ZEEKR Reports Third Quarter 2024 Unaudited Financial Results

HANGZHOU, China, Nov. 14, 2024 /PRNewswire/ -- ZEEKR Intelligent Technology Holding Limited ("ZEEKR" or the "Company") (NYSE: ZK), a global premium electric mobility technology company, today announced its unaudited financial results for the third quarter ended September 30, 2024.

Operating Highlights for the Third Quarter of 2024

• Total vehicle deliveries were 55,003 units for the third quarter of 2024, representing a 51% year-over-year increase.

• Vehicle sales were RMB14,401.3 million (US$2,052.2 million)^[1] for the third quarter of 2024, representing an increase of 42.0% from the third quarter of 2023 and an increase of 7.2% from the second quarter of 2024.

• Vehicle margin^[2] was 15.7% for the third quarter of 2024, compared with 18.1% for the third quarter of 2023 and 14.2% for the second quarter of 2024.

• Total revenues were RMB18,358.0 million (US$2,616.0 million) for the third quarter of 2024, representing an increase of 30.7% from the third quarter of 2023 and a decrease of 8.4% from the second quarter of 2024.

• Gross profit was RMB2,941.8 million (US$419.2 million) for the third quarter of 2024, representing an increase of 28.5% from the third quarter of 2023 and a decrease of 14.7% from the second quarter of 2024.

• Gross margin was 16.0% for the third quarter of 2024, compared with 16.3% for the third quarter of 2023 and 17.2% for the second quarter of 2024.

• Loss from operations was RMB1,216.4 million (US$173.3 million) for the third quarter of 2024, representing a decrease of 19.3% from the third quarter of 2023 and a decrease of 29.3% from the second quarter of 2024. Excluding share-based compensation expenses, adjusted loss from operations (non-GAAP)^[3] was RMB1,169.8 million (US$166.7 million) for the third quarter of 2024, representing a decrease of 20.8% from the third quarter of 2023 and an increase of 50.5% from the second quarter of 2024.

• Net loss was RMB1,139.1 million (US$162.3 million) for the third quarter of 2024, representing a decrease of 21.7% from the third quarter of 2023 and a decrease of 37.0% from the second quarter of 2024. Excluding share-based compensation expenses, adjusted net loss (non-GAAP) was RMB1,092.6 million (US$155.7 million) for the third quarter of 2024, representing a decrease of 23.4% from the third quarter of 2023 and an increase of 26.3% from the second quarter of 2024.

(in RMB millions, except for percentages)

Delivery Update

In October 2024, the Company delivered 25,049 vehicles, representing an increase of 92% from October 2023.

New Model Launches

On October 23, 2024, ZEEKR officially launched and commenced deliveries of the ZEEKR MIX, a five-seat, family-oriented vehicle. The ZEEKR MIX redefines the concept of an everyday driver, seamlessly combining ample space, outstanding safety, and agile handling. As the first model built on the Company's SEA-M architecture, the ZEEKR MIX boasts up to 93% in-cabin space utilization, maximizing interior space through innovative packaging and a capsule-style exterior. Two front-row seats that can swivel 270 degrees and a movable central console enhance cabin versatility, enabling "9+N" cabin scenario modes and flexible seating arrangements.

CEO and CFO Comments

"Our performance remained strong and resilient this quarter, marked by record-high deliveries and successful new model launches," said Mr. Andy An, ZEEKR's chief executive officer. "In the third quarter, we set a new record with 55,003 vehicle deliveries, representing a 51% year-over-year increase, and reached an additional milestone in October with monthly deliveries of 25,049 units. Notably, the ZEEKR 7X's deliveries exceeded 20,000 units within 50 days since its launch, marking a robust achievement in the highly competitive mainstream SUV market. As we expand our product lineup and strengthen each model's position in its respective category, we are delivering ZEEKR's ultimate driving experience to more users, further cementing ZEEKR's industry leadership."

Mr. Jing Yuan, ZEEKR's chief financial officer, added, "Our disciplined cost control measures, coupled with ongoing optimization of product structure, economies of scale, and technological innovation, drove a 30.7% year-over-year increase in revenue. Vehicle sales for the quarter grew by 42.0% and 7.2% year-over-year and quarter-over-quarter, respectively. Meanwhile, vehicle margin remained on an upward trajectory, rising to 15.7% in the third quarter of 2024, highlighting our consistent progress in profitability enhancement. Looking ahead, we will continue to consolidate resources, strengthen product capabilities, and expand our industry presence to propel our sustainable growth."

Financial Results for the Third Quarter of 2024

Revenues

• Total revenues were RMB18,358.0 million (US$2,616.0 million) for the third quarter of 2024, representing an increase of 30.7% from RMB14,044.6 million for the third quarter of 2023 and a decrease of 8.4% from RMB20,040.1 million for the second quarter of 2024.

