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Gogoro Releases Second Quarter 2022 Financial Results

11 August 2022

Gogoro Inc. (Nasdaq: GGR), a global technology leader in battery swapping ecosystems that enable sustainable mobility solutions for cities, today released its financial results for its second quarter ended June 30, 2022.

Second Quarter Highlights

  • Revenue of $90.7 million, up 5.3% year-over-year despite the impact of COVID and continued adverse market conditions in Taiwan and other growth markets. Our revenue was negatively impacted by the approximately 6.7% change in exchange rate between TWD, our booking currency, and USD, our reporting currency, since the beginning of the year
  • Gogoro Network revenue of $30.4 million, up 29.1% year-over-year, demonstrating continued growth, an accumulating subscriber base and recurring revenue generated by its battery swapping business model
  • Gross margin of 14.0%, up 1.3% year-over-year and non-IFRS gross margin of 15.5%, up 2.8% year-over-year, based on improved product portfolio mix and improved Gogoro Network cost efficiency
  • Continued growth in Gogoro Network subscriber base to more than 484,000 monthly battery swapping subscribers
  • Net loss of $121.1 million, up from $20.6 million in the same quarter last year primarily due to a one-time $178.8 million listing expense for the SPAC merger transaction as required under IFRS accounting and adjusted EBITDA of $9.3 million, up 14.4% from $8.1 million in the same quarter last year

"Despite the broad second quarter impact COVID had in Taiwan and across the region, Gogoro's second quarter year-over-year revenue increased by 5.3% to $90.7 million. Our revenue would have been marginally higher had it not been for the negative impact of the currency exchange rate between the New Taiwan Dollar and the USD, that amounted to approximately 6.7% since the beginning of the year. Notably, Gogoro Network revenue saw a 29.1% year-over-year increase to $30.4 million driven by an increase in total subscribers and the recurring nature of our business model," said Horace Luke, founder, chairman, and chief executive officer of Gogoro. "These results demonstrate the strength and potential growth of our battery swapping ecosystem in Taiwan and in our new markets, but given the current adverse market conditions, global macroeconomic challenges, and COVID uncertainty, we are taking a conservative approach to our second half business plans."

Second Quarter 2022 Financial Overview

Operating Revenues 

For the second quarter, operating revenues was $90.7 million, up 5.3% from $86.1 million in the same quarter last year. Gogoro Network revenue for the second quarter was $30.4 million, up 29.1% from $23.6 million in the same quarter last year. Total subscribers increased to more than 484,000 monthly battery swapping users at the end of the second quarter. This increase in battery swapping revenue was primarily due to the accumulating subscriber base and the high retention rate of all subscribers. Sales of hardware and other revenues for the second quarter was $60.3 million, down 3.6% from $62.6 million in the same quarter last year. This was due to general consumer conservatism in Taiwan which was driven by COVID and the associated drop in retail foot-traffic and vehicle sales year-over-year. However, sales of Gogoro vehicles for the first half of 2022 grew by 3.5% compared to the first half of 2021.

Gross Margin

For the second quarter, gross margin was 14.0%, up from 12.7% in the same quarter last year and non-IFRS gross margin was 15.5%, up from 12.7%. These gross margin and non-IFRS gross margin increases were driven by an increase in the average selling price of our vehicles, favorable changes in our product mix, and the improved cost efficiency of Gogoro's Network operations. Non-IFRS gross margin is a non-IFRS measure, see Use of Non-IFRS Financial Measures for a description of the non-IFRS measures and Reconciliation of IFRS Financial Metrics to Non-IFRS for a reconciliation of the company's non-IFRS financial measures to their most directly comparable IFRS measures.

Net Loss

For the second quarter, net loss was $121.1 million, up $100.5 million from $20.6 million in the same quarter last year primarily due to a one-time $178.8 million listing expense for the SPAC merger transaction as required under IFRS accounting. Additional contributors included $18.5 million in merger expenses and $11.0 million in share-based compensation expense, which were partially offset by an increase in the fair market value of outstanding warrants and earn-out shares of $104.1 million. Non-IFRS net loss was $16.8 million, up $0.1 million from $16.7 million in the same quarter last year. Non-IFRS net loss is a non-IFRS measure, see Use of Non-IFRS Financial Measures for a description of the non-IFRS measures and Reconciliation of IFRS Financial Metrics to Non-IFRS for a reconciliation of the company's non-IFRS financial measures to their most directly comparable IFRS measures.

