Workhorse Narrows Q3 Loss to $7.8M Amid Asset Sales, Convertible Note Influx

TL;DR

**Workhorse is still burning cash, but recent asset sales and convertible notes are buying them time, making it a speculative play for traders betting on a turnaround.**

AI Summary

Workhorse Group Inc. reported a net loss of $7.8 million for the three months ended September 30, 2025, a significant improvement from the $25.1 million net loss in the same period of 2024. For the nine months ended September 30, 2025, the net loss was $43.3 million, down from $80.6 million in the prior year. Revenue for the quarter decreased slightly to $2.4 million from $2.5 million year-over-year, but increased for the nine-month period to $8.7 million from $4.7 million. The company's gross loss widened to $7.7 million for the quarter, compared to $4.1 million in Q3 2024, primarily due to higher cost of sales at $10.1 million. Operating expenses decreased to $8.8 million for the quarter from $10.0 million, driven by a reduction in research and development expenses from $2.3 million to $1.1 million. Workhorse's cash and cash equivalents increased substantially to $12.7 million as of September 30, 2025, from $4.1 million at December 31, 2024, and restricted cash also rose to $25.5 million from $0.5 million. The company generated $19.5 million from the sale of assets and secured $33.7 million from convertible notes and $5.0 million from a Motive Convertible Note during the nine-month period, significantly improving its liquidity despite an accumulated deficit of $896.6 million.

Why It Matters

Workhorse's ability to significantly reduce its net loss and boost cash reserves through asset sales and convertible notes is a critical lifeline for investors, signaling a temporary reprieve from severe liquidity concerns. However, the persistent gross loss and declining quarterly revenue highlight ongoing challenges in achieving profitable vehicle production and market penetration against established competitors like Ford and GM, who are also entering the electric commercial vehicle space. For employees and customers, continued financial instability could impact job security and product support. The broader market will watch if these financing activities can truly bridge the gap to sustainable operations or if they merely delay an inevitable reckoning in the highly competitive EV commercial truck sector.

Risk Assessment

Risk Level: high — Workhorse reported recurring losses from operations, an accumulated deficit of $896.6 million, and explicitly stated that "substantial doubt exists regarding our ability to continue as a going concern." While cash and cash equivalents increased to $12.7 million, this was largely due to proceeds from asset sales ($19.5 million) and convertible notes ($38.7 million), rather than profitable operations, indicating a reliance on dilutive financing.

Analyst Insight

Investors should exercise extreme caution and consider Workhorse a highly speculative investment. Monitor the company's progress on bringing new trucks like the W4 CC, W750, and W56 to market and their ability to secure substantial, profitable orders. Evaluate future filings for signs of sustainable revenue growth and a reduction in operating losses, rather than continued reliance on financing activities.

Financial Highlights

debt To Equity

2.64

revenue

$8.7M

operating Margin

N/A

total Assets

$116.7M

total Debt

$84.7M

net Income

-$43.3M

eps

N/A

gross Margin

-225.5%

cash Position

$12.7M

revenue Growth

85.0%

Key Numbers

• $7.8M — Net Loss (Q3 2025) (Reduced from $25.1M in Q3 2024, indicating improved financial performance.)
• $43.3M — Net Loss (YTD Sept 2025) (Significantly lower than $80.6M in YTD Sept 2024, showing progress in loss reduction.)
• $2.4M — Sales (Q3 2025) (Slight decrease from $2.5M in Q3 2024, highlighting ongoing revenue generation challenges.)
• $8.7M — Sales (YTD Sept 2025) (Increased from $4.7M in YTD Sept 2024, showing overall revenue growth for the nine-month period.)
• $10.1M — Cost of Sales (Q3 2025) (Increased from $6.6M in Q3 2024, contributing to a wider gross loss.)
• $7.7M — Gross Loss (Q3 2025) (Wider than $4.1M in Q3 2024, indicating continued unprofitability at the production level.)
• $12.7M — Cash and Cash Equivalents (Increased from $4.1M at Dec 31, 2024, improving short-term liquidity.)
• $25.5M — Restricted Cash (Substantially increased from $0.5M at Dec 31, 2024, boosting overall cash position.)
• $19.5M — Proceeds from Asset Sales (Key source of cash inflow for the nine months ended Sept 30, 2025.)
• $896.6M — Accumulated Deficit (Indicates significant historical losses and ongoing going concern risk.)

