make urban mobility cleaner, greener and more sustainable. And so, if we can help people in a variety of countries achieve that objective and collectively make the world a cleaner, greener place, then we'll be happy to do that. Anny LiaoInvestor Relations at Gogoro00:41:54So at this time, there are no further questions. I'll turn the call over to Henry for some few closing remarks. Henry ChiangInterim Chief Executive Officer at Gogoro00:42:04Thanks, Annie. If you take one thing from today's call, please know that despite our recent challenges, Cogor is laser focused and completely committed to our customer experience and the goal of profitability. So thank you for your support of Fogo and thanks for calling into today's call. Operator00:42:27Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read moreParticipantsExecutivesAnny LiaoInvestor RelationsHenry ChiangInterim Chief Executive OfficerBruce AitkenChief Financial OfficerAnalystsFawne JiangEquity Research Analyst at The Benchmark Company LLCPowered by Conference Call Audio Live Call not available Earnings Conference CallGogoro Q4 202400:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsSlide DeckPress Release(8-K)Annual report(20-F) Gogoro Earnings HeadlinesGogoro Full Year 2024 Earnings: Revenues Beat Expectations, EPS LagsApril 5, 2025 | finance.yahoo.comGogoro Incorporation Registered ShsFebruary 23, 2025 | markets.businessinsider.com$2 Trillion Disappears Because of Fed's Secretive New Move$2 trillion has disappeared from the US government's books. The reason why is a new, secretive move being carried out by the Fed that has nothing to do with lowering or raising interest rates... but could soon have an enormous impact on your wealth.April 27, 2025 | Stansberry Research (Ad)Gogoro Inc (GGR) Q4 2024 Earnings Call Highlights: Navigating Challenges and Expanding HorizonsFebruary 14, 2025 | finance.yahoo.comGogoro Inc. (NASDAQ:GGR) Q4 2024 Earnings Call TranscriptFebruary 14, 2025 | insidermonkey.comGogoro targets energy business breakeven by 2026 with expanded R&D focusFebruary 14, 2025 | seekingalpha.comSee More Gogoro Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Gogoro? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Gogoro and other key companies, straight to your email. Email Address About GogoroGogoro (NASDAQ:GGR) provides battery swapping services in Taiwan, India, and internationally. It also develops Swap and Go battery system that delivers full power to electric-powered two-wheelers. In addition, the company offers battery swapping technology in the form of hardware, software, and service, including Gogoro Smart Batteries, GoStation, Gogoro Network Software & Battery Management Systems, Smartscooter, GoReward, and related components and kits. 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PresentationSkip to Participants Operator00:00:00Welcome to the Gogoro Inc. Twenty twenty four Fourth Quarter and Full Year Earnings Call. This conference call is now being recorded and broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. I'd like to turn the call over to the Gogoro team. Anny LiaoInvestor Relations at Gogoro00:00:24Welcome to Gogoro's twenty twenty four Q4 and Full Year Earnings Conference Call, hosted by our Interim CEO, Henry Jeong and CFO, Bruce Aitken. Hopefully, by now, you've seen our earnings release. If you haven't, it is available on the Investor Relations tab of our website, investor.gogoro.com. We are hosting our earnings conference call via live webcast through Gogoro's website, where you can also download all of the earnings release materials. We will also be displaying the materials on the webcast screen as we go. Anny LiaoInvestor Relations at Gogoro00:01:05If you are joining us through the conference call, your dial in lines are in listen only mode. Henry will provide a business update and outline our plans and vision for the future. Bruce will then go into the Q4 and full year financial results in more detail. And then we will open the line for Q and A and answer as many questions as time allows. As usual, we would like to remind everyone that today's discussions may contain forward looking statements that are subject to risks and uncertainties, which could cause actual results to differ materially from those contained in the forward looking statements. Anny LiaoInvestor Relations at Gogoro00:01:49Please refer to the forward looking statements that appear in our press release and investor presentation provided today. Now, I would like to turn the call over to Henry. Henry ChiangInterim Chief Executive Officer at Gogoro00:02:01Thank you. Success is forged in challenges. Gogol is embracing our challenges. The strongest companies don't just endure, they adapt, refocus and transform. At its core, Gogor is an energy company. Henry ChiangInterim Chief Executive Officer at Gogoro00:02:20We were founded to rethink urban energy and inspire the world