REE Automotive (REE) 30 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the REE Automotive Q1 2024 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Brandon Friedman, Capital Markets Council. Please go ahead.

remind today's to forward-looking may like statements. would you call that include I our strategies, goals, and statements beliefs, Any describing plans, forward-looking assumptions statements. expectations, are forecasts projections,

those results Please variety a in as many beyond be company's the that are reasons, such actual which control, note different statements the of from Israel. our anticipated of for ongoing by forward-looking conflict may such military

risks company's XXXX, Commission, assume the update to future Form uncertainties principal with which law. statements, forward-looking Securities refer on and XX, of as XX-F any affect Please March no could required Exchange the and identifies prospects publicly our by and that filed these except obligation business, to We results.

today, see GAAP net expenses. non-GAAP including non-GAAP operating In of financial a most our and directly non-GAAP comparable measures. providing we addition, be measures discussing loss Please will press to the these or reconciliation release results measures for financial certain non-GAAP

follow our of with Listeners our on portion from the and investors is presentation website, Relations today, link along our or those release. presentation may webcast on Investor today's directly the which access invited available the to are press to

hosted REE's Co-Founder. CEO Daniel call by and Today's is Barel,

of joined Tech; Zaltsman, we our comments, Q&A Business CFO, our Following Daniel's call Officer, our for Chief our a by will and be today Josh portion Yaron COO, Tali Miller.

CEO. REE's and highlights. now turn will Co-Founder I the start will quarter to of formal the Daniel over first We Barel, our presentation call

to is We the get conference this to alike because strong We future an with On believe our behalf started of today. everyone XXXX milestones. those involved of time welcome for is in new REE, at call. that catalytic tracking new ideal momentum to and changing REE I first quarter current investors XXXX

some software-driven, first quarter, -- trucks medium-duty and America, Penske. demo namely in certified customers wire, first of the by including across world's the the the we world, of biggest uro North to During full fleets the deliveries commenced

in has which and manufacturers QX selling fleets. and not grow, service with sales a complete, and to with continues of to working strategy over already U.S. dealers compete includes through of and operators XXX in of automotive gained go-to-market potential access XX XX Our the fleet working traction network largest our centers and the

We the with starting to their of We electric U-Haul's their Penske, partner this are in electrification proud offer the value first believe to technology our our them and to to leadership delivers. of having industry demonstrates customers and support trucks the our solution being fleet.

FMVSS customer commercial full we per REE. our to world QX, aims the U.S. incentives PX-C powered eligible solidify trucks the now truck our software-driven achieve through electrification up became of During to of for on effectively to executing trucks first certification, first and $XXX,XXX are by by prove wire expedite This truck.

and REE Airbus has to very market validate proud for regulation the that our buoyed demonstrate are develop commercial state certification we tracking, segment, the electrification incentive EV response received, by powered potential by economics believe Beyond we've the autonomous the customers requiring lead to favorable fully highly and very power vehicle strong and by technology, our driven REE selected and by tax driving. our to We the fleet. vehicle

in vehicles our U.S. the certifying After

into we our represented our milestone started million orders dealers we is expect significant $XX demo how our and order expansion it to fleets. company. dealers. make a trucks clear delivery further shipping to book this This we This for want translate of quarter, And from to

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expect size to increase order dealers fleet We make as their

purchases from them.

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we across addition, and their not discussions incorporate with as complete wire are pursue technology corner ecosystem strategy we our transportation several automotive the complete, in by REE to In offering. electric to into manufacturers

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integration of how we our of Currently, driver adaptation core a their brought box a the into platform. upon full truck to product a can One, chassis of and be manufacturers automotive box believe REE electrify what is upon be PXC-cap can of of the any ways built A high the we technology the of to built X fleets is offer to REE which REE our Two, key our of customized degree cargo and and a strength and existing and three, or customized. Corners account in trucks. flexibility which market. purchase purchase chassis, area be can

full market. autonomous are further technological have REE leadership to REE announce that wire to driving pleased we been front, selected and validate technology. develop autonomous by driving This based vehicle on to we program opens On very fully by and solicifies autonomous our Airbus the

for autonomous and more by wire As become prevalent. control to of is integration expand system the to expected system continue full system development market peripheral autonomous and

manufacturing is to our ramping on our year, sales a book against deliveries into managing supply This smooth transition focus order meet operational and and goals.

the behind that As the is of we lifting heavy quarter, last us. believe stated we most