Key Players & Entities

• Workhorse Group Inc. (company) — registrant
• $7.8 million (dollar_amount) — net loss for Q3 2025
• $25.1 million (dollar_amount) — net loss for Q3 2024
• $43.3 million (dollar_amount) — net loss for nine months ended Sept 30, 2025
• $80.6 million (dollar_amount) — net loss for nine months ended Sept 30, 2024
• $2.4 million (dollar_amount) — sales for Q3 2025
• $8.7 million (dollar_amount) — sales for nine months ended Sept 30, 2025
• $12.7 million (dollar_amount) — cash and cash equivalents as of Sept 30, 2025
• $25.5 million (dollar_amount) — restricted cash as of Sept 30, 2025
• $896.6 million (dollar_amount) — accumulated deficit as of Sept 30, 2025

FAQ

Risk Factors

• Accumulated Deficit and Going Concern Risk [high — financial]: The company has an accumulated deficit of $896.6 million as of September 30, 2025. This significant historical loss raises concerns about the company's ability to continue as a going concern, despite recent improvements in liquidity.
• Increased Convertible Note Liabilities [medium — financial]: Convertible notes at fair value increased significantly to $27.1 million in current liabilities and $5.1 million in long-term liabilities as of September 30, 2025, up from $10.5 million in current liabilities at December 31, 2024. This indicates increased reliance on debt financing.
• Widening Gross Loss [high — operational]: The gross loss for Q3 2025 widened to $7.7 million from $4.1 million in Q3 2024, driven by a substantial increase in the cost of sales to $10.1 million from $6.6 million. This indicates challenges in achieving profitable production.
• Decreasing Inventory Levels [medium — operational]: Inventory decreased from $41.8 million at December 31, 2024, to $30.0 million as of September 30, 2025. While this can improve cash flow, it may also signal lower production or sales expectations.
• Increased Restricted Cash [medium — financial]: Restricted cash surged to $25.5 million from $0.5 million at December 31, 2024. While this boosts the overall cash position, it implies that a significant portion of the company's cash is not readily available for operational use.

Industry Context

The electric vehicle (EV) manufacturing sector remains highly competitive, with established players and numerous startups vying for market share. Trends include increasing demand for commercial EVs, advancements in battery technology, and evolving regulatory landscapes. Companies like Workhorse face challenges in scaling production, managing supply chains, and achieving profitability amidst significant capital requirements.

Regulatory Implications

Workhorse Group Inc. operates within a heavily regulated industry, particularly concerning vehicle safety and emissions standards. Compliance with these regulations requires ongoing investment and can pose risks if standards change or if the company faces enforcement actions. The company's financial condition may also be scrutinized by regulatory bodies due to its accumulated deficit.

What Investors Should Do

1. Monitor gross margin trends closely.
2. Analyze the use of restricted cash.
3. Evaluate the impact of convertible notes.
4. Assess progress in revenue growth and diversification.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net loss of $7.8 million, improved from $25.1 million in Q3 2024. Revenue was $2.4 million, slightly down from $2.5 million year-over-year.
• 2025-03-17: 2025 Reverse Stock Split — A 1-for-12.5 reverse stock split was effective, impacting share counts and per-share metrics. This is noted in the financial statement adjustments.
• 2024-06-17: 2024 Reverse Stock Split — A 1-for-20 reverse stock split was effective, impacting share counts and per-share metrics. This is noted in the financial statement adjustments.

Glossary

Accumulated deficit

The cumulative net losses of a company since its inception, minus any net gains. It represents a reduction in retained earnings. (Indicates significant historical unprofitability for Workhorse Group Inc., impacting its equity.)

Cost of sales

The direct costs attributable to the production or purchase of the goods sold by a company during a period. (An increase in cost of sales for Workhorse Group Inc. led to a wider gross loss in Q3 2025.)

Gross loss

Occurs when the cost of goods sold exceeds the revenue generated from sales. (Workhorse Group Inc. continues to experience gross losses, indicating that its production costs are higher than its sales revenue.)

Restricted cash

Cash that a company cannot use for general purposes because it is pledged as collateral or set aside for a specific purpose. (A substantial increase in restricted cash for Workhorse Group Inc. suggests funds are earmarked for specific obligations or agreements.)

Convertible notes

Debt instruments that can be converted into a predetermined amount of the issuer's equity at certain times during their life. (Workhorse Group Inc. has significant amounts of convertible notes, which represent a form of debt that could become equity.)

Operating lease right-of-use assets

Assets recognized under accounting standards for leases, representing the right to use an underlying asset for the lease term. (Workhorse Group Inc. has a substantial increase in operating lease right-of-use assets, indicating new or expanded leasing arrangements.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Workhorse Group Inc. has significantly reduced its net loss from $80.6 million to $43.3 million and increased revenue from $4.7 million to $8.7 million. However, the gross loss has widened in both the quarter and year-to-date periods due to higher cost of sales. Cash position has improved substantially, driven by asset sales and financing, but the accumulated deficit remains a significant concern.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value per share WKHS The NASDAQ Cap

