REE Automotive .(REE) - 2024 Q4 - Annual Report

Earnings Release Overview The CEO highlighted 2024 as a breakthrough year for SDV technology, announcing a temporary production pause and a strategic shift towards licensing due to macroeconomic challenges and new equity capital raised CEO Commentary and Strategic Update CEO Daniel Barel highlighted 2024 as a breakthrough year for SDV technology, announcing a temporary production pause and a strategic shift towards licensing due to macroeconomic challenges - 2024 was a breakthrough year, successfully advancing the company's software-defined vehicle (SDV) technology from concept to commercial reality, with growing interest from OEMs and technology companies[2] - Due to the disruptive impact of U.S. tariffs and trade policy, the company temporarily paused production to mitigate risks[3] - The company is actively pursuing less capital-intensive strategies, including licensing and partnerships, to preserve cash, with the production pause considered temporary[4] - To strengthen its financial position, the company raised new equity capital in March 2025[3] Financial and Operational Highlights REE reported a GAAP net loss of $111.8 million for FY2024, with a significant non-GAAP improvement, but management expressed substantial doubt about its going concern ability Q4 and Full-Year 2024 Financial Results For FY2024, REE reported a GAAP net loss of $111.8 million and a non-GAAP net loss of $70.3 million, with management expressing substantial doubt about its going concern ability - Management determined substantial doubt about the company's ability to continue as a going concern for the next twelve months due to macroeconomic and tariff impacts[6] Key Financial Metrics (Full Year 2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | GAAP Net Loss | $111.8 million | $114.2 million | | Non-GAAP Net Loss | $70.3 million | $98.3 million | | Cash & Cash Equivalents (Year-End) | $72.3 million | $85.6 million | | Free Cash Flow (FCF) Burn | Decreased 18% YoY | - | Key Financial Metrics (Q4 2024) | Metric | Q4 2024 | Q3 2024 | Q4 2023 | | :--- | :--- | :--- | :--- | | GAAP Net Loss | $37.3 million | $38.5 million | $35.2 million | | Non-GAAP Net Loss | $19.8 million | $16.8 million | $32.2 million | - The company successfully raised approximately $60 million (gross) in 2024 and an additional $36.5 million (gross) in Q1 2025[8] Financial Statements The financial statements show a reduced operating loss for 2024, a decrease in total assets, a significant increase in liabilities, and improved cash flow from operations, alongside successful capital raises Condensed Consolidated Statements of Comprehensive Loss For FY2024, revenues decreased to $183 thousand, while operating loss improved to $79.1 million, resulting in a GAAP net loss of $111.8 million Annual Statement of Comprehensive Loss (in thousands USD) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Revenues | $183 | $1,608 | | Gross Loss | $(3,498) | $(1,662) | | Total Operating Expenses | $75,631 | $118,230 | | Operating Loss | $(79,129) | $(119,892) | | Net Loss | $(111,754) | $(114,208) | | Basic and Diluted Net Loss per Share | $(7.01) | $(11.32) | Condensed Consolidated Balance Sheets As of December 31, 2024, total assets were $130.3 million, total liabilities increased to $107.2 million, and shareholders' equity decreased to $23.1 million Balance Sheet Summary (in thousands USD) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $72,262 | $41,232 | | Total Current Assets | $82,506 | $93,504 | | Total Assets | $130,280 | $137,900 | | Liabilities & Equity | | | | Total Current Liabilities | $36,183 | $35,179 | | Total Liabilities | $107,152 | $59,825 | | Total Shareholders' Equity | $23,128 | $78,075 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $69.0 million in 2024, with financing activities providing $63.5 million, leading to an increase in year-end cash to $74.8 million Annual Cash Flow Summary (in thousands USD) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(68,985) | $(89,273) | | Net cash provided by investing activities | $35,969 | $49,617 | | Net cash provided by financing activities | $63,548 | $23,971 | | Increase (decrease) in cash | $30,532 | $(15,685) | | Cash at end of period | $74,772 | $44,240 | Non-GAAP Financial Measures and Reconciliations The company uses non-GAAP measures like Free Cash Flow and non-GAAP net loss to supplement GAAP reporting, providing detailed reconciliations for transparency and performance analysis Explanation of Non-GAAP Financial Measures The company uses non-GAAP financial measures, including Free Cash Flow and non-GAAP net loss, to supplement GAAP reporting and enhance understanding of operational performance - The company uses non-GAAP financial measures internally to analyze results and as a useful supplement to GAAP for investors[11] - Key non-GAAP measures include Free Cash Flow (FCF) for liquidity and non-GAAP net loss for operational performance[13][14] Reconciliation Tables Detailed reconciliations show a GAAP net loss of $111.8 million adjusted to a non-GAAP net loss of $70.3 million, and net cash used in operating activities reconciled to a Free Cash Flow burn of $76.5 million Reconciliation of Net Loss to Adjusted EBITDA (in thousands USD) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net Loss on a GAAP Basis | $(111,754) | $(114,208) | | Adjustments | $48,977 | $15,664 | | Adjusted EBITDA | $(62,777) | $(98,544) | Reconciliation to Free Cash Flow (in thousands USD) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(68,985) | $(89,273) | | Purchase of property and equipment | $(7,531) | $(3,745) | | Free Cash Flow | $(76,516) | $(93,018) | Reconciliation of GAAP Net Loss to Non-GAAP Net Loss (in thousands USD) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | GAAP net loss | $(111,754) | $(114,208) | | Adjustments | $41,478 | $15,882 | | Non-GAAP net loss | $(70,276) | $(98,326) | Company Information and Disclosures This section provides an overview of REE's software-defined vehicle technology and business model, alongside crucial warnings about forward-looking statements and significant operational risks About REE Automotive REE Automotive specializes in software-defined vehicle (SDV) technology, offering a proprietary full by-wire system that is FMVSS certified and licensed to OEMs - REE develops software-defined vehicle (SDV) technology with zonal architecture for enhanced safety and over-the-air updates[16] - The company is the first to achieve FMVSS certification in the U.S. for a full by-wire vehicle controlling drive, steer, and brake functions electronically[16] - REE's business model focuses on licensing its SDV technology to OEMs and technology companies, enabling custom vehicle design[16] Caution About Forward-Looking Statements This section warns that forward-looking statements are subject to risks, including substantial doubt about going concern, reliance on suppliers, and geopolitical instability - The communication includes forward-looking statements regarding REE's strategy, including temporary production pause, licensing shift, and cash preservation efforts[17] - A primary risk factor is substantial doubt about REE's ability to have sufficient funds for its obligations for the foreseeable future and next 12 months[20] - Other significant risks include reliance on outsourced manufacturing, dependence on limited suppliers, intense competition, and geopolitical risks related to Israeli incorporation and the Gaza war[20]