LVWR

LiveWire Group, Inc. (LVWR) - Q2 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026. LiveWire Group, Inc. operates in two segments: Electric Motorcycles (including the recently acquired Dust Motorcycles off-road platform) and STACYC (electric balance bikes and adult electric bikes). The Company is an emerging growth company and a controlled company of Harley-Davidson, Inc. (H-D).

Key Financial Metrics

Note: Free Cash Flow calculated as Net Cash Used by Operating Activities plus Net Cash Used by Investing Activities.

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 55% year-over-year for the quarter and 65% year-over-year for the six months, driven primarily by a 389% increase in Electric Motorcycle unit sales (267 units vs. 55 units in Q2 2025) and 13% growth in STACYC unit sales.
• Segment Performance: The STACYC segment achieved operating income of $26,000 in Q2 2026, a significant improvement from an operating loss of $(261,000) in Q2 2025. The Electric Motorcycles segment operating loss remained relatively flat at $(18.04) million.
• Acquisition Impact: On May 18, 2026, LiveWire acquired Dust Motorcycles, Inc. for a total consideration of approximately $3.63 million (cash, equity, deferred, and contingent). This acquisition added $424,000 in acquisition-related costs to YTD expenses.
• Debt Financing: The Company incurred $1.45 million in related-party interest expense in Q2 2026 (zero in Q2 2025) due to a $75 million term loan drawn from H-D in December 2025.
• Warrant Liability: The Company recognized a gain of $911,000 in Q2 2026 due to a decrease in the fair value of warrant liabilities, compared to a loss of $905,000 in Q2 2025.

Guidance, Outlook, and Risks

• Product Outlook: Management expects to introduce the S4 Honcho mini-motos later in summer 2026 and continue advancing the Dust electric dirt bike platform toward production.
• Liquidity: As of June 30, 2026, cash balances were $52.9 million. Management believes this is sufficient to fund operations for at least the next 12 months but expects to pursue additional financing in Q3 2026.
• ATM Program: The Company has an At-The-Market (ATM) program with $47.7 million of remaining capacity. Proceeds are subject to mandatory prepayment of the H-D term loan up to $10 million.
• Risks: Key risks include the Company's history of losses, dependency on H-D for manufacturing and services, supply chain constraints (batteries, semiconductors), and the ability to successfully integrate the Dust acquisition. The Company also faces potential dilution from earn-out shares and contingent consideration.

Investor Verification Checklist

• Cash Burn Rate: Verify the sustainability of the $52.9 million cash balance against the projected $3–8 million capital expenditure requirement and ongoing operating losses.
• Debt Covenants: Review the terms of the $75 million H-D term loan, specifically the mandatory prepayment clause tied to ATM proceeds and the maturity date of December 15, 2027.
• Acquisition Integration: Monitor the progress of the Dust Motorcycles platform toward production and the realization of synergies to offset the $3.63 million acquisition cost.
• Related Party Transactions: Assess the impact of the $6.08 million liability for excess inventory components owed to H-D and the ongoing reliance on H-D for contract manufacturing.
• Warrant Exercise Probability: Evaluate the likelihood of warrant exercises given the current stock price ($1.12) is significantly below the $11.50 exercise price.