Filing Documents

• wkhs-20250930.htm (10-Q) — 1006KB
• richdauchamendmenttoemploy.htm (EX-10.6) — 27KB
• richdauch280gcut-backagree.htm (EX-10.7) — 25KB
• bobginnan-amendmenttoemplo.htm (EX-10.8) — 27KB
• bobginnan-280gcutxbackagre.htm (EX-10.9) — 24KB
• jimharrington-amendmenttoe.htm (EX-10.10) — 27KB
• jimharrington-280gcutxback.htm (EX-10.11) — 24KB
• singlesitelease.htm (EX-10.12) — 250KB
• wkhs-20250930xexx311.htm (EX-31.1) — 8KB
• wkhs-20250930xexx312.htm (EX-31.2) — 8KB
• wkhs-20250930xexx321.htm (EX-32.1) — 4KB
• wkhs-20250930xexx322.htm (EX-32.2) — 4KB
• 0001628280-25-051161.txt ( ) — 7702KB
• wkhs-20250930.xsd (EX-101.SCH) — 60KB
• wkhs-20250930_cal.xml (EX-101.CAL) — 62KB
• wkhs-20250930_def.xml (EX-101.DEF) — 331KB
• wkhs-20250930_lab.xml (EX-101.LAB) — 680KB
• wkhs-20250930_pre.xml (EX-101.PRE) — 550KB
• wkhs-20250930_htm.xml (XML) — 910KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of Stockholders' Equity 3 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 37 Item 4.

Controls and Procedures

Controls and Procedures 37 PART II OTHER INFORMATION 39 Item 1.

Legal Proceedings

Legal Proceedings 39 Item 1A.

Risk Factors

Risk Factors 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39 Item 3. Defaults Upon Senior Securities 39 Item 4. Mine Safety Disclosures 39 Item 5. Other Information 39 Item 6. Exhibits 40

Forward-Looking Statements

Forward-Looking Statements The discussions in this Quarterly Report on Form 10-Q ("Report") contain forward-looking statements reflecting our current expectations that involve risks and uncertainties. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. When used in this Report, the words "anticipate," "expect," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify forward-looking statements. These are statements that relate to future periods and include, but are not limited to, statements about the features, benefits and performance of our products, our ability to introduce new product offerings and increase revenue from existing products, expected expenses, including those related to selling and marketing, product development and general and administrative, our beliefs regarding the health and growth of the market for our products, anticipated increase in our customer base, expansion of our products' functionalities, expected revenue levels and sources of revenue, expected impact, if any, of legal proceedings, the adequacy of our liquidity and capital resources, including our ability to receive sufficient funding from our existing financing arrangements or from future financings and the expected terms of such financing, and expected growth in business. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements contained in this Report. Factors that could cause actual results to differ materially include, but are not limited to: the outcome of continuing discussions between the parties with respect to the Recent Transactions (as defined below), including the possibility that the parties may terminate certain of the Recent Transactions or that the terms of certain of the Recent Transactio

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Workhorse Group Inc. Condensed Consolidated Balance Sheets September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 12,726,147 $ 4,119,938 Restricted cash 25,475,596 525,000 Accounts receivable, less allowance for credit losses of $ 0.2 million and $ 0.3 million as of September 30, 2025 and December 31, 2024, respectively 1,151,976 537,536 Other receivables, net 1,460,100 544,436 Inventory, net 29,999,387 41,839,020 Prepaid expenses and other current assets 2,148,595 5,865,890 Total current assets 72,961,801 53,431,820 Property, plant and equipment, net 21,120,568 32,976,581 Operating lease right-of-use assets, net 22,236,613 3,247,548 Finance lease right-of-use assets, net — 4,008,510 Other assets 416,310 176,310 Total Assets $ 116,735,292 $ 93,840,769 Liabilities Current liabilities: Accounts payable $ 11,225,948 $ 11,509,149 Accrued liabilities and other current liabilities 7,127,368 8,731,915 Deferred revenue 1,057,000 6,350,581 Warranty liability 1,209,129 861,409 Operating lease liability - current portion 2,707,209 984,407 Finance lease liability - current portion — 528,023 Warrant liability at fair value 9,983,695 5,778,660 Convertible notes at fair value 27,119,114 10,491,792 Total current liabilities 60,429,463 45,235,936 Convertible note at fair value - long-term 5,148,000 — Operating lease liability - long-term 19,087,603 4,295,743 Financing lease liability - long-term — 21,165 Total Liabilities 84,665,066 49,552,844 Commitments and contingencies Stockholders' Equity: Common stock, par value $ 0.001 per share, 36,000,000 shares authorized, 21,277,037 shares issued and outstanding as of September 30, 2025 and 3,843,341 shares issued and outstanding as of December 31, 2024* 21,276 3,843 Additional paid-in capital * 928,660,494 897,642,626 Accumulated deficit ( 896,611,544 ) ( 853,358,544 ) Total stockholders' equity 32,070,226 44,287,925 Total Liabil

View Full Filing

View this 10-Q filing on SEC EDGAR