Exro Technologies Reports First Quarter 2025 Results
CALGARY, AB, May 15, 2025 /CNW/ - Exro Technologies Inc. (TSX: EXRO) ("Exro" or the "Company"), a leading technology company specializing in power control solutions for electric vehicles and energy storage, today announced its financial results for the first quarter ended March 31, 2025.
Q1 2025 Highlights
Revenue of $4.4 million from delivery of 23 electric propulsion units and aftersales services.
Continued integration of Coil Driver™ technology with a third commercial EV platform.
Strategic engagements advanced with Stellantis and two additional global automotive OEMs.
Workforce reduced by 19% and cost optimization initiatives began to deliver gross margin improvements.
"During the first quarter, Exro made meaningful progress executing against its commercialization roadmap," said Exro CEO Sue Ozdemir. "We continued propulsion system deliveries to our commercial vehicle OEM customers, advanced new OEM programs, and began realizing the benefits of targeted cost reductions and margin improvements. With the electrification market continuing to evolve, we remain focused on disciplined execution, strategic capital deployment, and delivering long-term value."
Financial Results
Revenue for Q1 2025 totaled $4.44 million, compared to $87,828 in Q1 2024. This increase reflects the Company's transition from technology validation to commercial deliveries.
Gross profit, excluding amortization, was negative $2.3 million, an improvement from prior quarters, driven by early cost reductions, inventory efficiencies, and product mix optimization. Gross margin per unit improved significantly compared to Q4 2024, continuing the trend toward profitability.
Net loss from continuing operations was $23.5 million (or $0.04 per share), compared to a loss of $12.9 million (or $0.08 per share) in Q1 2024. The increase in loss is primarily attributable to non-cash charges, including $7.4 million in depreciation and amortization and $3.8 million in interest expense related to senior secured debt and convertible notes.
As of March 31, 2025, the Company held $0.76 million in cash and reported a working capital deficit of $7.0 million. Operating cash flow was negative $11.5 million, reflecting the scaling of commercial operations.
Strategic and Operational Update
Exro is delivering propulsion units to two of the top five commercial vehicle OEMs in North America and remains in advanced discussions with two others.
The Company is pursuing an additional OEM contract for 2026 production.
An additional 20% reduction in bill-of-materials costs is targeted by year-end.
Additional Cell Driver™ pilot deployments are scheduled across North America.
Following quarter-end, Exro is continuing to explore viable funding opportunities to support its business plan. The Company received US $4.0 million ($5,615,510) in additional funding from its existing senior secured creditor.
Strategic Wind-Down of APAC Subsidiary
As part of its focus on core markets and capital efficiency, Exro has initiated an orderly wind-down of its Australia-based subsidiary. Legal counsel has been retained, and the Company is working to resolve all lease, employment, and regulatory matters. This strategic decision supports the Company's ongoing focus on cost reductions and reallocation of resources to high-impact markets with stronger commercial traction and more efficient capital deployment.
Outlook
While macroeconomic conditions continue to affect the broader automotive sector, Exro remains confident in the long-term demand for cost-efficient electrification solutions.
ABOUT EXRO TECHNOLOGIES INC.
Exro Technologies Inc., now expanded through the strategic acquisition of SEA Electric, is a leading technology company that has developed new-generation power control electronics. Its innovative suite of solutions, including Coil Driver™, Cell Driver™, and SEA-Drive ®, expand the capabilities of electric motors and batteries and offer OEMs a comprehensive e-propulsion solution with unmatched performance and efficiency. Exro is reshaping global energy consumption, accelerating adoption towards a circular electrified economy by delivering more with less – minimum energy for maximum results.
For more information visit our website at www.exro.com.
To view our Corporate Presentation visit us at www.exro.com/investors
Visit us on social media @exrotech.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified using terminology such as "plans", "expects", "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved". Forward looking statements involve risks, uncertainties and other factors disclosed under the heading "Risk Factors" and elsewhere in the Company's filings with Canadian securities regulators, that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although the Company believes that the assumptions and factors used in preparing these forward-looking statements are reasonable based upon the information currently available to management as of the date hereof, actual results and developments may differ materially from those contemplated by these statements. Readers are therefore cautioned not to place undue reliance on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by the Company with the Canadian securities regulators, including the Company's annual information form for the financial year ended December 31, 2024, and financial statements and related MD&A for the financial year ended December 31, 2024, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.ca. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties, and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated, or intended. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
Neither the Toronto Stock Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this press release.