to move more sustainably. Over the last three years, we have improved and extend our customer experience on the Gogo network by investing nearly $100,000,000 annually in infrastructure. Today, we operate the world's largest infrastructure of its kind and serve nearly 640,000 monthly subscribers. Our goal is clear, to achieve profitability and continued growth. In Q4, we took decisive actions to accelerate profitability, sharpening focus, realigning resources, streamlining operations and reducing costs. Henry ChiangInterim Chief Executive Officer at Gogoro00:03:11These efforts are showing early signs of success. Our energy business is on track to breakeven by 2026 and generate free cash flow in 2027. Additionally, we expect that our vehicle business will breakeven by 2028. We have three main business priorities, our energy business, our vehicle business, including partner OEMs and international expansion. First, we are focusing on our energy business. Henry ChiangInterim Chief Executive Officer at Gogoro00:03:45We ended the fourth quarter with nearly 640,000 accumulated subscribers, up from 587,000 subscribers at the end of the same quarter last year. In Q4 twenty twenty four, for the first time, revenue from the Gogoro battery swapping business surpassed revenue from vehicle sales. This marks a fundamental milestone for the business, one we expect to continue. Our batteries are built for longevity and second life applications. First generation battery in service for ten years still operate in a good state of health as anticipated and are now being repurposed for second life opportunities. Henry ChiangInterim Chief Executive Officer at Gogoro00:04:34The demand for both customer phasing and behind the media energy solutions is growing fast in Taiwan and globally. We see a rapidly evolving business with significant potential, And we are expanding our investments to capitalize on our large battery fleet. We have shift R and D funding toward our energy and second life battery initiatives. In 2025, we will increase energy R and D spending by approximately 26% versus 24%. Driving innovation is smarter, more resilient energy solutions for the future. Henry ChiangInterim Chief Executive Officer at Gogoro00:05:15Some of these solutions are already in commercial use, while others are in pilot testing with Ti Power. By the second half of twenty twenty five, we will have full certification for our energy storage and peak shaving products. I'm excited about the innovations we are bringing to market. These new products and services will not only enhance our battery tropics business, but also create new revenue streams. Next, we are streamlining our GoGo branded product lineup and expanded our Power by GoGo network program. Henry ChiangInterim Chief Executive Officer at Gogoro00:05:54We are improving customer experience by delivering vehicles and services they need, whether on performance, quality, convenience or affordability. We are taking two important steps. First, we will utilize common components to drive efficiency. Second, we are optimizing our supply chain and manufacturing partnerships to achieve economies of scale. We are excited for upcoming product launches in 2025 and 2026 and look forward to share more soon. Henry ChiangInterim Chief Executive Officer at Gogoro00:06:31Finally, while Taiwan remains Gogoro's primary revenue driver, we remain committed to international expansion and partnerships. The global shift to electric two wheeler is accelerating and interest in Gogoro's battery swapping ecosystem continues to grow. In 2024, we launched service with partner in Colombia, Singapore and Nepal with more expansions ahead. Southeast Asia is still very much in our plans, but these markets take time to develop. We are actively working with Castro to identify opportunities to accelerate adoption. Henry ChiangInterim Chief Executive Officer at Gogoro00:07:10Expect more concrete updates on this in the coming few weeks. In addition to realigning our business strategy, much of what we focus on during this transition has been streamlining operations and reducing costs. First, we increased the alignment of our engineering and product teams by establishing an integrated development center to enhance our cross functional collaboration and implement value added engineering. In this way, we will be developing products that better meet our customer needs at a reduced cost. Second, maintaining rigorous financial discipline. Henry ChiangInterim Chief Executive Officer at Gogoro00:07:57We conducted a top to bottom review of our fixed costs and removed unnecessary spending. We reviewed every hardware and energy product for its contribution margin and we will streamline product offerings accordingly. We restructured our organization and consolidate overall space to foster better team collaboration and reduce costs. We are instilling discipline across all businesses, leaders