Serve Robotics (SERV) Financials

Serve Robotics Inc. (NASDAQ: SERV) has shown a clear trend of operating losses across the last several quarters, with revenue growing but costs and expenses far outpacing top-line growth.

Key Positive Trends:

• Operating revenue increased steadily from $40,252 in Q1 2023 to $175,842 in Q4 2024, indicating strong top-line growth momentum.
• Total cash from financing activities has grown each quarter, reflecting successful equity raises peaking at $77.6 million in Q4 2024, which supports ongoing operations and expansion.
• Non-cash adjustments, notably depreciation and amortization, have been consistently added back in cash flow statements, helping net cash from operations show less severe declines.
• The company’s total assets have expanded significantly, driven by increases in cash and property, plant, and equipment, suggesting investment in infrastructure.

Neutral Observations:

• Weighted average diluted shares outstanding have increased substantially from about 6.7 million in early 2023 to over 36.6 million by Q4 2024, indicating dilution but also capital raises.
• Interest and other income/(expense) items have fluctuated, generally contributing negatively to pre-tax income, but not heavily impacting core operations.
• Serve Robotics has zero long-term debt reported in the latest balance sheets, showing an absence of long-term leverage risk currently.

Key Negative Trends:

• Serve Robotics has had operating losses every quarter, with Q4 2024 showing a net loss exceeding $13 million and operating expenses growing to over $12.9 million, driven largely by R&D (~$6.8 million) and selling/general/admin expenses (~$6.2 million).
• Gross profit remains negative in all reported quarters, with Q4 2024 gross loss of $656,000, showing revenue is still insufficient to cover direct costs.
• Negative net cash from continuing operating activities persisted, with increasingly larger outflows each quarter (e.g., -$6.3 million in Q4 2024), reflecting cash burn from operations.
• Retained earnings are substantially negative (e.g., -$94.4 million as of Q3 2024), indicating cumulative accumulated losses and no profitability to date.
• The company has experienced significant quarterly net losses per share that widened over the periods analyzed, from -$0.74 in Q2 2023 to -$0.23 in Q4 2024 on a basic EPS basis, reflecting continuing losses despite revenue growth.

Summary: Serve Robotics is in a capital-intensive growth phase, raising significant equity capital to fund operations and investing heavily in research and development. While revenue growth is notable, costs remain unsustainably high, leading to consistent net losses and negative gross profit. Cash flow from operations continues to be negative, increasing cash burn risk despite strong financing inflows. Retail investors should be mindful of high dilution trends, ongoing losses, and the need for the company to eventually scale revenue and control costs to achieve profitability.