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Nio Generates First Positive Cash Flow From Operations In 'Milestone' Q2

Shanthi Rexaline

Nio Inc – ADR (NYSE: NIO) shares were rising above the $15 mark Tuesday for the first time in about a month following the release of the Chinese electric vehicle manufacturer's second-quarter report. 

Nio's Q2 Headline Numbers: Nio reported a second-quarter loss per ADS, excluding items, of 1.08 yuan (15 cents) on revenue of 3.72 billion yuan ($526.4 million).

The results exceeded consensus estimates that called for a wider loss of 26 cents per share on revenue of $504 million.

In the year-ago period, the loss per ADS was 44 cents and revenue totaled $215.56 million.

Along with more deliveries, Nio's operating metrics were boosted by increasing scale, higher average revenue per vehicle, reduced material costs and improved manufacturing efficiency, CFO Wei Feng said in a statement.

Nio's Q2 Deliveries, Margins: In the second quarter, the EV maker delivered a record 10,331 vehicles, including 8,068 ES6s and 2,263 ES8S.

This was notably higher than the 3,553 vehicles delivered in the year-ago quarter and the 3,838 vehicles delivered during the first quarter of 2020, which was affected by the COVID-19 pandemic. 

Vehicle sales rose 146.5% year-over-year and 177.6% quarter-over-quarter to $493.4 million, and vehicle margins turned to positive 9.7% versus negative 24.1% in the year-ago quarter and negative 7.4% in the first quarter of 2020.

"Beyond the strong order growth, we are proud to reach a milestone quarter with respect to the key financial metrics of the company, highlighted with the historically high vehicle gross margin of 9.7%, lowest-ever operating losses and more importantly, a positive cash flow from operations for the first time in our history," Nio CEO William Li said in a statement. 

Nio's Cash Position: At the end of the second quarter, the company had cash, cash-equivalents, restricted cash and short-term investments of $1.6 billion thanks to strategic investments and proceeds from debt offerings.

View more earnings on NIO

Nio's Newest Vehicle: Nio launched its third model, the EC6 — a five-seater premium smart electric coupe SUV — on July 24. The starting pre-subsidy price of the model is 368,000 yuan.

The company said the EC6 is available to order via the Nio App, and deliveries will start in September.

Nio's Outlook: Nio said it expects to deliver 11,000-11,500 vehicles in the third quarter, representing a 129.2%-139.6% year-over-year increase. The company guided to third-quarter revenue of $572.9 million-$596.2 million.

The revenue guidance was notably above the consensus estimate of $537.15 million.

"The current constraints on the productions will be lifted in the near future and we are confident that our production capacity can meet the accelerated demand of our models," Li said.

NIO Price Action: In premarket trading, Nio shares were advancing 10.34% to $15.68, off the all-time high of $16.44 that Nio shares hit July 13.

The stock has seen a resurgence this year and is up more than 250% year-to-date. 

Related Links:

Nio Analyst Projects Upside On Stronger Orders, Improving Margins, Cash Flow

Chinese EV Manufacturer Nio Races To All-Time High

Photo courtesy of Nio. 

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