and teams with clear financial indicators and funding milestones. As a result, we have significantly reduced our fixed spending budget by more than 32% from $120,000,000 in 2024 to $82,000,000 in 2025. Henry ChiangInterim Chief Executive Officer at Gogoro00:08:54These changes result in a leaner, more efficient operational model that positions us for sustainable long term growth. While our focus is on the future, I want to take a moment to recognize some of our key achievements in 2024. During 2024, we received prestigious global accolades from top tier media outlets and industry research firms. Fast Company recognized Gogor as Asia Pacific's number one most innovative company of 2024 and '30 seventh globally. Fortune highlighted Gogor on its 2024 change the world list. Henry ChiangInterim Chief Executive Officer at Gogoro00:09:46MIT Technology Review recognized Gogra as a top 15 climate tech company to watch for the second year in a row. Also, we were honored by Frost and Sullivan as the 2024 Global Battery Swapping Company of the Year. We expanded our multi year collaboration with TSMC to promote green and sustainable transportation. In November, we held our seventh annual Taipei Bridge rider event, attracting nearly 2,000 riders from all over Taiwan, representing Gogoro, Gogshare and PPGN vehicles. During the year, we also received two major capital investment from Gosino and Castrol that results in a total of $75,000,000 invested in the second quarter. Henry ChiangInterim Chief Executive Officer at Gogoro00:10:44In closing, it should be clear that our primary goal is accelerating our path to profitability. We will achieve this objective by sharpening our focus on the energy business, realigning resources to deliver products and services that better meet our customer needs, streamlining operations and reducing costs for greater efficiency and team collaborations. The transition of the transportation and energy industries is a complex and challenging one. These are large and entrenched industries, deeply rooted in government regulations, slow changing consumer behavior and commoditized products. Gogoro's battery swapping ecosystem and smart scooters have already begun disrupting and tangibly demonstrating a better solution at scale. Henry ChiangInterim Chief Executive Officer at Gogoro00:11:43The opportunities ahead are bigger than ever. The demand for sustainable, efficient and scalable energy solutions is only increasing and Gogor is uniquely positioned to lead this transformation. We are embracing these challenges as a team with a shared commitment to achieving profitability. I'm personally incredibly passionate about Gogoro's future and look forward to share more as we continue to execute our strategy. I'd like to hand it to Bruce, who will walk through our Q4 and full year 2024 financials. Bruce AitkenChief Financial Officer at Gogoro00:12:30Thank you, Henry. I'm pleased to have this opportunity to provide a summary of our fourth quarter and full year 2024 results. Our full year revenue for 2024 was $310,500,000 within the previously provided range of $3.00 $5,000,000 to $315,000,000 In the fourth quarter, we took accounting charges of over $38,000,000 to simplify and strengthen our business. These impairment and exit costs materially impacted our fourth quarter and full year net loss results on an IFRS basis. However, we managed to deliver adjusted EBITDA of $46,500,000 representing a slight increase from twenty twenty three full year adjusted EBITDA. Bruce AitkenChief Financial Officer at Gogoro00:13:15These proactive steps allowed us to optimize our cost structure and set us up well for the future as a leaner and more efficient organization focused on delivering a clear path to profitability. Our energy business continues to grow, reinforcing the strength of our battery swapping and smart energy solutions. Gogoro and powered by Gogoro Network partner brands maintained its market leadership with a 72% market share of electric scooters, even as the overall two wheel market contracted slightly. As we closed out 2024, we leveraged this transition period to refine our strategy, sharpen our focus on energy services and ecosystem enablement and continue our international focus. We continue to accumulate new subscribers on our Gogoro network and that business continues to grow in line with expectations as we accumulate subscribers. Bruce AitkenChief Financial Officer at Gogoro00:14:07We ended the year with nearly 640,000 subscribers, up from 587,000 subscribers at the end of twenty twenty three and had $137,900,000 in battery swapping service revenue for the full year 2024, representing an increase of 4.6 over 2023. As we anticipated, the overall market for two wheelers in Taiwan in 2024 declined substantially, dropping 13.6% from 871,000 to 753,000 units. Electric two wheeler sales remained at 10.5 penetration and Gogoro Smart Scooters slightly increased