Adjusted EBITDA

For the second quarter, adjusted EBITDA was $9.3 million, up 14.4% from $8.1 million in the same quarter last year.  The increase was primarily due to non-IFRS gross profit increasing to $14.1 million, up 28.1% from $11.0 million in the same quarter last year as a result of the continuous growth of Gogoro Network business in the second quarter. Adjusted EBITDA is a non-IFRS measure, see Use of Non-IFRS Financial Measures for a description of the non-IFRS measures and Reconciliation of IFRS Financial Metrics to Non-IFRS for a reconciliation of the company's non-IFRS financial measures to their most directly comparable IFRS measures.

Liquidity

Cash balance at the end of second quarter was $378.8 million.

Revised 2022 Guidance

Given the current market and macroeconomic conditions combined with the impact of COVID in Taiwan and continued COVID and adverse market conditions in China and other markets, we are adjusting our 2022 revenue guidance to $380.0 million to $410.0 million. We will focus on maintaining our gross margin in the second half of the year.

  • Third quarter revenue is expected to contribute around 25% of the full year revenue.
  • We estimate that almost all 2022 full year revenue will be from the Taiwan market.

Conference Call Information

Gogoro's management team will hold an earnings Webcast on August 11th, 2022, at 8:00 a.m. Eastern Time to discuss the Company's second quarter 2022 financial and business results and outlook.

Investors may access the webcast, supplemental financial information and investor presentation at Gogoro's investor relations website (https://investor.gogoro.com) under the "Events" section. A replay, the investor presentation and the earnings call script will be available 24 hours after the conclusion of the webcast and archived for one year.

About Gogoro

Founded in 2011 to rethink urban energy and inspire the world to move through cities in smarter and more sustainable ways, Gogoro leverages the power of innovation to change the way urban energy is distributed and consumed. Gogoro's battery swapping and vehicle platforms offer a smart, proven and sustainable long-term ecosystem for delivering a new approach to urban mobility. Gogoro has quickly become an innovation leader in vehicle design and electric propulsion, smart battery design, battery swapping, and advanced cloud services that utilize artificial intelligence to manage battery availability and safety. The challenge is massive, but the opportunity to disrupt the status quo, establish new standards, and achieve new levels of sustainable transportation growth in densely populated cities is even greater. For more information, visit https://www.gogoro.com/news/ and follow Gogoro on Twitter: @wearegogoro.

Forward Looking Statements

This communication contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements generally relate to future events or Gogoro's future financial or operating performance. In some cases, you can identify forward looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "going to," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern Gogoro's expectations, strategy, priorities, plans or intentions. Forward-looking statements in this communication include, but are not limited to, statements in the section entitled, "Revised 2022 Guidance," such as estimates regarding revenue and Gogoro's revenue generated from the Taiwan market, Gogoro's beliefs regarding Gogoro's future operating performance including its ability to grow its subscriber base, projections of market opportunity and market share, potential growth of Gogoro's battery swapping ecosystem in Taiwan and in new markets, the capability of Gogoro's technology, Gogoro's business plans including its plans to grow and expand in Taiwan and internationally, the expected use of proceeds from the merger, and statements by Gogoro's founder, chairman, and chief executive officer.

Gogoro's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including risks related to the impact of the COVID-19 pandemic, risks related to macroeconomic factors including inflation and consumer confidence, risks related to political tensions, Gogoro's ability to effectively manage its growth, Gogoro's ability to launch and ramp up the production of its products and control its manufacturing costs and manage its supply chain issues, Gogoro's risks related to ability to expand its sales and marketing abilities, Gogoro's ability to expand effectively into new markets, foreign exchange fluctuations, Gogoro's ability to develop and maintain relationships with its partners, risks related to operating in the PRC, regulatory risks and Gogoro's risks related to strategic collaborations, risks related to the China market and other international markets, alliances or joint ventures including Gogoro's ability to enter into and execute its plans related to strategic collaborations, alliances or joint ventures in order for such strategic collaborations, alliances or joint ventures to be successful and generate revenue, Gogoro's ability to raise additional capital, the risks related to the need for Gogoro to invest more capital in strategic collaborations, alliances or joint ventures, and the risk of Gogoro having to update the accounting treatment for its joint ventures. The forward looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described in Gogoro's filings with the Securities and Exchange Commission ("SEC"), including in Gogoro's Form 20-F for the year ended December 31, 2021, which was filed on May 2, 2022 and in its subsequent filings with the SEC, copies of which are available on our website and on the SEC's website at www.sec.gov. The forward looking statements in this communication are based on information available to Gogoro as of the date hereof, and Gogoro disclaims any obligation to update any forward looking statements, except as required by law.