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However, despite these advantages, Sumitomo Realty trades at just half of the post-tax market value of its real estate ("PNAV"), 1 making it the most undervalued real estate developer in Japan. Sumitomo Realty also trades at a depressed multiple of earnings, despite its stable, high-quality core office leasing business. Sumitomo Realty's persistent stock underperformance and valuation discount are not coincidental. The Company is an outlier in several areas: it holds a large portfolio of cross shareholdings, it has a unique policy of not selling property assets or managing REIT assets, and its board and governance structure rank near the bottom of all TOPIX 100 companies on several metrics 2. In our view, these self-imposed problems and others we highlight below are responsible for the Company's significant undervaluation. We see a clear opportunity for Sumitomo Realty to close its discount to fair value by taking steps to resolve these issues. 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See Chart 4 – ROE. Poor corporate governance and board structure: Sumitomo Realty ranks near the bottom of the TOPIX 100 on corporate-governance metrics. A global company with the size and stature of Sumitomo Realty should aspire to market-leading governance standards. While the Company has recently outlined plans to gradually improve its governance, progress on these reforms can and should be accelerated. See Chart 5 – Corporate Governance Comparison. Setting the Right Course These issues are largely self-imposed and can be addressed quickly and decisively by management. 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The time to implement a more ambitious policy to unwind cross shareholdings is now. Several large holders of Sumitomo Realty shares – including Taisei Corp, Obayashi, Shimizu and Kajima, which collectively own more than ¥160 billion worth – have announced plans to aggressively sell their cross shareholdings. Sumitomo Realty reciprocally owns more than ¥60 billion worth of shares in these four construction companies. This dynamic presents a compelling opportunity for Sumitomo Realty: It can unlock significant capital by selling shares in these four firms and use the proceeds to repurchase a portion of the Sumitomo Realty shares they currently hold. Such a transaction would reduce cross shareholdings and deploy capital back into the Company's own shares at extremely attractive levels. While cross shareholdings have historically been seen as promoting business relationships across Japanese companies, they are now viewed as a poor use of capital and an enabler of corporate leadership entrenchment. Sumitomo Realty and its key cross shareholders are meant to adhere to the Corporate Governance Code, which requires Japanese companies to scrutinize the purpose and benefits of cross shareholdings, particularly those held for business relationships, which are increasingly viewed as inappropriate. We believe the Company should act decisively and expeditiously to unwind its cross-shareholdings portfolio. See Chart 6 – Key Corporate Cross Shareholding. The steps we have outlined would not only raise management's standing at the 2025 AGM, but also improve Sumitomo Realty's valuation. In the Japanese real estate developer sector, there is a clear relationship between valuation (PNAV), capital efficiency (ROE) and shareholder returns. We are confident that taking the steps above – particularly on improving shareholder payout and