our market share from 6.5% in 2023 to 7% in 2024 despite a small drop in Gogoro units sold. We continue to provide exceptional services to our customers who we are partnering with to reduce our carbon emission reduction goals. A total of over 12,000,000,000 kilometers have now been ridden, over 1,000,000 tons of carbon saved on the GoGrow network and a total of 400,000 swaps per day carried out. Bruce AitkenChief Financial Officer at Gogoro00:15:18Our international markets continue to deliver revenue and unit growth, but not at the pace we had down 20 down 20.2% year over year and down 19.2% year over year on a constant currency basis. For the full year, total revenue was $310,500,000 down 11.2 year over year and down 8.5% year over year on a constant currency basis. Battery swapping service revenue for the fourth quarter was $35,900,000 up 10.2% year over year and up 12.3% year over year on a constant currency basis. Battery swapping service revenue for the year was $137,900,000 up 4.6% year over year and up 8% year over year on a constant currency basis. The year over year increases in our battery swapping service revenue was primarily due to our large subscriber base and high retention rates. Bruce AitkenChief Financial Officer at Gogoro00:16:26We continue to see the strength of our subscription based business model and increasing customer base. Sales of hardware and other revenue for the fourth quarter was $37,100,000 down 37% year over year. The year over year decrease in sales of hardware and other revenues was driven by lower sales volume, a decrease in average selling price due to higher proportion of sales of entry level models, a decrease in our parts and accessory sales as non Gogrow branded accessories and parts proliferate, a $4,600,000 carve out of revenue associated with deferred revenue adjustments for a battery swapping service revenue promotion program, and these deferred revenues will be recognized over the next twenty four to thirty six months. Sales of hardware and other revenues for the full year were at $172,600,000 down 20.8% year over year and down 18.5% year over year on a constant currency basis. As a result of realigning our business, many one time events reduced our gross margin for both the fourth quarter of twenty twenty four and the full year of 2024. Bruce AitkenChief Financial Officer at Gogoro00:17:34For the full year 2024, gross margin was 2.4%, down from 14.6% last year, whereas non IFRS gross margin was 14.8, down from 16% last year. For the fourth quarter, gross margin was negative 8.1%, down from a positive 11.6% in the same quarter last year, while non IFRS gross margin was 14.2%, down from 14.8% in the same quarter last year. We believe the non IFRS figures more accurately reflect the real underlying nature of the business after excluding all one time impacts. We use these figures to measure our business performance. The decline in gross margin across both the fourth quarter and the full year was primarily driven by a combination of factors. Bruce AitkenChief Financial Officer at Gogoro00:18:23First, the $5,000,000 derecognition expense on components removed from battery packs during the battery upgrade process and $9,400,000 of total direct costs attributable with our battery upgrade initiatives secondly, an increase in sales of lower margin entry level models third, higher excess capacity costs due to reduced sales volume fourth, the full year impact of the $4,600,000 hardware revenue carve out that I described previously and fifth, a lower margin contribution from Gogoro OEM parts. For the last few quarters, we've been undertaking a program to carry out one time voluntary upgrades on certain battery packs, which will take several quarters to complete and will continue throughout 2025. These upgrades provide multiple benefits: more efficient deployment of our resources than replacing battery packs increasing lifetime capacity of each battery pack, including extending its first mobility use case useful life and solidifying the extra lifetime capacity of each battery pack to validate our second life thesis. These upgrades are expected to create economic benefits in the long term, but do generate a short term reduction in our gross margin as we continue carrying out the upgrades. We expect our cash position, gross profit and gross margin will continue to be impacted by the cost of these upgrades during 2025. Bruce AitkenChief Financial Officer at Gogoro00:19:45In order to improve our overall customer experience and to extend battery life, we plan to continue upgrading a substantial quantity of our battery packs, which are already in circulation and will improve designs of our battery packs to make them even more rugged, safe and long lasting. For the fourth quarter, net loss was $71,800,000 representing an increase of 45,100,000 from a net loss of $26,700,000 in the same quarter last year. The increase in