Q3 2024 Nuvve Holding Corp Earnings Call

November 12, 2024

Paul We have Gregory <unk>, Chief Executive Officer, and David Robson, Chief Financial Officer of New vision.

Paul We have Gregory <unk>, Chief Executive Officer, and David Robson, Chief Financial Officer of movie.

Earlier today <unk> issued a press release announcing its third quarter 2024 results. Following prepared remarks, we will open the call up for questions. Before we begin I would like to remind you that this call may contain forward looking statements. While these forward looking statements reflect new vs best current judgment.

They are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward looking projections. These risk factors are discussed in new vs filings with the SEC and in the earnings release issued today, which are available on our website <unk>.

They are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward looking projections. These risk factors are discussed in new vs filings with the S. E C and in the earnings release issued today, which are available on our website <unk>.

Speaker Change: <unk> undertakes no obligation to revise or update any forward looking statements to reflect future events or circumstances with that I would like to turn the call over to Gregory <unk>, Chief Executive Officer of New V. Gregory.

<unk> undertakes no obligation to revise or update any forward looking statements to reflect future events or circumstances with that I would like to turn the call over to Gregory <unk>, Chief Executive Officer of Newbie Gregory.

Gregory: Thank you and good afternoon to everyone here today welcome to our third quarter of 2020 for our results call.

Gregory: This quarter has been a very active one.

This quarter I've been a very active one.

Gregory: It's been very active in many ways and we're excited to share more details with you today.

It's been very active in many ways and we are excited to share more details with you today.

Gregory: So the third quarter has remained challenging for a movie we are seeing that the fruit of multiple efforts we have been carrying out. During this period is now paying off we are.

Gregory: Third quarter has remained challenging for movie we all think that the fruit of multiple efforts we have been carrying out during this period is now paying off we.

Gregory: We haven't been able to reduce our expenses with minimal impact to our personal care.

Gregory: Been able to reduce our expenses with minimal impact to our own personal care.

Gregory: We have been increasing our margins while our top line sales are finally picking up.

Gregory: We have been increasing our margins, while our topline sales are finally picking up.

Gregory: Some of it driven by the kickoff of our hub project with a phrase no economic opportunity Commission.

Gregory: Some of it driven by the kickoff of our hub project with our Fresno economic opportunity Commission.

Gregory: In the meantime, we have been working with new investors on the convertible loan that we have closed post the end of the quarter.

Speaker Change: Through that period, David and myself I've provided a bridge loan to the company showing our engagement and support business.

Speaker Change: Karen David and myself I've provided a bridge loan to the company showing our engagement and support.

Speaker Change: Yes.

Speaker Change: Sales in our school bus business are finally picking up after an extremely sluggish start of the year driven by a slower than expected process from the EPA Notifying school districts that are approved for funding.

Speaker Change: The new program is based on E. P. A round two and round three releases.

Speaker Change: Ability, we will see some benefit in our Q4 revenue. We also expect revenue will slide into 2025.

Speaker Change: And we are now working on our EPA around four.

Speaker Change: Q3 also allowed us to finally recognize some revenue from the project with a phrase know EOC Commission.

Speaker Change: Q3 also allowed us to finally recognize some revenue from the project with a phrase know EOC commit.

Speaker Change: Commission in in the Fresno County.

Speaker Change: These key project has been for a long time in the making.

Speaker Change: It does not only bring us some critical cash through a project management fee is.

Speaker Change: It's also securing a strong baseline revenue for 2025.

Speaker Change: As a reminder, <unk> software platform will be connected through a variety of resources, such as solar generation storage charging stations electric vehicle and a microgrid manager.

Providing the ability to manage and optimize site energy consumption and to aggregate resources across multiple sites to participate into ancillary services and other grid services market.

Speaker Change: Providing the ability to manage and optimize site energy consumption and to aggregates resources across multiple sites to participate into ancillary services and other grid services market.