Use of Non-IFRS Financial Measures

This press release and accompanying tables contain certain non-International Financial Reporting Standards as issued by the International Accounting Standards Board (collectively, "IFRS") financial measures including non-IFRS gross profit, non-IFRS gross margin, Non-IFRS Net Loss, EBITDA and Adjusted EBITDA.

Non-IFRS Gross Profit and Gross Margin. Gogoro defines non-IFRS gross profit and gross margin as gross profit and gross margin excluding share-based compensation expense.

Share-based Compensation Expense consists of non-cash charges related to the fair value of restricted stock units awarded to employees. The Company believes that the exclusion of these non-cash charges provides for more accurate comparisons of our operating results to our peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact of share-based compensation expense on its operating results.

Non-IFRS Net Loss. Gogoro defines non-IFRS net loss as net loss excluding share-based compensation expense, the change in fair value of financial liabilities including revaluation of redeemable preferred shares, change in fair value of earnout and warrants associated with the merger of Poema, listing expense and onetime non-recurring costs associated with the merger. These amounts do not reflect the impact of any related tax effects.

EBITDA. Gogoro defines EBITDA, as net loss excluding interest expense, net, provision for income tax, depreciation, and amortization. These amounts do not reflect the impact of any related tax effects.

Adjusted EBITDA. Gogoro defines Adjusted EBITDA, as EBITDA excluding share-based compensation expense, the change in fair value of financial liabilities including revaluation of redeemable preferred shares, change in fair value of earnout and warrants associated with the merger of Poema, listing expense and onetime non-recurring costs associated with the merger. These amounts do not reflect the impact of any related tax effects.

Acquisition-related Expenses. Gogoro incurs acquisition-related and other expenses which consist of costs incurred after the issuance of a definitive term sheet for a particular transaction and include legal,  banker, accounting, printer costs, valuation and other advisory fees. Management excludes these items for the purposes of calculating non-IFRS adjusted EBITDA. Gogoro generally would not have otherwise incurred such expenses in the periods presented as part of its continuing operations. The acquisition related expenses are not recurring with respect to past transactions, can be inconsistent in amount and frequency from period to period and are significantly impacted by the timing and magnitude of Gogoro's acquisitions. While these expenses are not recurring with respect to past transactions, Gogoro generally will incur these expenses in connection with any future acquisitions.

Listing Expense. In connection with the merger with Poema, the excess fair value of shares issued by Gogoro in exchanged for the net assets of Poema was recorded as listing expense in operating expense. The listing expense for the merger is not recurring with respect to past transactions, can be inconsistent in amount and frequency from period to period and are significantly impacted by the timing and magnitude of the merger.

These non-IFRS financial measures exclude share-based compensation expense, interest expense, income tax, depreciation and amortization, change in fair value of financial liabilities including revaluation of redeemable preferred shares, change in fair value of earnout and warrants associated with the merger of Poema, listing expense and onetime non-recurring costs associated with the merger. The company uses these non-IFRS financial measures internally in analyzing its financial results and believes that these non-IFRS financial measures are useful to investors as an additional tool to evaluate ongoing operating results and trends. In addition, these measures are the primary indicators management uses as a basis for its planning and forecasting for future periods.

Non-IFRS financial measures are not meant to be considered in isolation or as a substitute for the comparable IFRS financial measures. Non-IFRS financial measures are subject to limitations and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with IFRS. Non-IFRS financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. A description of these non-IFRS financial measures has been provided above and a reconciliation of the company's non-IFRS financial measures to their most directly comparable IFRS measures have been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.

