• Full Year 2024 Net Sales: $8.4 million, up 455% from $1.53 million in 2023.
• Q4 2024 Net Sales: Approximately $2.93 million, a 250% increase from $839,000 in Q4 2023.
• Gross Profit for 2024: Approximately $910,000, reflecting a gross margin of about 11%.
• December 2024 Gross Margin: Exceeded 20%, nearly three times that of Q3 2024.
• Operating Loss for 2024: $16.16 million, compared to $14.93 million in 2023.
• Cash and Cash Equivalents (End of 2024): $4.88 million, up from $3.37 million at the end of 2023.
• Working Capital (End of 2024): $7.3 million, up from $1.96 million at the end of 2023.
• Inventory (End of 2024): $5.19 million, representing roughly 50% of current assets.
• 2025 Revenue Guidance: $20 million to $34.5 million.
• 2025 Gross Margin Target: Expected to reach 25% to 30% by late 2025.

• Warning! GuruFocus has detected 6 Warning Signs with WKSP.

Release Date: March 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Worksport Ltd (NASDAQ:WKSP) achieved significant revenue growth in 2024, with net sales increasing by 455% to $8.4 million from $1.53 million in 2023.
• The company successfully expanded its product lineup, including the launch of the premium AL4 tonneau cover and the upcoming HD3 cover aimed at commercial and fleet customers.
• Worksport Ltd (NASDAQ:WKSP) improved its gross margins significantly, with December 2024 margins exceeding 20%, and expects further margin improvements in 2025.
• The company has strengthened its financial foundation, ending 2024 with $4.88 million in cash and cash equivalents, up from $3.37 million in 2023.
• Worksport Ltd (NASDAQ:WKSP) expanded its sales channels, with online sales accounting for 58% of total revenue in 2024, up from 7% in 2023, and increased its dealer network by 30% in early 2025.

Negative Points

• Despite revenue growth, Worksport Ltd (NASDAQ:WKSP) reported an operating loss of $16.16 million in 2024, up from $14.93 million in 2023.
• The company's cost of sales increased to 89% of net sales in 2024, up from 84% in 2023, due to strategic discounting and higher overhead allocation.
• Worksport Ltd (NASDAQ:WKSP) faces uncertainties related to geopolitical issues, tariffs, and supply chain challenges, particularly concerning semiconductors and solar panels.
• The company anticipates a broad range of revenue guidance for 2025, indicating potential variability in achieving its targets.
• Worksport Ltd (NASDAQ:WKSP) has not yet realized revenue from its Terravis Energy subsidiary, with commercialization of its AetherLux heat pump system still in development.

Q & A Highlights

Q: Can you provide insights on the distribution of online sales and their impact on margins for the second half of 2025? A: Steven Rossi, CEO, explained that Worksport aims for a 50-50 split between sales through its online platform and dealer/business-to-business units. The focus is on driving traffic to their website to build customer relationships and offering exclusive products online and through dealers to maintain competitiveness.

Q: What is the expected launch strategy for the solar cover and COR products in 2025? A: Steven Rossi, CEO, outlined three paths: selling the solar cover alone, a bundled package with the COR battery system, and the COR system alone. The focus will be on larger power units suitable for significant power needs, such as job sites and emergency situations.

Q: How does Worksport plan to achieve the high end of its 2025 revenue guidance? A: Steven Rossi, CEO, stated that the low end of the guidance is achievable through tunnel cover sales alone. The high end depends on the successful uptake of SOLIS and COR products, with geopolitical factors and supply chain issues being potential challenges.

Q: What are the expectations for gross margins in 2025, and what was the starting point? A: Michael Johnston, CFO, noted that late Q4 2024 gross margins were about 21%. The focus in 2025 will be on higher-margin products like the AL4 and HD3, aiming for gross margins in the 25% to 30% range by year-end.

Q: Can you elaborate on the R&D expenses in 2024 and expectations for 2025? A: Steven Rossi, CEO, mentioned that 2024 R&D expenses were driven by prototyping the COR battery system and tooling costs. In 2025, R&D expenses are expected to be significantly lower as the company transitions from development to production.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.