net loss was due to a $29,900,000 increase in other operating expenses associated with various accounting charges for impairment and exit activities and the decrease of $16,500,000 in gross profit. We reduced operating expenses substantially in the fourth quarter, contributing $4,700,000 in savings. For the full year 2024, net loss was $123,200,000 representing a decrease of $47,200,000 from a net loss of $76,000,000 last year. Bruce AitkenChief Financial Officer at Gogoro00:20:52The increase in net loss was primarily due to a $43,500,000 decrease in gross profit driven by costs related to our battery upgrade initiatives, increase in impairment loss of $32,600,000 3 point 3 million dollars of exit activities and $1,600,000 in customer care packages. This was partially offset by a favorable change of $12,100,000 in the fair value of financial liabilities and a 25,100,000 reduction in operating expenses, excluding other operating expenses. For the fourth quarter, adjusted EBITDA was $8,800,000 representing a decrease of $200,000 from $9,000,000 in the same quarter last year. The decrease was primarily due to a $3,200,000 decrease in non IFRS gross profit margin, excluding share based compensation, depreciation and amortization, also excluding battery upgrade initiatives and exit activities. The decrease was partially offset by a reduction in operating expenses from various cost savings initiatives compared to the same quarter last year. Bruce AitkenChief Financial Officer at Gogoro00:22:00For the full year 2024, adjusted EBITDA was $46,500,000 representing an increase of $1,000,000 from $45,500,000 last year. The increase was primarily due to a reduction in operating expenses from various cost savings initiatives compared to the same quarter last year. The increase was partially offset by a $9,900,000 decrease in non IFRS gross profit margin. We generated $12,100,000 of operating cash inflow in 2024 compared to 2023 where we generated $59,100,000 of cash in operations. With $117,100,000 cash balance at the end of twenty twenty four and the additional credit facilities that are available to us, we believe we have sufficient sources of funding to meet our near term business growth objectives. Bruce AitkenChief Financial Officer at Gogoro00:22:53In the fourth quarter, we focused on simplifying our business and realigning our resources to focus on delivering exceptional products with increased efficiency. Our plan is to accelerate our path to profitability. These initiatives include structural and operating realignment across the company, consolidation and exit of facilities, accounting impairments alongside other reductions in operating expenses. As a result of these actions, we recognized $34,000,000 of non cash impairment charges for certain manufacturing assets in India, China and Taiwan, and a decline in value of our equity investment in The Philippines. We also recognized 4,800,000 of exit activities, including idle facilities and $3,300,000 of customer care package programs in 2024. Bruce AitkenChief Financial Officer at Gogoro00:23:44Gogoro's fourth quarter and full year 2024 results of operations were materially impacted by these charges, while the exit activities, impairment of assets and one time customer experience enhancement program had no impact on non IFRS net loss and adjusted EBITDA. Further, Gogoro is expected to create approximately $25,000,000 in savings in 2025 compared to 2024 as a result of the cost reduction plan. We expect our Gogoro network battery swapping business to reach profitability and deliver non IFRS net income in 2026 and our hardware sales business to reach profitability in 2028. We believe the Taiwan Two wheel market in 2025 will remain at 2024 levels. For the full year 2025, we expect our revenue to be between $295,000,000 to $315,000,000 on a constant currency basis, which would reflect 2025 Taiwan market condition and a conversion rate. Bruce AitkenChief Financial Officer at Gogoro00:24:45We estimate that approximately 95% of such full year revenue will be generated from the Taiwan market. Our IFRS gross margin will be continuously negatively impacted in the short term because of our ongoing and accelerated battery upgrade initiative, which is expected to be completed by the end of twenty twenty five. With the combination of ASP pressure from entry level models and delays in realizing anticipated international sales, we expect our non IFRS gross margin to remain at the current level in 2025. With that financial update, I'll hand the session back to the moderator for a Q and A session. Thank you. Anny LiaoInvestor Relations at Gogoro00:25:29Thank you, Henry and Bruce for the updates. As attendees are formulating their questions, I will ask two questions that we have collected. Question number one, can you provide additional color on your expectation of energy business to breakeven in 2026? Henry ChiangInterim Chief