• Revenues from vehicle sales were RMB14,401.3 million (US$2,052.2 million) for the third quarter of 2024, representing an increase of 42.0% from RMB10,143.7 million for the third quarter of 2023, and an increase of 7.2% from RMB13,438.2 million for the second quarter of 2024. The year-over-year increase was due to the increase in new product delivery volume, partially offset by the lower average selling price due to the different product mix and pricing strategy changes between the two quarters. The quarter-over-quarter increase was mainly attributable to the launch of the ZEEKR 7X new model in the third quarter of 2024 and the higher average selling price resulting from changes in product mix.

• Revenues from sales of batteries and other components were RMB3,245.3 million (US$462.5 million) for the third quarter of 2024, representing a decrease of 1.3% from RMB3,288.8 million for the third quarter of 2023 and a decrease of 38.8% from RMB5,299.2 million for the second quarter of 2024. The revenues from sales of batteries and other components remained relatively stable compared with the third quarter of 2023. The quarter-over-quarter decrease was mainly driven by lower sales volume of battery packs in the domestic market.

• Revenues from research and development service and other services were RMB711.4 million (US$101.4 million) for the third quarter of 2024, representing an increase of 16.2% from RMB612.1 million for the third quarter of 2023 and a decrease of 45.4% from RMB1,302.6 million for the second quarter of 2024. The year-over-year increase was mainly due to the increased sales of after-sales vehicle services. The quarter-over-quarter decrease was mainly due to the decreased sales of research and development services to related parties.

• Cost of revenues was RMB15,416.2 million (US$2,196.8 million) for the third quarter of 2024, representing an increase of 31.1% from RMB11,755.2 million for the third quarter of 2023 and a decrease of 7.1% from RMB16,590.2 million for the second quarter of 2024. The year-over-year increase was mainly attributable to the increase in vehicle delivery volume and the quarter-over-quarter decrease was mainly attributable to the decrease in sales of batteries and other components.

• Gross profit was RMB2,941.8 million (US$419.2 million) for the third quarter of 2024, representing an increase of 28.5% from RMB2,289.4 million for the third quarter of 2023 and a decrease of 14.7% from RMB3,449.8 million for the second quarter of 2024.

• Gross margin was 16.0% for the third quarter of 2024, compared with 16.3% for the third quarter of 2023 and 17.2% for the second quarter of 2024. The gross margin remained relatively stable compared with the third quarter of 2023. The quarter-over-quarter decrease was mainly attributable to the decreased margins on batteries and other components.

• Vehicle margin was 15.7% for the third quarter of 2024, compared with 18.1% for the third quarter of 2023 and 14.2% for the second quarter of 2024. The year-over-year decrease was primarily attributed to the lower average selling price of ZEEKR vehicles due to the different product mix and pricing strategy changes between the two quarters, partially offset by the procurement savings as the cost of auto parts and materials decreased. The quarter-over-quarter increase was mainly due to the change in product mix.

• Research and development expenses were RMB1,966.2 million (US$280.2 million) for the third quarter of 2024, representing a decrease of 2.6% from RMB2,018.1 million for the third quarter of 2023 and a decrease of 25.1% from RMB2,623.5 million for the second quarter of 2024. Research and development expenses remained relatively stable compared with the third quarter of 2023. The quarter-over-quarter decrease was mainly due to a one-off, large quantity of share-based compensation expenses in the second quarter, conditioned on the Company's initial public offering.

• Selling, general and administrative expenses were RMB2,274.8 million (US$324.1 million) for the third quarter of 2024, representing an increase of 25.4% from RMB1,813.9 million for the third quarter of 2023 and a decrease of 12.7% from RMB2,604.7 million for the second quarter of 2024. The year-over-year increase was mainly due to increased expenses related to the expansion of offline channels in China and overseas as well as the marketing activities of the launch of new models. The quarter-over-quarter decrease was mainly due to a one-off, large quantity of share-based compensation expenses in the second quarter, conditioned on the Company's initial public offering.

• Loss from operations was RMB1,216.4 million (US$173.3 million) for the third quarter of 2024, representing a decrease of 19.3% from RMB1.507.8 million for the third quarter of 2023 and a decrease of 29.3% from RMB1,721.0 million for the second quarter of 2024.

• Non-GAAP loss from operations, which excludes share-based compensation expenses from loss from operations, was RMB1,169.8 million (US$166.7 million) for the third quarter of 2024, representing a decrease of 20.8% from RMB1,477.6 million for the third quarter of 2023 and an increase of 50.5% from RMB777.1 million for the second quarter of 2024.

• Net loss was RMB1,139.1 million (US$162.3 million) for the third quarter of 2024, representing a decrease of 21.7% from RMB1,455.7 million for the third quarter of 2023 and a decrease of 37.0% from RMB1,808.8 million for the second quarter of 2024.