Speaker Change: The platform is acting as a true grid monetization platform, allowing fleet operators to save money.

Speaker Change: <unk>, two <unk> faster and optimize its capital asset life.

Speaker Change: <unk> two even if it's faster and optimize its capital asset life.

Concerning our collaboration with high Power Corporation, we have now signed a contract with our partner <unk> Formula and breaking ground events will most likely happen mid February after the Chinese new year.

Speaker Change: Concerning our collaboration with high Power Corporation, we have now signed a contract with our partner <unk> Formula and breaking ground events will most likely happen mid February after the Chinese new year.

Speaker Change: We're in the process of finalizing the date.

Speaker Change: We are in the process of finalizing the date.

Speaker Change: As a reminder, this project includes a total deployment of 90, plus charging stations and stationary storage and he's using the same technology being deployed in a phrase know Yossi project.

Speaker Change: As a reminder, this project includes a total deployment of 90, plus charging stations and then stationary storage and is using the same technology being deployed in a phrase know Yossi project.

Speaker Change: These Taiwanese project as a 20 year life and the scaling of the deployments will be adjusted based on local demand.

Speaker Change: The first phase is targeting a small feat of equal degree comparable shuttles, providing transportation services to employee for local companies in <unk> going from the train station to the company buildings.

Speaker Change: The first phase is targeting a small fleet of equal degree compatible shuttles, providing transportation services to employee for local companies in <unk> going from the train station to the company buildings.

Speaker Change: Other projects, assuming up on the island of Taiwan, and we hope to share more with you soon.

Speaker Change: Other projects are trending up on the island of Taiwan, and we hope to share more with you soon.

Speaker Change: Concerning our joint work with why is easy LLC addressing public infrastructure multiple sites are now signed up with us and the TEP application have been are in the process of being submitted to NV energy.

Speaker Change: Concerning our joint work with wide EV LLC addressing public infrastructure multiple sites are now signed up with us and the TEP application have been are in the process of being submitted to NV energy.

Speaker Change: In parallel we're negotiating with different parties to provide debt financing to these SPV supporting these deployments.

Speaker Change: As a reminder, these SPV, allowing us to accelerate new technology deployment.

Speaker Change: As a reminder, this SPV, allowing us to accelerate new technology deployment save money for EV drivers by providing attractive energy cost pricing and reliable equipment and bring non dilutive cash to movie in the form of prepaid services.

Speaker Change: If money for EV drivers by providing attractive energy cost pricing and reliable equipment and bring non dilutive cash to movie in the form of prepaid services.

Speaker Change: First SPD will be funded through debt provided to the SPV for the whole project cost of $1 $2 million.

Speaker Change: The first SPD will be funded through debt provided to the SPV for the whole project cost of $1 2 million.

Speaker Change: We believe the SPV structure, we have adopted makes our future revenue more forecastable and provides cash up front revenue recognition revenue recognition might be delayed in some cases, but again this will make our road feature of any more forecastable.

We believe the SPV structure, we have adopted mix, our future revenue more forecastable and provides cash upfront.

Revenue rotating revenue recognition might be delayed in some cases, but again this will make a real feature of any more forecastable.

Speaker Change: Yeah.

Speaker Change: As a short update on our engagements with capital global working on key strategic investments, we're still making progress and we hope to share with you some of the data very soon.

Speaker Change: Finally, a couple of remarks on the outcome of the election.

Speaker Change: At this point I want to emphasize that movie is not just in the company.

Speaker Change: The gift platform creates a bridge between the needs from the grid and that sets such as stationary storage local energy generation EV another significant loads.

Speaker Change: The gift platform creates a bridge between the needs from the grid and assets such as stationary storage local energy generation EV another significant lows.

Speaker Change: For the first time since 1990, the load in the United State grid is increasing and energy volatility is getting louder and louder.

Speaker Change: The gift platform capabilities allows us to drastically reduce the fix on the grid and need to make and is ideal for grid modernization.