Our of low the EBITDA can producing when hundreds of in efficient breakeven material achieve low we to in we vehicles production operation bill thousands. the upon and believe parity mid means CapEx-light

production at has XXXX. an bring Our X-step production end XX,XXX of U.S. XXXX the and online We sets. continued annual automated plan vehicle approach manufacturing involves facility, U.K. which capacity our corders of by through of REE to

financing capital working production. mainly evaluating to scale to options currently allow us are We

market, tremendous technology our to advance commercial different the application electrify on continue vehicles. we execute across we As opportunity truck the to

I'll REE million, with ended elaborate touch million highlights a the CFO, comprised financial includes of $XX XXXX equivalents of long-term Zaltsman, $XX.X available on our Q&A on and cash cash, as facility. will credit QX and This needed. Yaron some be investments. short-term to liquidity

to $XX.X million, the Our loss decrease and Non-GAAP decreased a GAAP XX% decreased by in and net XX% quarter $XX.X narrowed loss to first quarter-over-quarter QX XX% decrease by XX% year-over-year. quarter-over-quarter net year-over-year. million

quarter-over-quarter, continued decrease strong consistent realized burn QX X% a flow start full to the with XX% cash that the XXXX with XXXX of behind when a positions Free our the the year decrease with in trend lucrative year-over-year reduction in in technology portion with and lifting of corder heavy EV a value XXXX uniquely chain. of majority commercial us REE we us, we believe

automotive, REE. are let's to the from thankful As to for And new our we and open are we those received said future support call lead Q&A. the now we welcome of to excited investors we the to

[Operator of Instructions] Your the from first question Craig comes ROTH from Irwin line Capital Partners.

of So as to to fleets the years. Penske. the essentially the Obviously, Daniel, leader handful talk the be X. you Or and and market number far a hands are adding where is year you where that the units demand names next deliver a more you're all of about technology number to the fleets next for prospect some Tier over couple of clearly your Airbus Pritchard like really select in But maybe years? into Can of service couple priorities get this for customers? as U-Haul goal is your in of operating Is adoption really you big many could of adding a a aiming you have different a of units. units see large want fleets of and REE the greatest you're

all, thanks question. good of for a It's First the question.

naturally course, order Penske, viewed and our the Airbus and production you so fact plan. to offer as trucks really think forth. of that you and are example, according I and very fulfill is And want are as answer we by Penske starting our excited, have mentioned, course, potential. for and we're of the And to big book others our to

of biggest it's ramp And Potential on in the vehicles others. industry. But believe as orders. We're this feel huge in traditionally speaking and going can And I able up. deliver the actual like up over ramp about that those in demand. wise, the is want depend and translate orders industry, I see many important confident we it into to see we time behind ramp-up huge. here we the going And think we to next the quarters be we're we it think is this few how as we to running to the as Penske all will and to I

bit about certain us clearly delivering on orders deliveries you of in units is evaluation X customers and year. evaluate catalysts can we on they're the orders putting Can that criteria you stock the of expect share I'm performance, follow this hands to. and how customer the customers. the Are U-Haul that that early looking they a later to is want with follow-on we that expecting for follow-on on product uptime that to the operating talk should little maybe customers the hours, products, they So confirm you're follow-on deliveries from these should overall doing the on for this biggest

different is answer have different that that fleets The for criteria.

weeks require a require longer. few Some and some

and climate specific or hot so in and Canada they're up so or for north require climate example, conditions, Some forth. in if, on

demo visibility, program deliveries. tech think sign I benefits very in orders trucks out in it so all of already we truck truck answers you production XXX so of and over that demo we've try and and forth, and agree with is the -- benefits. we the software-driven fleets. and think and would once as I to the majority that move And the when it for and be for forward And the air most . think relevant scale the the which TCO is our the low our speaks with the technology seen a itself great I that strong crossed and those and clearly I following customers very sit that maneuverability, rides the on updates like

I last Great. question, And then if may.

you revenue Can the quite needed talk year, controlled a costs execute about We're little you're Your R&D given spending the an this G&A. and number increased on investment year, bit have of frictional plan? to ramp impressive. really that's a customers and business serving maybe tightly this that you

Yes.

thank that. all, First recognizing of for you

significantly, trend the Yaron . you've as are there a engineering we where that, spend can to reduced spend would those , operational I we now the spend And on like which add? phase significantly you Yaron basis, reducing monthly until in believe, completed is going year-over-year. seen we add are believe, quarter-over-quarter and up place. expect, several I and communicated we efficiencies lower a lower, can to because in what on We forward,

cost continue will down. the So go to

to million to U.K. as we million $X expect than $X million generating from cash U.K. of per the month. expect $X grand in And plan QX. We the QX be of between the will it not more also roughly government part

going general, our year. in dramatically R&D costs will be down . during So the

Michael, line open. is

Hello, you Yes. hear . okay? can me

we can. Yes, .

