Nio Inc.'s ($NIO) recent financial report for the second quarter of 2023 reveals that the company's loss has significantly narrowed in comparison to the previous year, while its revenue has nearly doubled, showcasing a remarkable upsurge in vehicle deliveries. The adjusted loss per American depositary share was reported at 2.21 renminbi ($0.30), showing an improvement from the 3.28 renminbi loss reported in the same quarter last year.
Analysts surveyed by Capital IQ had anticipated a normalized loss of 2.20 renminbi per share, indicating that Nio's performance aligned closely with market expectations. In terms of revenue, Nio experienced a staggering 99% year-over-year increase, reaching 17.45 billion renminbi. Six analysts had forecasted a slightly lower revenue estimate of 17.38 billion renminbi, therefore, the company's actual performance surpassed expectations.
This boost in revenue was primarily attributed to a notable 118% surge in vehicle sales, amounting to 15.68 billion renminbi. This surge was attributed to increased delivery volumes, although it was partially tempered by a shift in product mix and adjustments related to 'user rights' that were implemented starting in June 2023.
In total, Nio delivered 57,373 vehicles during the quarter, a significant rise from the 23,520 units delivered in the same timeframe the previous year. Furthermore, Nio's shares, listed on the New York Stock Exchange, experienced a notable uptick of 6% during trading on Thursday, suggesting strong market confidence in the company’s performance. From a gross margin perspective, the company reported a marked improvement, standing at 9.7% compared to just 1% in the previous year.
The vehicle gross margin saw an increase to 12.2% from 6.2% in the last fiscal year, largely due to the ongoing cost optimization strategies employed by the electric vehicle manufacturer. Chief Financial Officer Stanley Yu Qu noted that these improvements were essential for the company's sustained performance.
However, it is worth mentioning that operating expenses witnessed an increase, rising to 6.9 billion renminbi from 6.16 billion renminbi in the previous year’s quarter. In a statement, Yu Qu emphasized the company's commitment to efficient research and development, alongside infrastructure investments that would harness the growing potential in the mass market.
He also spoke on the importance of adopting flexible market strategies while continuously optimizing Nio's product portfolio. "We are confident that these efforts will result in steady improvements in gross profit and cost efficiency in the future," he asserted. Looking ahead, Nio has set its revenue expectations for the upcoming three-month period between 19.11 billion renminbi and 19.67 billion renminbi, which would reflect a modest annual growth rate of 0.2% to 3.2%.
Six analysts had predicted revenue to be around 18.52 billion renminbi. The company also anticipates vehicle deliveries in the range of 61,000 to 63,000 units for the quarter, having already delivered 20,498 and 20,176 units in July and August, respectively. Chief Executive William Bin Li expressed optimism regarding future performance, stating, "The total delivery volume for the third quarter is expected to set another record, further solidifying and expanding market share," indicating strong growth strategies in place for Nio as it aims to enhance its footprint in the automotive sector.
As of the latest reports, Nio’s share price stands at 4.48, reflecting a change of +0.24 and a percent change of +5.71..