capital efficiency – will unlock significant value for Sumitomo Realty shareholders and increase management's credibility with shareholders ahead of the 2025 AGM. See Chart 7 – ROE and Shareholder Returns Explain Valuation. Companies that have proactively embraced Japan's ongoing corporate reforms – by unwinding cross shareholdings, improving capital efficiency, increasing shareholder returns and strengthening governance – have been rewarded with higher valuations and greater shareholder support. Examples from the general construction, non-life insurance, and real estate developer sectors show how such reforms can successfully unlock value and transform investor perception at previously underperforming companies. Conclusion We appreciate that in recent months, Sumitomo Realty management has taken several initial steps in the right direction – some of which are aligned with our recommendations. However, progress has been insufficient and too slow. The market reacted negatively to the uninspiring MTMP released in late March, which failed to address core issues. Many of our suggestions remain ignored. The 2025 AGM is a critical opportunity for shareholders to express their satisfaction or dissatisfaction with Sumitomo Realty's current strategy. Management's approval rating is the clearest and most effective way for shareholders to catalyse change. Despite the modest shareholder-friendly actions taken to date, there remains deep skepticism, including from Elliott, about management's genuine commitment to ambitiously and decisively address the Company's key issues. As such, absent further value- and governance-enhancing measures from Sumitomo Realty, Elliott plans to vote against the reappointment of senior management at the 2025 AGM. We urge all shareholders to carefully consider their voting decisions and engage with Sumitomo Realty management in the lead up to the AGM. Your vote can shape the Company's future. We are hopeful management will be attentive to shareholder viewpoints and will take decisive steps to raise Sumitomo Realty's corporate value and enhance its governance. Sincerely, Aaron Tai Portfolio Manager Elliott Investment Management, L.P. About Elliott Elliott Investment Management L.P. (together with its affiliates, "Elliott") manages approximately $72.7 billion in assets as of December 31, 2024. Founded in 1977, it is one of the oldest funds under continuous management. 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ELLIOTT MANAGEMENT RECOGNISES THAT THERE MAY BE CONFIDENTIAL OR OTHERWISE NON-PUBLIC INFORMATION WITH RESPECT TO THE COMPANY THAT COULD ALTER THE OPINIONS OF ELLIOTT MANAGEMENT WERE SUCH INFORMATION KNOWN. THIS DOCUMENT REFERS TO THE 92ND ORDINARY GENERAL MEETING OF SHAREHOLDERS OF THE COMPANY (THE "AGM"). NOTHING IN THIS DOCUMENT SEEKS ANY FORM OF AGREEMENT OR UNDERSTANDING FROM ANY RECIPIENT OF THIS DOCUMENT ABOUT VOTING IN RELATION TO ANY MATTER AT THE AGM OR THE EXERCISING OF SHAREHOLDERS' RIGHTS. YOU SHALL RETAIN AND EXERCISE DISCRETION TO VOTE IN ANY MANNER OR NOT TO VOTE AS DETERMINED BY YOU IN YOUR SOLE DISCRETION. THIS DOCUMENT IS NOT FOR OUR SOLICITATION OF YOUR PROXY IN CONNECTION WITH ANY MATTER AT THE AGM. NO REPRESENTATION, WARRANTY OR UNDERTAKING, EXPRESS OR IMPLIED, IS GIVEN AND NO RESPONSIBILITY OR LIABILITY OR DUTY OF CARE IS OR WILL BE ACCEPTED BY ELLIOTT MANAGEMENT OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, OR ADVISORS (EACH AN "ELLIOTT PERSON") CONCERNING: (I) THIS DOCUMENT AND ITS CONTENTS, INCLUDING WHETHER THE INFORMATION AND OPINIONS CONTAINED HEREIN ARE ACCURATE, FAIR, COMPLETE OR CURRENT; (II) THE PROVISION OF ANY FURTHER INFORMATION, WHETHER BY WAY OF UPDATE TO THE INFORMATION AND OPINIONS CONTAINED IN THIS DOCUMENT OR OTHERWISE TO THE RECIPIENT AFTER THE DATE OF THIS DOCUMENT; OR (III) THAT ELLIOTT MANAGEMENT'S INVESTMENT PROCESSES OR INVESTMENT OBJECTIVES WILL OR ARE LIKELY TO BE ACHIEVED OR SUCCESSFUL OR THAT ELLIOTT MANAGEMENT'S INVESTMENTS WILL MAKE ANY PROFIT OR WILL NOT SUSTAIN LOSSES. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. TO THE FULLEST EXTENT PERMITTED BY LAW, NONE OF THE ELLIOTT PERSONS WILL BE RESPONSIBLE FOR ANY LOSSES, WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL, INCLUDING LOSS OF PROFITS, DAMAGES, COSTS, CLAIMS OR EXPENSES RELATING TO OR ARISING FROM THE RECIPIENT'S OR ANY PERSON'S RELIANCE ON THIS DOCUMENT. EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE INFORMATION AND OPINIONS INCLUDED IN THIS DOCUMENT CONSTITUTE FORWARD-LOOKING STATEMENTS, INCLUDING ESTIMATES AND PROJECTIONS PREPARED WITH RESPECT TO, AMONG OTHER THINGS, THE COMPANY'S ANTICIPATED OPERATING PERFORMANCE, THE VALUE OF THE COMPANY'S SECURITIES, DEBT OR ANY RELATED FINANCIAL INSTRUMENTS THAT ARE BASED UPON OR RELATE TO THE VALUE OF SECURITIES OF THE COMPANY (COLLECTIVELY, "COMPANY SECURITIES"), GENERAL ECONOMIC AND MARKET CONDITIONS AND OTHER FUTURE EVENTS. YOU SHOULD BE AWARE THAT ALL FORWARD-LOOKING STATEMENTS, ESTIMATES AND PROJECTIONS ARE INHERENTLY UNCERTAIN AND SUBJECT TO SIGNIFICANT ECONOMIC, COMPETITIVE, AND OTHER UNCERTAINTIES AND CONTINGENCIES AND HAVE BEEN INCLUDED SOLELY FOR ILLUSTRATIVE PURPOSES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE INFORMATION CONTAINED HEREIN DUE TO REASONS THAT MAY OR MAY NOT BE FORESEEABLE. THERE CAN BE NO ASSURANCE THAT THE COMPANY SECURITIES WILL TRADE AT THE PRICES THAT MAY BE IMPLIED HEREIN, AND THERE CAN BE NO ASSURANCE THAT ANY ESTIMATE, PROJECTION OR ASSUMPTION HEREIN IS, OR WILL BE PROVEN, CORRECT. THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE (A) AN OFFER OR INVITATION TO BUY OR SELL, OR A SOLICITATION OF AN OFFER TO BUY OR SELL OR TO OTHERWISE ENGAGE IN ANY INVESTMENT BUSINESS OR PROVIDE OR RECEIVE ANY INVESTMENT SERVICES IN RESPECT OF, ANY SECURITY OR OTHER FINANCIAL INSTRUMENT AND NO LEGAL RELATIONS SHALL BE CREATED BY ITS ISSUE, (B) A "FINANCIAL PROMOTION" FOR THE PURPOSES OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 OF THE U.K. (AS AMENDED), (C) "INVESTMENT ADVICE" AS DEFINED BY THE FCA'S HANDBOOK OF RULES AND GUIDANCE ("FCA HANDBOOK"), (D) "INVESTMENT RESEARCH" AS DEFINED BY THE FCA HANDBOOK, (E) AN "INVESTMENT RECOMMENDATION" AS DEFINED BY REGULATION (EU) 596/2014 AND BY REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF U.K. DOMESTIC LAW BY VIRTUE OF SECTION 3 OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("EUWA 2018") INCLUDING AS AMENDED BY REGULATIONS ISSUED UNDER SECTION 8 OF EUWA 2018, (F) ANY ACTION CONSTITUTING "INVESTMENT ADVISORY BUSINESS" AS DEFINED IN ARTICLE 28, PARAGRAPH 3, ITEM 1 OF THE FINANCIAL INSTRUMENTS AND EXCHANGE LAW OF JAPAN (THE "FIEL"), (G) ANY ACTION CONSTITUTING "INVESTMENT MANAGEMENT BUSINESS" AS DEFINED IN ARTICLE 28, PARAGRAPH 4 OF THE FIEL, OR (H) FINANCIAL PROMOTION, INVESTMENT ADVICE OR AN INDUCEMENT OR ENCOURAGEMENT TO PARTICIPATE IN ANY PRODUCT, OFFERING OR INVESTMENT. NO INFORMATION CONTAINED HEREIN SHOULD BE CONSTRUED AS A RECOMMENDATION BY ELLIOTT MANAGEMENT. THIS DOCUMENT IS NOT INTENDED TO FORM THE BASIS OF ANY INVESTMENT DECISION OR