Executive Officer at Gogoro00:25:53Golar has always viewed ourselves as an energy company and we are now even more focused on this part of the business. We have accumulated approximately 640,000 subscribers, have very predictable ARPU and have extremely high retention rates of our subscribers. Based on this information, we can predict with relative accuracy our future factory swapping revenue and provided we control costs in line with our planned budget expenditures. We'll breakeven on a non IFRS basis in 2026. We are confident of that outcome. Anny LiaoInvestor Relations at Gogoro00:26:39Thank you, Henry. So question number two, what action plans can you implement to raise your stock price back above $1 so you don't get delisted? And when does the one hundred and eighty day grace period Anny LiaoInvestor Relations at Gogoro00:27:00end? Bruce AitkenChief Financial Officer at Gogoro00:27:01Thanks, Andy. Stock price is really a reflection of the market's perspective on our future strategy, our earning potential, our product roadmap and a number of other factors. So we hope that through this discussion we've had today, we've shed some light on our future plans and primarily to shed some light on our anticipation of accelerating our path to profitability and tightening our cost structure through a number of different actions. So with that, we trust that the market will have more confidence in our ability to deliver future business results. Bruce AitkenChief Financial Officer at Gogoro00:27:36Our plan is to remain listed on the NASDAQ. The deadline is April 28 to regain compliance and we're exploring a number of different alternative courses of action to ensure that we do regain compliance. Anny LiaoInvestor Relations at Gogoro00:27:52Thank you, Bruce. Operator, please open the line for Q and A session. Operator00:27:59Thank Operator00:28:26We will now take our first question from the line of Fawn Jiang from Benchmark Company. Please ask your question Fawn. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:28:36Thank you. Hi, Henley. Hi, Bruce. Thanks for taking my questions. A couple on my side. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:28:44First, it's very encouraging to hear your, I think, game plans in terms of path to profitability ahead. I think here we actually shed a bit more light earlier, but I just want to go a bit deeper with assumption to breakeven in 2026 on the net income and the free cash flow 2027 for the energy and also on the vehicle side to breakeven on 2028. What's your growth assumption underlying the growth assumption to achieve this, I think, again, profitability? Bruce AitkenChief Financial Officer at Gogoro00:29:22Thanks, Fawn. I'll take a first crack at that. So we've really shifted our focus in terms of how we think about profitability. We need to take an affordability approach to this. So we are actually using very conservative growth assumptions with regards to, for example, vehicle sales quantities in Taiwan. Bruce AitkenChief Financial Officer at Gogoro00:29:47For this year, as you can tell from our revenue guidance, with some growth in the energy business, there is limited growth forecasted from a vehicle standpoint. Last year, we sold a little bit under 50,000 units and this year our targets are roughly in line with that. If you just do the ASP backwards math from our revenue forecast. So we're confident that we will hit that 2026 energy breakeven, the 2027 cash flow and then 2028 the vehicle business should be able to breakeven as well. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:30:22Understood. Just a quick follow-up on that. I understand you guys focus on the cost optimization. It seems like you have very effective plan, game plan in place. Do you expect like what factors what kind of need to happen for you to potential return to growth? Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:30:45Or is that focused for the company down the road? Henry ChiangInterim Chief Executive Officer at Gogoro00:30:52So I think there's two side of it. The first side of it is our energy business that provide us constant growth in revenue and also EBITDA. So you can see we have a very good 2026 in energy business and also we are looking forward to the free cash flow in 2027. And for vehicle, I think we are now officially into the second cycle of Gogoro product roadmap. For the first cycle of product roadmap, we are required to do the vehicle from like a very top tier to the entry level tier because we are fundamentally Gogol network is infrastructure project. Henry ChiangInterim Chief Executive Officer at Gogoro00:31:34But based on the infrastructure, you require to have more subscribers. And given that our subscriber is at a breakeven point, it provides us another opportunity to revisit our product roadmap on the vehicle side. So we have a very well considered product roadmap for the next ten years from now. So