Speaker Change: The gift platform capabilities allows us to drastically reduce the ticks on the grid and need to make and is ideal for grid modernization without such a platform the cost of energy will be prohibitive there.

Speaker Change: Without such a platform the cost of energy will be prohibitive.

The need for our platform exists with or without federal EDI mandates.

Speaker Change: A need for our platform exists with or without federal EDI mandates.

Speaker Change: Let's regulation in Canada for the airports to scale our business faster.

Speaker Change: And now I will ask David to take you through the details of our financials David.

David: And now I will ask David to take you through the details of our financials David.

David: Thanks, Gregory I will start with a recap of third quarter 2024 results in the third quarter. We generated total revenues of $1 9 million compared to $8 million in the second quarter of 2024, and $2 7 million in the third quarter of 2023 and one.

David: The $1 1 million quarter over quarter revenue increase this year was driven by $8 9 million increase in service revenues and $8 2 million increase in hardware revenues.

David: One 1 million quarter over quarter revenue increase this year was driven by $8 9 million increase in service revenues and $8 2 million increase in hardware revenues.

David: $6 million of the service revenue earned this quarter relates to our hub project in Fresno, California, which we kicked off earlier this year with.

David: When compared to last year, the third quarter decrease in revenues of <unk> 8 million was impacted by the non recurring easy school bus sales. So last year of <unk> 9 million offset by higher service revenues.

David: Year to date revenues through September 32024 were $3 5 million compared to $6 7 million for the prior year period or a decline of $3 2 million.

David: Year to date revenues through September 32024 were $3 5 billion compared to $6 7 million for the prior year period or a decline of $3 2 million.

David: The $3 2 million decline was impacted by a reduction in charge of hardware sales of $2 4 million.

David: The $3 2 million decline was impacted by a reduction in charge your hardware sales of $2 4 million.

David: And the nonrecurring EV bus sales, a <unk> 9 million.

David: And the nonrecurring EV bus sales up <unk> 9 million.

David: This year, we have seen delays in EPA funding awards, when compared to last year, which has negatively impacted the pace of hardware sales this year.

David: Despite the reduction in revenues over last year, we have improved our gross margins gross margins for the third quarter 2020, 441 million compared to <unk> 3 million for the third quarter last year.

David: Year to date gross margin through September 32024, or one 5 million compared to $1 9 million for the same period last year.

David: Year to date gross margins through September 32024, or one 5 million compared to $1 9 million for the same period last year.

David: The increase in gross margins is primarily due to improved pricing in hardware sales and a higher mix of service revenues compared with last year.

As a reminder, margins can be lumpy from quarter to quarter, depending on the mix you see charge your gross margins at standard pricing generally range from 15% to 25% while AC charge. Your gross margins are approximately 50%, but in dollar terms are a small fraction of the revenue of the <unk>.

David: As a reminder, margins can be lumpy from quarter to quarter, depending on the mix you see charge your gross margins at standard pricing generally range from 15% to 25% while AC charger gross margins are approximately 50%, but in dollar terms are a small fraction of the revenue of the <unk>.

David: Charging grid.

David: Charger grid.

David: Grid service revenue margins are generally 30%, while software and engineering service margins are as high as 100%.

David: Operating costs, excluding cost of sales were $2 8 million for the third quarter of 2024 compared to $6 million for the second quarter of 2024, and $8 8 million for the third quarter of 2023.

David: $3 2 million decrease over last quarter was primarily due to lower payroll and consulting expenses. We continue to focus our efforts on improving operating efficiencies, which has resulted in lower overhead costs.

David: Cash operating expenses, excluding cost of sales stock compensation, and depreciation and amortization expense declined to $2 2 million in the third quarter of 2024 versus $5 4 million in the second quarter of 2024, and $7 6 million in the third quarter.

David: <unk> of 2023.

David: Other income was 187000 in the third quarter of 2024 up from 130000 in the year ago quarter.

Other income was 187000 in the third quarter of 2024 up from 130000 in the year ago quarter.

