EZGO Technologies Ltd (EZGO) Q1 2024 Earnings Report

EZGO Technologies Ltd delivered a weak start to 2024 with Q1 revenue of $4.29 million, reflecting a steep year-over-year decline and a sequential drop from the prior quarter. The company reported a gross margin of 5.69% on revenue of $4.29 million, resulting in a gross profit of roughly $0.244 million. Despite cost discipline on certain line items, operating leverage remained negative, with operating income of about -$1.64 million and net income of -$2.03 million, translating to an EPS of -$0.79. EBITDA was negative at approximately -$1.38 million, underscoring the early-stage nature of ECO (ebicycle) and battery rental initiatives and the current scale constraints.

Cash flow remains under pressure. Operating cash flow was -$5.36 million in the quarter and free cash flow stood at -$7.03 million, driving a negative cash balance at period end of roughly -$8.30 million. The balance sheet shows a solid stockholders’ equity base of about $60.1 million and total assets of $82.6 million, but liquidity is tight given cash and cash equivalents of just $0.66 million and a net debt of roughly $9.76 million. Inventory levels are elevated at $32.14 million, contributing to a low inventory turnover (0.13x) and indicating potential backlog or overhang that will need to unwind to restore working capital efficiency.

Looking ahead, management has not issued formal forward guidance in the QQ1 2024 release. The near-term implication is a continued emphasis on cash preservation, inventory optimization, and progress toward monetizing the battery rental and software-enabled rental services. EZGO operates in a highly competitive, growth-oriented China EV ecosystem with potential upside from scaling the charging network, expanding software offerings, and monetizing battery-related assets, but near-term profitability hinges on improved gross margins, reduced working capital intensity, and access to financing or strategic partnerships to support expansion.