Nio's Q1 Revenue Tops Estimates, Forward Guidance Disappoints: What EV Investors Need To Know

Chinese electric vehicle startup Nio, Inc. NIO reported first-quarter revenues Thursday that exceeded expectations, while its bottom-line reflected cost pressures.

The company guided to below-consensus revenue for the second quarter. Despite the near-term headwinds, the company said orders remained at a record in May. The company also confirmed the launch timeframes for its ET5 sedan and ES7 SUV.

What Happened: Shanghai-headquartered Nio reported a first-quarter non-GAAP loss of 0.79 yuan (13 cents) per share, wider than the year-ago loss of 0.23 yuan per share. In the fourth quarter, Nio's non-GAAP loss per share came in at 1.07 yuan per share.

Analysts, on average, estimated a loss of 13 cents per share.

Revenue climbed 24.2% year-over-year and 0.1% sequentially to $1.56 billion. The topline, however, exceeded the consensus of $1.49 billion. Vehicle sales accounted for roughly 94% of the total revenue.

The company's first-quarter deliveries came in at a record 25,768 units. After an anemic April, deliveries inflected higher in May.

The first-quarter vehicle margin contracted about 310 basis points year-over-year to 18.1%. It also trailed the previous quarter's 20.9%. The EV industry came under significant input cost pressure in the first quarter following the Ukraine war that led to spikes in battery material and other component prices.

The gross margin came in at 16.8%, down 490 basis points year-over-year and 260 basis points sequentially.

Cash and cash equivalents, restricted cash and short-term investments stood at $8.4 billion, as of March 31.

Related Link: Nio Surges As Singapore Listing Announced For May 20: What Investors Should Know

What's Next: Nio guided to second-quarter deliveries of 23,000 to 25,000 units, up about 5%-14.2% from the year-ago period. The soft guidance reflects widespread production disruptions in the wake of the COVID-19 resurgence in China. Most companies shuttered operation for about three weeks before resuming on a suboptimal scale.

"Despite the volatilities of supply chain and the challenges in vehicle delivery resulting from the recent COVID-19 resurgence, we witnessed robust demand for our complementary products and achieved an all-time high order inflow in May 2022," said William Li, Nio's founder, chairman and chief executive officer.

Nio expects revenue of $1.473 billion to $1.591 billion for the second quarter, representing a 10.6%-19.4% year-over-year increase. The guidance is much below the consensus estimate of $1.86 billion.

The company expects to begin deliveries of its ET5 sedan in September. The new ES7 SUV, a mid-to-large five-seater SUV built based on Nio's NT2.0 platform, will launch in June. The company will begin deliveries of the same in late August.

In premarket trading on Thursday, Nio stock was slipping 3.09% to $19.54, according to Benzinga Pro data.
Photo courtesy of Nio.