David: The current period benefited from noncash gains from the change in fair value of warrants offset by interest expense.

David: Net loss attributed to newly common stockholders decreased in the third quarter of 2024 to one 6 million from a net loss of $8 6 million in the third quarter 2023.

Net loss attributed to new the common stockholders decreased in the third quarter of 2024 to one 6 million from a net loss of $8 6 million in the third quarter of 2023.

David: The $6 9 million improvement was the result of higher gross margins of <unk> 7 million lower operating expenses of $5 9 million and increased other income of <unk> 3 million.

David: $6 9 million improvement was the result of higher gross margins of <unk> 7 million lower operating expenses of $5 9 million and increased other income of <unk> 3 million.

David: Now turning to our balance sheet, we had approximately <unk> 3 million in cash as of September 32024, excluding $5 million in restricted cash, which represents a decrease of $1 1 million from June 32024.

David: Now turning to our balance sheet, we had approximately <unk> 3 million in cash as of September 32024, excluding <unk> 5 million of restricted cash which represents a decrease of $1 1 million from June 32024.

David: The $1 $1 million decrease in cash was a result of cash operating losses of $1 million.

David: Negative working capital of $2 6 million offset by $2 5 million in cash received from the issuance of short term promissory notes.

Negative working capital of $2 6 million offset by $2 5 million in cash received from the issuance of short term promissory notes.

Subsequent to the quarter ended September 32024.

David: Subsequent to the quarter ended September 32024.

David: We received an additional $3 1 million in proceeds from the issuance of convertible notes due this October.

David: Which will be paid off in monthly payments with interest in either cash or equity beginning in February 2025 through April 2026.

David: During the quarter inventories decreased by <unk> 3 million to $5 7 million.

David: During the quarter inventories decreased by <unk> 3 million to $5 7 million at.

David: At September 32024, as we.

David: At September 32024, as we continue.

David: Continue to reduce inventory levels.

Continue to reduce inventory levels.

David: <unk> payables at the end of the third quarter of 2024 was $2 2 million, an increase of <unk> 3 million compared to the second quarter of $1 9 million accrued.

David: <unk> payables at the end of the third quarter of 2024 was $2 2 million, an increase of <unk> 3 million compared to the second quarter of $1 9 million.

David: Accrued expenses at the end of the third quarter of 2024 was $3 3 million a decrease of $1 7 million compared to the second quarter of $4 9 million reduction in crude expenses was principally due to lower accruals for payroll and consulting expenses.

David: Accrued expenses at the end of the third quarter of 2024 was $3 3 million a decrease of $1 7 million compared to the second quarter of $4 9 million reduction in critics' best This was principally due to lower accruals for payroll and consulting expenses.

David: Regarding our joint venture with stone, peaking evolve their conditional capital contribution commitments and our subsidiary Levo mobility expired on August four 2024 as defined in our LLC agreement along with the expiration of their capital commitment during the third quarter, we purchased.

David: Along with the expiration of their capital commitment during the third quarter, we purchased from stone peak and evolve their interest in levo mobility for a nominal amount, which resulted in a reduction in our mezzanine equity to zero as well as the cancellation of $5 1 million of liabilities associated with the joint.

David: From stone peak and evolve their interest in levo mobility for a nominal amount, which resulted in a reduction in our mezzanine equity to zero as well as the cancellation of $5 1 million of liabilities associated with the joint venture, including the derivative liability for the Noncontrolling.

David: Venture, including the derivative liability for the Noncontrolling interest and dividend liability due to stone P can evolve.

David: <unk>.

David: And dividend liability due to stone P can evolve.

David: Now.

Now.

David: Turning to our megawatts under management and estimated future grid service revenues as a reminder megawatts under management is a metric we use to quantify the aggregated amount of electrical capacity from the deployment of our <unk> and <unk> Chargers, which are primarily deployed in the electric school bus.