• Non-GAAP net loss, which excludes share-based compensation expenses from net loss, was RMB1,092.6 million (US$155.7 million) for the third quarter of 2024, representing a decrease of 23.4% from RMB1,425.6 million for the third quarter of 2023 and an increase of 26.3% from RMB864.9 million for the second quarter of 2024.

• Net loss attributable to ordinary shareholders of ZEEKR was RMB1,226.3 million (US$174.7 million) for the third quarter of 2024, representing a decrease of 16.9% from RMB1,476.1 million for the third quarter of 2023 and a decrease of 44.0% from RMB2,190.2 million for the second quarter of 2024.

• Non-GAAP net loss attributable to ordinary shareholders of ZEEKR, which excludes share-based compensation expenses from net loss attributable to ordinary shareholders, was RMB1,179.7 million (US$168.1 million) for the third quarter of 2024, representing a decrease of 18.4% from RMB1,445.9 million for the third quarter of 2023 and a decrease of 5.3% from RMB1,246.3 million for the second quarter of 2024.

• Basic and diluted net loss per share attributed to ordinary shareholders were RMB0.48 (US$0.07) each for the third quarter of 2024, compared with RMB0.74 each for the third quarter of 2023 and RMB0.95 each for the second quarter of 2024.

• Non-GAAP basic and diluted net loss per share attributed to ordinary shareholders were both RMB0.46 (US$0.07) each for the third quarter of 2024, compared with RMB0.72 each for the third quarter of 2023 and RMB0.54 each for the second quarter of 2024.

• Basic and diluted net loss per American Depositary Share ("ADS^[4]") attributed to ordinary shareholders were RMB4.80 (US$0.68) each for the third quarter of 2024, compared with RMB9.51 each for the second quarter of 2024.

• Non-GAAP basic and diluted net loss per ADS attributed to ordinary shareholders were RMB4.62 (US$0.66) each for the third quarter of 2024, compared with RMB5.41 each for the second quarter of 2024.

Cash and cash equivalents and restricted cash was RMB8,297.7 million (US$1,182.4 million) as of September 30, 2024.

Conference Call

The Company's management will host an earnings conference call on Thursday, November 14, 2024, at 7:00 A.M. U.S. Eastern Time (8:00 P.M. Beijing/Hong Kong Time on the same day).

All participants who wish to join the call are requested to complete the online registration using the link provided below. After registration, each participant will receive by email a set of dial-in numbers, a passcode and a unique access PIN to join the conference call. Participants may pre-register at any time, including up to and after the call start time.

Participant Online Registration: https://dpregister.com/sreg/10194063/fdd5d5735e

A live webcast of the conference call will be available on the Company's investor relations website at https://ir.zeekrlife.com/.

About ZEEKR

ZEEKR (NYSE: ZK) is a global premium electric mobility technology brand from Geely Holding Group. ZEEKR aims to create a fully integrated user ecosystem with innovation as a standard. ZEEKR utilizes Sustainable Experience Architecture (SEA) and develops its own battery technologies, battery management systems, electric motor technologies, and electric vehicle supply chains. ZEEKR's value is equality, diversity, and sustainability. Its ambition is to become a true mobility solution provider.

ZEEKR operates its R&D centers and design studios in Ningbo, Hangzhou, Gothenburg, and Shanghai and boasts state-of-the-art facilities and world-class expertise. Since ZEEKR began delivering vehicles in October 2021, the brand has developed a diversified product portfolio that primarily includes the ZEEKR 001, a luxury shooting brake; the ZEEKR 001 FR, a hyper-performing electric shooting brake; the ZEEKR 009, a pure electric luxury MPV; the ZEEKR 009 Grand, a four-seat ultra-luxury flagship MPV; the ZEEKR X, a compact SUV; the ZEEKR 7X, a premium electric five-seater SUV; the ZEEKR MIX; and an upscale sedan model. ZEEKR has announced plans to sell vehicles in global markets, and has an ambitious roll-out plan over the next 5 years to satisfy the rapidly expanding global EV demand.

For more information, please visit https://ir.zeekrlife.com/.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to ordinary shareholders, non-GAAP basic and diluted net loss per ordinary share attributed to ordinary shareholders, non-GAAP basic and diluted net loss per ADS attributed to ordinary shareholders, in evaluating its operating results and for financial and operational decision-making purposes. By excluding the impact of share-based compensation expenses, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company's past performance and future prospects. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making. The non-GAAP financial measures are not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measures have limitations as analytical tools and when assessing the Company's operating performance, investors should not consider them in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company's performance.

For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliations of GAAP and non-GAAP Results" set forth in this announcement.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB7.0176 to US$1.00, the exchange rate on September 30, 2024, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred to could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "future," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this announcement is as of the date of this announcement, and the Company does not undertake any duty to update such information, except as required under applicable law.

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