ECD Automotive 2025 Q1 Earnings Misses Targets as Net Loss Narrows Slightly

ECD Automotive (ECDA) reported its fiscal 2025 Q1 earnings on May 21st, 2025. The company missed revenue expectations, reporting a figure of $6.42 million, down from $6.99 million in Q1 2024. Despite the revenue decline, ECD Automotive managed to narrow its net loss slightly to $2.75 million compared to $2.86 million in the same quarter last year. The company did not provide specific revenue targets but remains focused on achieving positive cash flow through strategic initiatives.

Revenue
The revenue for ECD Automotive in Q1 2025 declined by 8.1% to $6.42 million compared to the same quarter last year. The decline was primarily attributed to lower unit volume, although this was partially offset by higher unit prices. Specifically, revenue from builds was $6.41 million, while the warranty and other segment contributed $13,472.

Earnings/Net Income
ECD Automotive narrowed its losses to $0.08 per share in Q1 2025, a slight improvement from a loss of $0.09 per share in Q1 2024, representing an 11.1% improvement. The company reduced its net loss by 3.8%, reporting a net loss of $-2.75 million compared to $-2.86 million in the previous year, indicating moderate financial progress.

Price Action
The stock price of ECD Automotive has tumbled 9.33% during the latest trading day, has plummeted 26.49% during the most recent full trading week, and has plummeted 33.98% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing ECDA shares following a revenue miss and holding them for 30 days has proven detrimental, yielding substantial losses. The approach resulted in a return of -96.10%, significantly underperforming the benchmark by 131.68%. With a Sharpe ratio of -0.66 and a maximum drawdown of -96.67%, the strategy was fraught with high risk and poor returns, highlighting the volatility and unpredictability associated with the stock's performance during this period.

CEO Commentary
Scott Wallace, CEO & Co-Founder of ECD Automotive Design, expressed that the first quarter of 2025 marked a significant period with revenues of $6.4 million driven by a focus on high-value builds, achieving an average selling price of $320,000. He highlighted the company's ability to maintain industry-leading gross margins of 27.5% through an evolving customer design journey that enhances customization and operational efficiencies. Wallace noted strong customer demand and emphasized the strategic shift towards retail channels to boost liquidity and improve cash flow, while acknowledging challenges related to the company's balance sheet.

Guidance
ECD Automotive Design anticipates continued growth in 2025, with expectations to maintain gross margins at historical levels while addressing liquidity concerns. The company is focused on converting inventory into cash and enhancing profitability through innovative customization options. While specific revenue targets were not disclosed, Wallace indicated confidence in achieving positive cash flow as they optimize sales processes and leverage retail initiatives.

Additional News
ECD Automotive Design has been active in enhancing its market presence and product offerings. Recently, the company unveiled the '67 Ghost, a bespoke custom Mustang, marking its entry into the custom Mustang market. Additionally, ECD introduced its most powerful Defender yet, featuring a 700+ horsepower engine in response to client demand. The company also launched Project Beach Patrol, a custom Defender 90 soft-top restoration, showcasing vibrant design and robust performance. These initiatives reflect ECD's commitment to innovation and customer-centric product development as it navigates industry challenges.