David: In the U S and in the light duty fleet deployments in Europe. In addition to stationary batteries. Currently these charges and batteries are located throughout the United States Europe and Japan.

David: Megawatts under management in the third quarter increased seven 7% over the second quarter of 2024 to 29, two megawatts from $27 one megawatts, a 37, 3% increase compared to the third quarter of 2023.

David: Megawatts under management in the third quarter increased seven 7% over the second quarter of 2024 to 29, two megawatts from 27, one megawatts, a 37, 3% increase compared to the third quarter of 2023.

David: In terms of its composition seven one megawatts were from stationary batteries.

David: In terms of its composition seven one megawatts were from stationary batteries and $22 one megawatts were from EV Chargers.

David: And $22 one megawatts were from EV Chargers.

David: We continue to expect further growth in our megawatts under management as we go through the remainder of the year and continue to commission our backlog of customer orders. We have earn in addition to new business, we anticipate winning which we have visibility to and our pipeline for both EV Chargers and stationary batteries.

We continue to expect further growth in our megawatts under management as we go through the remainder of the year and continue to commission our backlog of customer orders. We have earn in addition to new business, we anticipate winning which we have visibility to and our pipeline for both EV Chargers and stationary batteries.

David: Now turning to backlog on September 30th our hardware and service backlog decreased by <unk> 7 million to $17 5 million from $18 2 million reported at June 32024 year to date backlog. This year has increased by 13 six.

David: 6 million from $3 9 million at December 31, 2023, which is primarily related to the large hub project in Fresno, California, which was closed during Q1 of this year.

<unk>.

David: $3 9 million at December 31, 2023, which is primarily related to the large hub project in Fresno, California, which was closed during Q1 of this year.

David: And revenue has begun to be recognized this quarter.

David: As we look out for the next several quarters, we expect to see more activity on the Fresno hub opportunity as this project gets built out we also anticipate improvements in our cash burn, resulting from the benefits of lower operating costs and improved gross margins compared with last year.

Okay.

David: This concludes my portion of the prepared remarks Gregory back to you to conclude.

Gregory: Thank you David.

Gregory: Though the third quarter of 2024 has remained challenging we see it as a turning point.

Gregory: The third quarter of 2024 has remained challenging we see it as a turning point we.

Gregory: We are finally being able to close on some of our big projects not only securing short term cash, but also certifying earthquake 25 revenue.

Gregory: We have finally been able to close on some of our big projects not only securing short term cash, but also certifying your equate twenty-five revenue.

Gregory: We have been managing our cash tightly personally supporting the company when required.

Gregory: We still see the extension of our reach within segments, where we can bring significant value and where government support is essential diversifying our source of revenue and bringing more quarter to quarter stability.

Gregory: We still see the expense of our reach within segments, where we can bring significant value and where government support is essential diversifying our source of revenue and bringing more quarter to quarter stability.

Gregory: These also deployments, where we feel like we have a better control on the timing.

Gregory: Monday for renewable generation storage and in some cases EV deployment being implemented in many places in the U S and in Europe.

Gregory: Monday for renewable generation storage and in some cases EBIT appointments are being implemented in many places in the U S and in Europe with.

Gregory: With such mandates, we see movie gift platform as a key grid monetization tool.

Gregory: Finally, we hope to share the progress we are making in our strategic path very soon with you. Thank.

Gregory: Finally, we hope to share the progress, we're making in our strategic path very soon with you. Thank.

Speaker Change: Thank you very much.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.

Speaker Change: Any time your question has been addressed and you would like to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Speaker Change: Seeing no questions. This concludes our question and answer session I would like to turn the conference back over to Gregory <unk> for any closing remarks.

Seeing no questions. This concludes our question and answer session I would like to turn the conference back over to Gregory.

Gregory: <unk> for any closing remarks.

Gregory: Thank you for listening to us today, and we are looking to be able to share with you more with you soon thank.

Gregory: Thank you.

Speaker Change: Thank you.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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