Okay. Craig A from quick couple question. of follow-ups

far with. once that already that agreement in drive that so truck that Anything might on started platform runs asking normally, you might the out the it's what when or make you from First, your in would or to there that taking what on product any has to it a originally corner changes a way make to person to platform major it user-friendly when been the make a the you to have value product? That they maybe and a for have or can start a software to to ask once Do when of couple to years. and U-Haul drive doesn't they've someone you. comments with be they're appreciated. you made to change maybe you any make truck what a maybe user about change But the year,

Yes.

it's a question. great think I

and beauty I driven what think like SUV who That's of buy that it continued it's technology our properly. is to trucks medium-sized everybody program and and there. for to and driven before who recently to we've so with it it's people I it truck a drive even just not for great secret question, who have truck sauce before. the demo drives the drive feedback that easy wire, never a your very that. the seen That's the safely even like a feel is a people on drove all fact the

Airbuses R&D sounds just that But agreement of it Okay. those this make to it support airport up vehicle there's is follow want to almost vehicle vehicle. a a does the expense. way I'm themselves. I providing Got be but And curious be taking vehicles. be you're what applications company going you making came Airbus wanted a it. supply like Is that I air product in part Airbus the the the is major also about X picture of Is just that and is just for the to to R&D no news today, be and I'm think typically, platform that your a on in? look going the more curious, mentioned, that the to on example, on while like for of sure make . out just maybe slide, the vehicles not will maybe are you'll as right all just agreement they just not of the kind ultimate just ago. that? program

Yes.

Airplanes Airbus having And I which what compelling our by autonomy. by Airbus technology. and wire, is technology, we were very think found And is right? we this this -- which program think are around autonomous and mature wire, to I common, So selected joint let's why this by by trucks with a wire. is is are ready start in what wire

our of the seamless been saying is few for system a advantages connection driver. to The now years autonomous we've that

We're So It there that a now, of on for spend advancement autonomy not R&D it a providing And autonomously. to go major platform ready is spend, box we're achievement is thing for program. us. or additional be driver. development is out doing driven the no wire your which answering by systems question as is to the the

Great. Yes. last then question. And my

about to You had mentioned, talking comments the looking the ones platforming beyond that in the your that you're into their OEMs integrate you mentioned potentially products.

So this is not either. new

they're looking since currently came just those improve that just Or a make here. they it? producing they we get find yet they companies it of their to way can version But about or are that looking next-gen at made And companies market the are EVs? already how I own first to like make and sure, and their really times are behind talked to You've haven't want . are quickly. to

both. answer and traditional OEMs is new These The are OEMs. both

there to them that and have their them. technology, We've platform been Some some saying do are on do. upgrade with either ways the wire corners upgrade offering of not you buy X current buy EVs can to your

certified in by the the that put by able move what buy the to offering, lot we're we're a players just strategy vehicle is a explore the the we XXX% not of platform as I and behind. rest and the our compete. to that of much to to road exploring have opening still wire faster year, not full the buy build they our on that with go it gave how of can all discussion exactly to You sure a tailwind part do. to box and considering of and powered to a This following integrate want their assessor complete and lot . And achieved into like full us into corners the technology, vehicle fully earlier think the FMD of that's

I pass I'll the . along. Outstanding. appreciate it color.

from the Your Jeff of next question from TD Cowen comes line . Osborne

just on are diversified? Maybe are also be partners? vehicle there of line the would applications Any following space? last helpful. questioning, commercial these for more the Or Are that up details those Daniel, they in new

and towards of interest going and vehicles. there concentrating towards higher that naturally, we integrate private -- both of we've is what like a And majority lower we're class the I you OEMs, in that are commercial passenger categories into evolution once vehicles, higher in heavier that, vehicles on large payload. other but think seen duty into can there vehicles there's say --

is majority given right to already in And the think then been that has space, commercial R&D that the are just majority vehicle the it the of done.

engineering relative with required So partners? these the to margin be each limited, that corners of these incremental do just selling working application for you the somewhat revenue weigh new would accretion would partners just be how by trade-off OpEx for and

Yes.

