Nio's Q3 Results, Guidance Trump Estimates Amid Strong Sales Momentum

Chinese EV maker Nio Inc – ADR NIO reported Tuesday above-consensus third-quarter results, thanks to strong deliveries and margin improvement. The company also issued a strong fourth-quarter outlook.

Nio's Key Metrics: Nio reported third-quarter adjusted net loss of 996 million yuan, or $146.7 million. On a per-share basis, the adjusted loss per share was 0.82 yuan, or 12 cents.

Revenues climbed 146.4% year-over-year and 21.7% sequentially to 4.53 trillion yuan or $666.6 million. This compares to the year-ago loss of 35 cents per share and revenues of $262.47 million.

The consensus estimates had called for a loss of 17 cents per share on revenues of $655.28 million, while the company guided to revenues of $572.9 million.

Gross margin came in at 12.9%, inflecting from a negative 12.1% margin in the year-ago quarter. The metric also was better than the 8.4% margin reported for the second quarter.

Cash and cash equivalents, restricted cash and short-term investments stood at $3.3 billion as of Sept. 30.

Vehicle Deliveries: Nio delivered 12,206 vehicles in the third quarter, representing over 150% year-over-year increase and exceeding the company's guidance range of 11,000 to 11,500. It also marked a record quarterly number.

The momentum continued into October, as the EV maker delivered another monthly record. Nio's deliveries doubled to 5,055 vehicles in the month.

Vehicle sales were at 4.27 trillion yuan, or roughly 94% of the total revenues, and vehicle margins improved to 14.5% from -6.8% in the year-ago quarter and 9.7% in the preceding quarter. The margin improvement was attributed to record high deliveries in the third quarter, and further improvements in average selling price, material cost and manufacturing efficiency.

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Nio's Quarter That Was: During the quarter, the company announced a novel battery leasing scheme, named as "battery-as-a-service," which was meant to improve the affordability of its vehicles.

The service provides customers with the option of leasing batteries instead of outright purchases, bringing down the list price of the cars.
The company also raised $1.73 billion in gross proceeds through an equity offering.

Earlier this month, Nio announced a 100-kilowatt-hour battery pack that increased the NEDC range of vehicles to up to 615km.

Nio's Outlook: Nio guided to deliveries of 16,500-17,000 vehicles for the fourth quarter.

"Going forward, we remain committed to deploying more resources into the core technology innovations and delivering the best holistic product and service experiences to our user community in the pursuit of fortifying our long-term competitiveness in the market," said CEO William Li.

The company expects fourth-quarter revenues of $921.8 million to $947.9 million.

For the quarter, analysts on average model a loss of 15 cents per share and revenues of $805.66 million. The consensus call for the year is a loss of 73 cents per share and revenues of $2.28 billion.

The next most-awaited event is the Nio Day, scheduled for Jan. 9, wherein it's speculated to announce a new high-performance, premium, all-electric sedan, the ET7. The company is also widely expected to announce further battery enhancement by unveiling a 150-kWh battery pack.

This apart, Nio investors look ahead to word on the company's overseas foray and the in-house ADAS chip it is reportedly developing.

Stock Performance: Nio is among the best-performing stocks of the year, having gained about 1,050% in the year-to-period.

After advancing 2.22% to $46.59 in the regular trading session, the stock was down 3.07% to $45.11 in Tuesday's after-hours session.