GOGORO INC.

Condensed Consolidated Balance Sheet

(unaudited)

(in thousands of U.S. dollars)

 
 

June 30,

 

December 31,

 

2022

 

2021

ASSETS

     

Current assets:

     

Cash and cash equivalents

$                378,756

 

$                217,429

Trade receivables

18,774

 

16,625

Inventories

103,108

 

73,137

Prepayments

58,886

 

10,157

Other current assets

20,295

 

40,682

Total current assets

579,819

 

358,030

       

Property, plant and equipment

436,914

 

454,741

Right-of-use assets

22,905

 

26,277

Other non-current assets

5,078

 

5,352

Total assets

$             1,044,716

 

$                844,400

       

LIABILITIES AND EQUITY

     

Current liabilities:

     

Loan and borrowing obligations, current

$                383,191

 

$                238,434

Financial liabilities at fair value

149,082

 

107,862

Notes payable and trade payable

82,361

 

53,258

Current liabilities

18,531

 

18,753

Lease liabilities, current

10,732

 

11,153

Provisions for product warranty, current

4,357

 

6,480

Other payables and current liability

42,959

 

44,603

Total current liabilities

691,213

 

480,543

       

Long-term borrowing obligations, non-current

79,742

 

195,883

Provisions for product warranty, non-current

9,082

 

9,150

Lease liabilities - non-current

12,604

 

15,589

Other non-current liabilities

16,008

 

19,522

Total liabilities

808,649

 

720,687

       

Total equity

236,067

 

123,713

Total liabilities and equity

$             1,044,716

 

$                844,400

GOGORO INC.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

(in thousands of U.S. dollars, except net loss per share)

 
 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Operating revenues

$           90,723

 

$           86,116

 

$         185,178

 

$         144,787

Cost of revenues

78,047

 

75,139

 

159,604

 

126,363

Gross profit

12,676

 

10,977

 

25,574

 

18,424

Operating expenses:

             

Selling and marketing expenses

14,698

 

13,390

 

27,713

 

25,293

General and administrative expenses

31,647

 

5,935

 

42,030

 

12,771

Research and development expenses

11,601

 

7,466

 

20,945

 

14,339

Listing expense

178,804

 

 

178,804

 

Total operating expenses

236,750

 

26,791

 

269,492

 

52,403

Loss from operations

(224,074)

 

(15,814)

 

(243,918)

 

(33,979)

Non-operating income and expenses:

             

Interest expense, net

(2,439)

 

(2,120)

 

(5,289)

 

(4,777)

Other income, net

1,369

 

1,207

 

2,633

 

2,777

Change in fair value of financial liabilities

104,092

 

(3,836)

 

103,805

 

(3,836)

Total non-operating income (expenses)

103,022

 

(4,749)

 

101,149

 

(5,836)

Net loss

(121,052)

 

(20,563)

 

(142,769)

 

(39,815)

Other comprehensive income:

             

Exchange differences on translating foreign operations

(6,574)

 

3,834

 

(12,700)

 

1,771

Total comprehensive loss

$        (127,626)

 

$          (16,729)

 

$        (155,469)

 

$          (38,044)

               

Basic and diluted net loss per common share

$              (0.53)

 

$              (0.11)

 

$              (0.67)

 

$              (0.21)

Shares used in computing basic and diluted net loss per common share

230,290

 

193,334

 

211,914

 

193,334

               
 
 

Three Months Ended June 30,

 

Six Months Ended June 30,

Operating revenues:

2022

 

2021

 

2022

 

2021

Sales of hardware and other revenues

$           60,303

 

$           62,555

 

$         125,377

 

$           97,335

Gogoro Network revenue

30,420

 

23,561

 

59,801

 

47,452

Operating revenues

$           90,723

 

$           86,116

 

$         185,178

 

$         144,787

GOGORO INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands of U.S. dollars)

 
 

Six Months Ended June 30,

 

2022

 

2021

Cash flows from operating activities

     

Net loss

$                         (142,769)

 

$                           (39,815)

Adjustments for:

     

Depreciation and amortization

49,081

 

45,378

Expected credit loss

260

 

462

Change in fair value of financial liabilities

(103,805)

 

3,836

Interest expense, net

5,289

 