we believe that product roadmap will help us to achieve the growth while helping us to achieve the breakeven of the vehicle business. Bruce AitkenChief Financial Officer at Gogoro00:32:10I think the thing I'll add to Fawn is, there's two sides of it, right? One is revenue growth and the other is cost control. And obviously, cost control is not our fundamental objective. It's an outcome of focusing on streamlining the business. As you saw, we've taken a number of accounting charges. Bruce AitkenChief Financial Officer at Gogoro00:32:28We're consolidating space. We're writing down some inventory if we don't believe there's future sales opportunities. We're looking at some streamlining of resources within the company. We're looking at streamlining of CapEx within the country for the company. And so, all of these things contribute to setting us up to a cost structure where this year, for example, our fixed costs will be reduced from $120,000,000 last year to $88,000,000 this year. Bruce AitkenChief Financial Officer at Gogoro00:32:53And then across the board, as we mentioned, we expect about $25,000,000 in savings. Whether it's marketing, whether it's facility space, whether it's rental of offices, whether it's our retail channel, we're looking at every single opportunity to get more efficient and the net results of that is a more optimized cost structure, which leads to an improved and faster path to profitability as well. Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:33:19Understood. That's very helpful. Just a quick follow-up on the growth side. I think Harry mentioned you guys see the energy storage as a new source of revenue for you down the road. I just wonder how should we size the market potential and your value proposition there? Fawne JiangEquity Research Analyst at The Benchmark Company LLC00:33:36And on top of course, you did mention, at international expansion is still part of your long term growth plan. I just wonder how should we think about the revenue potential, growth potential from that part of your business down the road? Henry ChiangInterim Chief Executive Officer at Gogoro00:33:52Yes. I think the energy storage is definitely something really big in Taiwan and we are expected to it will be very big in Southeast Asia, especially that the renewable energy is kicking in. And you can see from the policy side of it in Taiwan that we already seen a lot of policies coming out and our government is pushing hard on the renewable energy. And to adopt that renewable energy trend, there's a huge opportunity for us to provide energy storage service to the SMB, like a factory and household. As a matter of fact, we already have a pilot some of the pilot with like for example, I'm in Taipei and more than three forty six intersections has the battery inside of it. Henry ChiangInterim Chief Executive Officer at Gogoro00:34:47So when the power is breaking When there's a brownout. Yes, brownout. Our battery really helped been very helpful. So we have seen that is something we want to build our second revenue growth on that. The other side of it is people have been talking about like the second life battery usage and it's really hard for a traditional vehicle maker even with when they manufacture the EV, they don't have the data of the battery. Henry ChiangInterim Chief Executive Officer at Gogoro00:35:22They don't know how it was used and how it was be monitored. So I think since both are on all the assets and we have the technology, we have a very good AI algorithm to monitor the battery and also every single cell in the battery pack. We will definitely capitalize it in our future revenue growth. So we have a strong belief in that. And so as I said in the call, we already finished the hardware validation with Tide Power, which is a state owned electricity company in Taiwan. Henry ChiangInterim Chief Executive Officer at Gogoro00:36:01We already finished the hardware validation last November and we are now in the sandbox with them. We hopefully we will finalize it in next six months. And once we have it or we have a certain we definitely will have a solid progress on our business planning. For since we already have 1,400,000 battery pack in the network and we are expecting to retire some of it from the Gen one battery. Gen one battery is actually we already deployed in our network since 2015. Henry ChiangInterim Chief Executive Officer at Gogoro00:36:42So we can see that is still stay in a very good healthy status and we want to make these Gen one battery to retire and repurpose that in our ESS. And for next coming few years, we will have more battery to retire and we are seeing these changes the needs of ESS is trending upwards. So we definitely will show more revenue progress on that part. For me, I think ESS in 2025 is a kickoff. We have finished our first product life cycle of our vehicle business and we see we already contain a great progress