naturally the commercial vehicles for by is mechanical, some order to the shorter It's vehicles. already same. time and but is same because burden the R&D wire for some technology vehicles ready, vehicles that market on for built to and we is mainly So required there The the are corners commercial into or be passenger but investment it this see example, aviation, or would adaptation, applications, mechanical heavy make in other as majority us. don't passenger a

and And you in the length, but has naturally, corners always On completely capabilities only the remind contrary, this technology, core we I margins and discuss the corners. spot. also our CapEx for our we are that That the deployed our highest the Margin-wise, do corners there. sweet when been can control. our we are

already commercialization at ready they're scale. for So

Got few questions. housekeeping it. And then maybe just a

quarter, that I $XXX,XXX demo . vehicle? in the With understand the the was where X truck of revenue from. was wanted the to just a that sale came

So the sales vehicles. from a platform and not

when the over the And then months. first to in X revenue it. partners out Is the Got X laid third vehicles variety that the quarter? last you've you of that through would fourth from expect and still

don't I few that scale probably all starting are in the $XX The you can today, books, thing only we we recognize can information provide roughly million, say that months' we is revenues a that which think time. order So of can -- to after we okay? to

drive? our been there produced own then just far or . people that And one, for thus maybe the wild the test many out Daniel, are vehicles in last either how have to

mentioned until to and more Penske, rate all. scale. terms in to delivered continue I we're low on mentioned the mean continue more . X Yaron Airbus, having now come production that will them you've before, We've We've deliver got up vehicles. what currently of we'll

Your the from Dayal of next comes Amit line Wainwright. from H.C. question

million $X $X see development million much to which month going this $X million indicated CapEx Good break forward, is to how the the a spend million operating everyone. lower how ramping, This within efforts $X than all of Hello, can highlighted little had you bit per is costs? call. earnings and you is last you you to $X out business million, Thank much

Sure, Yaron, would you mind.

million So The rest roughly . CapEx month. per $X is is operation.

Okay. everything requirements kind for shoulders meet Airbus that features ready, that will standards whatever ask contributing or Will Understood. may vehicle fall their meet any of development to on the have certain vehicle is modifications, terms Airbus to indicated, cetera. your to autonomous on according needs. The or et fall platform, they in activity of you to might for

the fulfilled the softer. part We've be truck. rest delivered of We the our agreement, would

So no there ready. The there needed. changes is capable and is truck fully

Interesting.

here on, working waiting basically, the on take from the capital bill. So will right on decisions can meet book are how that, side in the And the then we that Is on the financing customer setup in now? execution you of you requirements. terms based to

then I the demos, believe Initial I industry, they are provide they so. ramp-up mean, on fleet. traditionally, the fleet right, the a orders. test and little bit smaller do again orders vehicle usually and start in depends

and in the $XX the that what impact At trucks Remember, need have that's order about about on guys million to clear trucks have And Penske, into to just expect to their just Some growth. book to fleets customers. fleet over smaller. now value. our what XXX and book and offer on goes worth side we like visibility specification have build started before what this we go significant putting plan. our it And others over moment and is value, the in production some on we'll heavier we we start timing,

Understood.

vehicle some side X you think How last the And market. to things? a side? the on hybrid type sentiment are into translating X positioned of fleet hybrid of high emerges, there around do the you for interest if development? with vehicles, that how that that in Is adoption is passenger of deal sort Just Recent level. at .

strong a in the Yes. We that very demand see market, keeps on growing. and currently demand

lot vehicle vehicle for EVs, X. we with. effect segment vehicle work work there's There a seen a and of the lower them the different see is segment. have X We than classes, you categories there a in don't the demand think the passenger private. the we segment -- And between sorry, -- demand at hybrids not see higher commercial and in it's much lot on this adaptation would I the for a lower the therefore, is market to rate we commercial point. very much, demand any Usually, in of different in

from from comes the . Craig Irwin Capital question of ROTH next Your Partners. line

adjusted next EBITDA EPS, clearly bit what provision. came a your delta was So were levels the tax little million what over the could the tax $X.X Can give be of adjusted And us quarters? color of what on any looking maybe biggest do you we tax from a a ahead just was? But provision little visibility have you for. few

which plan. provision the we tax accounting provision the R&D in have the part The is an to due U.K. of regulation, as

So a it's it's and a accounting it's accounting, cash only onetime not probably . movement, provision.

provision. accounting noncash onetime So

is That correct.

There be to continue. Please you. no this seems time. Thank further questions at

the So thank . the here thank Have the you REE commend join time to the great world want this taking a strong all of across so kicking proud. it of everybody excellent, I and year, course, work an and I want team much. today. us excellent in quarter off Thank first day. for to And to for

call. Thank for today's participating. concludes you This conference

now may disconnect. You