4,776

Share-based compensation expense

15,381

 

Loss on disposal of property and equipment, net

309

 

85

Write-down and reversal inventories

1,804

 

1,170

Recognition of listing expense

178,804

 

Changes in operating assets and liabilities:

     

Trade receivables

(2,409)

 

(1,997)

Inventories

(31,775)

 

10,986

Prepayments and other current assets

(52,523)

 

(3,545)

Notes payable and trade payables

29,103

 

8,677

Contract liabilities

(222)

 

(1,543)

Other payables and liabilities

(4,485)

 

(2,108)

Provisions for product warranty

(2,191)

 

(1,798)

Cash provided by (used in) operations

(60,148)

 

24,564

Interest expense and tax paid, net

(5,508)

 

(4,682)

Net cash provided by (used in) operating activities

(65,656)

 

19,882

Cash flows from investing activities

     

Property, plant and equipment, net

(57,685)

 

(53,838)

Increase in refundable deposits

(77)

 

(231)

Payments of intangible assets, net

(287)

 

(313)

Decrease in time deposits and others

23,579

 

54,470

Net cash provided by (used in) investing activities

(34,470)

 

88

Cash flows from financing activities

     

Proceeds from borrowings

79,412

 

59,969

Repayments of borrowings

(26,059)

 

(4,482)

Cash capital increase

326,965

 

Repayments of loss on financial liabilities at fair value

(108,149)

 

(3,490)

Refund of guarantee deposits received

321

 

(77)

Repayment of the principal portion of lease liabilities

(6,508)

 

(5,974)

Net cash provided by financing activities

265,982

 

45,946

Exchange differences on translating foreign operations

(4,529)

 

98

Net increase in cash and cash equivalents

161,327

 

66,014

Cash and cash equivalents at the beginning of the period

217,429

 

119,042

Cash and cash equivalents at the end of the period

$                           378,756

 

$                           185,056

GOGORO INC.

Reconciliation of IFRS Financial Metrics to Non-IFRS

(unaudited)

(in thousands of U.S. dollars)

 

Reconciliation of Gross Profit and Gross Margin to Non-IFRS Gross Profit and Gross Margin

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Gross profit and gross margin

$  12,676

14.0 %

 

$  10,977

12.7 %

 

$  25,574

13.8 %

 

$  18,424

12.7 %

Share-based compensation expense

1,389

   

   

1,918

   

 

Non-IFRS gross profit and gross margin

$  14,065

15.5 %

 

$  10,977

12.7 %

 

$  27,492

14.8 %

 

$  18,424

12.7 %

                       
 

Reconciliation of Net Loss to Non-IFRS Net Loss

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Net loss

$            (121,052)

 

$              (20,563)

 

$            (142,769)

 

$              (39,815)

Share based compensation

11,019

 

 

15,381

 

Change in fair value of financial liabilities

(104,092)

 

3,836

 

(103,805)

 

3,836

Acquisition-related expenses

18,540

 

 

20,855

 

Listing expense

178,804

 

 

178,804

 

Non-IFRS net loss

$              (16,781)

 

$              (16,727)

 

$              (31,534)

 

$              (35,979)

               
 

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Net loss

$            (121,052)

 

$              (20,563)

 

$            (142,769)

 

$              (39,815)

Interest expense, net

2,439

 

2,120

 

5,289

 

4,777

Depreciation and amortization

23,660

 

22,751

 

49,081

 

45,378

EBITDA

(94,953)

 

4,308

 

(88,399)

 

10,340

Share-based compensation expense

11,019

 

 

15,381

 

Change in fair value of financial liabilities

(104,092)

 

3,836

 

(103,805)

 

3,836

Acquisition-related expenses

18,540

 

 

20,855

 

Listing expense

178,804

 

 

178,804

 

Adjusted EBITDA

$                 9,318

 

$                 8,144

 

$               22,836

 

$               14,176

                       
 

Share-based compensation expense by function

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Cost of revenues

$                 1,389

 

$                      —

 

$                 1,918

 

$                      —

Selling and marketing

1,892

 

 

2,660

 

General and administrative

3,678

 

 

5,149

 

Research and development

4,060

 

 

5,654

 

Total

$               11,019

 

$                      —

 

$               15,381

 

$                      —

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