as an infrastructure company. Henry ChiangInterim Chief Executive Officer at Gogoro00:37:26So the second part of the growth, we definitely would depend on the progress of our ESS business and we would love to share with you, Fawn and the rest of the investor more in the next few earnings calls. So, Bruce, do you want to top up? Bruce AitkenChief Financial Officer at Gogoro00:37:44Yes. So, I'll take the second part of the question, Fawn, about international expansion. There's three things we believe are required for success in international markets. We require policy, we require partners and we require patience. And so, policies are being aligned at different speeds in different markets. Bruce AitkenChief Financial Officer at Gogoro00:38:03Partnerships are being aligned at different speeds in different markets. And then, obviously, we have to be patient and we have to wait for the right time, wait for the right partners, wait for the right policy before we'll be successful. We have been targeting Southeast Asian markets, as you know, for some time. We'll continue to do that. But we are still forecasting that for this year, the bulk of our revenue, 95 plus percent of our revenue will be from the Taiwan market. Bruce AitkenChief Financial Officer at Gogoro00:38:28As soon as there are better updates that we can provide and we hope that we'll have some of those updates soon, we'll provide them to you directly. Henry ChiangInterim Chief Executive Officer at Gogoro00:38:35Yes, we are looking forward to update in the next few weeks. So, we love to share that more in the next couple of weeks. Operator00:38:44Thank you for your questions, Paul. I'll hand back to Annie to Operator00:38:47check for any questions online. Back to you. Anny LiaoInvestor Relations at Gogoro00:38:52At this time, I will take a question from online. This is the question. Home energy storage has gotten very popular in recent years. Does Gogoro plan on releasing battery packs to consumers that can buy? Henry ChiangInterim Chief Executive Officer at Gogoro00:39:09Yes. We have seen a strong growth momentum in Taiwan as well. I think American has more and more home use of that, but I think Taiwan is growing. From our perspective, as an energy company, we have already we have been positioned ourselves as a service company. So no matter the first lifecycle usage of battery, we are providing as a subscription model. Henry ChiangInterim Chief Executive Officer at Gogoro00:39:40I'm not sure if we will consider to do a like a sellout type of business model, but definitely the definitely we will provide a service based on that. But we will consider to do a sellout, But we prefer to do but our thesis is to remain providing the services. Anny LiaoInvestor Relations at Gogoro00:40:18I have another question online. Are there any plans to license your technology patents to diversify your revenue? Bruce AitkenChief Financial Officer at Gogoro00:40:32We have PBG in there. There's two ways that we make revenue from licensing. One is we sell kits and parts to powered by the GoGro network partners, as Henry just mentioned, the PVGN partners. And so, that's effectively a licensing revenue business. We also already have licensing businesses with our software programs in international markets, wherefore all batteries are swapped. Bruce AitkenChief Financial Officer at Gogoro00:40:58There is a small licensing fee paid back to Gogrow. We would be open to broader licensing programs in foreign countries with people who want to run full enclosed and closed loop battery swapping networks with people who are interested in taking the battery pack design and deploying it locally in country. We're open to lots of different models, we're open to lots of different partnerships and would encourage anyone who's interested in working with us just to reach out directly and see how we can help. Our fundamental objective is to make urban mobility cleaner, greener and more sustainable. And so, if we can help people in a variety of countries achieve that objective and collectively make the world a cleaner, greener place, then we'll be happy to do that. Anny LiaoInvestor Relations at Gogoro00:41:54So at this time, there are no further questions. I'll turn the call over to Henry for some few closing remarks. Henry ChiangInterim Chief Executive Officer at Gogoro00:42:04Thanks, Annie. If you take one thing from today's call, please know that despite our recent challenges, Cogor is laser focused and completely committed to our customer experience and the goal of profitability. So thank you for your support of Fogo and thanks for calling into today's call. Operator00:42:27Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.Read moreParticipantsExecutivesAnny LiaoInvestor RelationsHenry ChiangInterim Chief Executive OfficerBruce AitkenChief Financial OfficerAnalystsFawne JiangEquity Research Analyst at The Benchmark Company LLCPowered by