NIO Inc. (NYSE: NIO) reported Q1 EPS of ($0.22), $0.04 better than the analyst estimate of ($0.26). Revenue for the quarter came in at $193.8 million versus the consensus estimate of $234.1 million.

Financial Highlights for the First Quarter of 2020

• Vehicle sales were RMB1,255.6 million (US$177.3 million) in the first quarter of 2020, representing a decrease of 53.2% from the fourth quarter of 2019 and a decrease of 18.2% from the same quarter of 2019.
• Vehicle marginii was negative 7.4%, compared with negative 6.0% in the fourth quarter of 2019 and negative 7.2% in the same quarter of 2019.
• Total revenues were RMB1,372.0 million (US$193.8 million) in the first quarter of 2020, representing a decrease of 51.8% from the fourth quarter of 2019 and a decrease of 15.9% from the same quarter of 2019.
• Gross margin was negative 12.2%, compared with negative 8.9% in the fourth quarter of 2019 and negative 13.4% in the same quarter of 2019.
• Loss from operations was RMB1,570.3 million (US$221.8 million) in the first quarter of 2020, representing a decrease of 44.4% from the fourth quarter of 2019 and a decrease of 40.0% from the same quarter of 2019. Excluding share-based compensation expenses, adjusted loss from operations (non-GAAP) was RMB1,537.9 million (US$217.2 million) in the first quarter of 2020, representing a decrease of 44.6% from the fourth quarter of 2019 and a decrease of 38.4 % from the same quarter of 2019.
• Net loss was RMB1,691.8 million (US$238.9 million) in the first quarter of 2020, representing a decrease of 40.9% from the fourth quarter of 2019 and a decrease of 35.5% from the same quarter of 2019. Excluding share-based compensation expenses, adjusted net loss (non-GAAP) was RMB1,659.4 million (US$234.4 million) in the first quarter of 2020, representing a decrease of 41.0% from the fourth quarter of 2019 and a decrease of 33.7% from the same quarter of 2019.
• Net loss attributable to NIO’s ordinary shareholders was RMB1,722.8 million (US$243.3 million) in the first quarter of 2020, representing a decrease of 40.5% from the fourth quarter of 2019 and a decrease of 35.0% from the same quarter of 2019. Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, adjusted net loss attributable to NIO’s ordinary shareholders (non-GAAP) was RMB1,658.9 million (US$234.3 million).
• Basic and diluted net loss per American Depositary Share (ADS)iii were both RMB1.66 (US$0.23) in the first quarter of 2020. Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, adjusted basic and diluted net loss per ADS (non-GAAP) were both RMB1.60 (US$0.22).
• Cash and cash equivalents, restricted cash and short-term investment were RMB2,397.4 million (US$338.6 million) as of March 31, 2020.

CEO and CFO Comments

“We delivered a total of 3,838 ES8 and ES6 vehicles in the first quarter of 2020, representing a 3.8% year on year decrease, due to the impact of the COVID-19 outbreak in China in the first quarter,” said William Bin Li, founder, chairman and chief executive officer of NIO. “In April 2020, we delivered 3,155 vehicles, a robust increase of 105.8% month over month. Meanwhile, we have witnessed the order growth to have rebounded to the level prior to the COVID-19 outbreak since late April. Our strong recovery and growth were attributable to the competitiveness of our products and services, the continuous support from our user community, and the effective expansion of our sales network. We expect to deliver 9,500 to 10,000 vehicles in the second quarter, a record of quarterly deliveries since our first deliveries.”

“On April 29, 2020, NIO entered into the definitive agreements with the strategic investors for the investment in NIO China. The strategic investment will provide sufficient funds to support NIO’s business development, enhance our leadership in the products and technologies of smart electric vehicles, and offer services exceeding users’ expectations. The establishment of NIO China’s headquarters in Hefei will further improve our operating efficiency in the long run,” concluded Mr. Li.

“We are pleased to achieve the overall operational efficiency and cash management improvement in the first quarter of 2020,” added Wei Feng, NIO’s chief financial officer. “Our operating loss significantly decreased by approximately 44.4% quarter over quarter. While these results are partially attributable to our enhanced cost control measures taken during the COVID-19 outbreak, the improved operational efficiency reflects the initial returns of our continuous efforts in the operation optimization and expense control during the past quarters. We believe these efforts will drive positive trend of our performance in the rest of 2020 and beyond.”

GUIDANCE:

NIO Inc. sees Q2 2020 revenue of $475.7-499.1 million, versus the consensus of $350.9 million.

For the second quarter of 2020, the Company expects:

• Deliveries of the vehicles to be between 9,500 and 10,000 vehicles, representing an increase of approximately 147.5% to 160.6% from the first quarter of 2020, and an increase of approximately 167.4% to 181.5% from the second quarter of 2019.
• Total revenues to be between RMB3,368.4 million (US$475.7 million) and RMB3,534.2 million (US$499.1 million), representing an increase of approximately 145.5% to 157.6% from the first quarter of 2020, and an increase of approximately 123.3% to 134.3% from the second quarter of 2019.

This business outlook reflects the Company’s current and preliminary view on the business situation and market condition, which is subject to change.

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