AS SUGGESTING AN INVESTMENT STRATEGY. THIS DOCUMENT IS NOT (AND MAY NOT BE CONSTRUED TO BE) LEGAL, TAX, INVESTMENT, FINANCIAL OR OTHER ADVICE. EACH RECIPIENT SHOULD CONSULT THEIR OWN LEGAL COUNSEL AND TAX AND FINANCIAL ADVISERS AS TO LEGAL AND OTHER MATTERS CONCERNING THE INFORMATION CONTAINED HEREIN. THIS DOCUMENT DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL OF THE INFORMATION THAT MAY BE RELEVANT TO AN EVALUATION OF THE COMPANY, COMPANY SECURITIES OR THE MATTERS DESCRIBED HEREIN. NO AGREEMENT, COMMITMENT, UNDERSTANDING OR OTHER LEGAL RELATIONSHIP EXISTS OR MAY BE DEEMED TO EXIST BETWEEN OR AMONG ELLIOTT MANAGEMENT AND ANY OTHER PERSON BY VIRTUE OF FURNISHING THIS DOCUMENT. ELLIOTT MANAGEMENT IS NOT ACTING FOR OR ON BEHALF OF, AND IS NOT PROVIDING ANY ADVICE OR SERVICE TO, ANY RECIPIENT OF THIS DOCUMENT. ELLIOTT MANAGEMENT IS NOT RESPONSIBLE TO ANY PERSON FOR PROVIDING ADVICE IN RELATION TO THE SUBJECT MATTER OF THIS DOCUMENT. BEFORE DETERMINING ON ANY COURSE OF ACTION, ANY RECIPIENT SHOULD CONSIDER ANY ASSOCIATED RISKS AND CONSEQUENCES AND CONSULT WITH ITS OWN INDEPENDENT ADVISORS AS IT DEEMS NECESSARY. THE ELLIOTT FUNDS MAY HAVE A DIRECT OR INDIRECT INVESTMENT IN THE COMPANY. ELLIOTT MANAGEMENT THEREFORE HAS A FINANCIAL INTEREST IN THE PROFITABILITY OF THE ELLIOTT FUNDS' POSITIONS IN THE COMPANY. ACCORDINGLY, ELLIOTT MANAGEMENT MAY HAVE CONFLICTS OF INTEREST AND THIS DOCUMENT SHOULD NOT BE REGARDED AS IMPARTIAL. NOTHING IN THIS DOCUMENT SHOULD BE TAKEN AS ANY INDICATION OF ELLIOTT MANAGEMENT'S CURRENT OR FUTURE TRADING OR VOTING INTENTIONS WHICH MAY CHANGE AT ANY TIME. ELLIOTT MANAGEMENT RESERVES THE RIGHT TO CHANGE ITS VOTING INTENTION AT ANY TIME NOTWITHSTANDING ANY STATEMENTS IN THIS DOCUMENT. ELLIOTT MANAGEMENT INTENDS TO REVIEW ITS INVESTMENTS IN THE COMPANY ON A CONTINUING BASIS AND DEPENDING UPON VARIOUS FACTORS, INCLUDING WITHOUT LIMITATION, THE COMPANY'S FINANCIAL POSITION AND STRATEGIC DIRECTION, THE OUTCOME OF ANY DISCUSSIONS WITH THE COMPANY, OVERALL MARKET CONDITIONS, OTHER INVESTMENT OPPORTUNITIES AVAILABLE TO ELLIOTT MANAGEMENT, AND THE AVAILABILITY OF COMPANY SECURITIES AT PRICES THAT WOULD MAKE THE PURCHASE OR SALE OF COMPANY SECURITIES DESIRABLE, ELLIOTT MANAGEMENT MAY FROM TIME TO TIME (IN THE OPEN MARKET OR IN PRIVATE TRANSACTIONS, INCLUDING SINCE THE INCEPTION OF ELLIOTT MANAGEMENT'S POSITION) BUY, SELL, COVER, HEDGE OR OTHERWISE CHANGE THE FORM OR SUBSTANCE OF ANY OF ITS INVESTMENTS (INCLUDING COMPANY SECURITIES) TO ANY DEGREE IN ANY MANNER PERMITTED BY LAW AND EXPRESSLY DISCLAIMS ANY OBLIGATION TO NOTIFY OTHERS OF ANY SUCH CHANGES. ELLIOTT MANAGEMENT ALSO RESERVES THE RIGHT TO TAKE ANY ACTIONS WITH RESPECT TO ITS INVESTMENTS IN THE COMPANY AS IT MAY DEEM APPROPRIATE. ELLIOTT MANAGEMENT HAS NOT SOUGHT OR OBTAINED CONSENT FROM ANY THIRD PARTY TO USE ANY STATEMENTS OR INFORMATION CONTAINED HEREIN. ANY SUCH STATEMENTS OR INFORMATION SHOULD NOT BE VIEWED AS INDICATING THE SUPPORT OF SUCH THIRD PARTY FOR THE VIEWS EXPRESSED HEREIN. ALL TRADEMARKS AND TRADE NAMES USED HEREIN ARE THE EXCLUSIVE PROPERTY OF THEIR RESPECTIVE OWNERS. 1 Defined by dividing share price by book value per share adjusted for the post-tax difference between market value of leasing properties and the book value of leasing properties as disclosed in Sumitomo Realty's yuho. 2 Sumitomo Realty ranks at the bottom of the TOPIX 100 on its ISS Governance Score, director independence ratio and its usage of independent board committees (e.g. nomination, remuneration and audit committees).
