Nio’s ET5 stands on display at the Central China International Auto Show on May 25, 2023, in Wuhan, China.
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Nio on Tuesday reported narrowing losses in the third quarter, but gave a revenue forecast below market expectations.
Here’s how Nio did in the third quarter, according to LSEG consensus estimates:
Revenue: 19.1 billion Chinese yuan ($2.7 billion) versus 19.4 billion yuan expected.
Loss per share: 2.67 yuan per share loss versus 2.91 yuan loss expected. That was smaller than the 3.7 yuan per share loss recorded in the second quarter of the year.
Revenue rose 47% year-on-year.
Nio shares were around 4% higher in pre-market trade in the U.S., reversing earlier losses that followed the results.
Investors are focusing on the Chinese electric carmaker’s ability to be more disciplined in its spending, as it charts a path to profitability.
Nio CEO William Li reiterated the company’s focus on being more efficient.
“We have identified opportunities to optimize our organization, reduce costs and enhance efficiency,” Li said Tuesday.
Some of those efforts are already bearing fruit. Nio reported a net loss of 4.6 billion yuan in the third quarter, down 24.8% from the second quarter of 2023, but still higher than the same period of 2022.
China’s electric vehicle market is incredibly competitive, with Nio facing pressure from other startups, like Xpeng and Li Auto, as well as giants such as Tesla and BYD.
The company said fourth-quarter revenue will be between 16.1 billion yuan and 16.7 billion yuan, representing a year-on-year increase of between 0.1% to 4.0%. Analysts expected a forecast of 22.4 billion yuan in the December quarter.
Nio also anticipates it will deliver between 47,000 and 49,000 vehicles in the fourth quarter — a hike of approximately 17.3% to 22.3% year-on-year.
Focus on efficiency
This year, China’s EV market has been the stage of a price war sparked by Tesla, which has forced carmakers to slash vehicle prices and put pressure on margins.
Nio’s gross margin was 8% in the third quarter, down from 13.3% in the same period last year.
As Nio is yet to turn a profit since it was founded in 2014, the company is trying to show investors that it can balance the need for investments, while also being more disciplined with costs.
Li said on Tuesday that Nio would defer or terminate any projects that won’t bring a financial contribution in the coming three years. He added that the company will make sure that it doesn’t “dilute” investments in core areas like technology and its sales and service network, as it prepares “for the more intense competition in the coming two years.”
As part of this push, Nio on Tuesday announced that it has entered into an agreement to acquire certain manufacturing equipment and assets from Anhui Jianghuai Automobile Group Corp. (JAC) for 3.16 billion yuan. JAC currently manufactures Nio cars.
Li said that bringing manufacturing entirely in house could reduce the costs of such operations by 10%, but that the company would exclude battery manufacturing from being drafted in-house, as the measure would not improve gross margin.
Nio CFO Steven Wei Feng said that the company’s vehicle margin, which was 11% in the third quarter, can rise to 15% in the fourth quarter, helped by lower material and component costs, as well as better manufacturing capacity.
In 2024, the company is targeting a vehicle margin of between 15% and 18%, the CFO said.
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.
Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.
Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.
Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.
The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.
But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.
Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.
In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.
“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”
Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.
Sajjad Hussain | AFP | Getty Images
Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.
Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.
The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.
The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
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The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.
Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.
“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.
Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.
Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.
The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.