Q4 2024 Nuvve Holding Corp Earnings Call

After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star 1 on your telephone keypad, and to withdraw your question, please press star 2.

'twenty 'twenty four has been an extremely challenging year, I should say or Ebola for the first time since 2021, our revenue went down compared to last year.

We know that would be another nicer indicates that it has been for most of the companies in our industry with many of them going out of business.

Do you guys have been hitting us across the board.

Concerning a K 12 school bus business during the first two quarters of the year. Many of the school District partners, we're expecting to receive the final EPA approval letters, which arrives sometimes with up to six month delay.

Putting them to hold on their purchase orders until they got the final approval later for that grants.

Q3, Q4, then picked up but the damage was already done.

In the same way I heard projects have been impacted with delays due to their financing taking more time than initially thought.

And though we are confident their financing will go through we are still finalizing some parents.

But we didn't we didn't have capacity.

First of all we have been working hard on reducing our costs, especially you have a cash expenses.

Okay got you a 'twenty 'twenty felt both a cash and noncash operating expense excluding cost of sales went down by 33% compared to our fiscal year 2023 expenses.

We are working every day and we're using our cash expenses trying to minimize the impact to operations product development and product qualification.

Well give you more in the tightened a few minutes.

We have also been working hard on expanding our business in order to reduce our exposure to governmental funding, especially figure almost subsidies and accelerate the revenue.

With this potential reduction on electric vehicles subsidies that we have decided to move more aggressively into the stationary battery business.

Our gift platform is very good at managing how to predict batteries availability from electric vehicles, such as school buses.

It also does an exceptional job at managing patient I batteries and can help extract more value from these batteries.

From my perspective stationary batteries are essential to provide grid modernization either behind them either all in front of the meter keeping the cost of energy Accretable.

We have now announced our first battery and service model in the United States, Our battery as a service business model for electric cooperative allows the co ops to deploy a stationary batteries, reducing their exposure to coincidental peaks a situation where the system is experiencing a peak consumption.

While the transmission system.

They are connected to it is also experiencing a peak.

These peaks made the cost of the kilowatt hour very expensive.

Our service allows co ops to keep the cost of energy low by really think peaks, while also providing more resiliency to their members.

We are also expanding I was fishing business battery I was fishing or your battery business in Japan, as we announced recently.

The Japanese battery aggregation market has been expanding rapidly and value for a platform like ours is strong.

Therefore, we have announced a couple of weeks ago, we're establishing a new entity in Japan.

This company is in the process of pursuing capital raising activities locally you he intends to keep a controlling interest in the new entity, while bringing aboard local investors, who support the local business and capital needs.

This is our second approach to reducing our cash expenses sharing some equity of our local subsidiaries, while leveraging our existing expenses in Japan. In addition to generating potential future cash flow for a newbie holding for services and access to the platform.

Now the last but not the least back into the U S. We have also been selected by the state of New Mexico to deploy a variety of electric vehicle and the corresponding infrastructure.

The addressable market opportunity is estimated at 400 million dollar of capital deployment, which is large complex and requires a significant focus for my organization.

Which is why we have decided that tends to mute our C. O N president will be 100% focused on this opportunity and it will become the CEO of our local organization.

That has been driving this different from the beginning and that created an amazing consortium of companies that we have that we will be announcing very soon.

The purpose for which the company is organized is to serve as the designated local presents for the execution of the state purchase agreements as W. P. A worthy to new V holding corp pursue on the electrified new Mexico initiative and to develop.

Tricked findings and no Perry the comprehensive suite of Green energy and transportation electrification solution in new Mexico and surrounding states.

These business activities include without limitation, a turnkey electric vehicle charging infrastructure and really related site development services be vehicle to grid <unk> technology deployment and aggregation.

Stationary battery energy storage system.

The microbial and resilient hubs E electric corridor charging network and depot level of charging system.

Vehicle procurement leasing and financing.

G devaluation acquisition removal and replacement of internal combustion engine vehicle fleets and related infrastructure to accelerate fee based application.

These new LLC with also seek investment for local investors, while it varies a newbie holding existing cash expenses and providing potential future cash flow to newquay holding through services provided to the new LLC.

In summary, those wait 24 is extremely challenging we have been able to survive it sometimes with an expensive price.

During these periods, we have been working on transforming the company, but we feel that we are now very well positioned as a grid modernization and vehicle to grid company to close another key opportunities and accelerate their business expansion working with both kept below global and Roth capital.

And now I will let David take you through the detail of our financials.

David: Thanks, Gregory I will start with a recap of fourth quarter 2024 results in the fourth quarter, we generated total revenues of $1 8 million.

David: Compared to $1 6 million in the fourth quarter of 2023.

David: The increase was primarily driven by higher charger hardware sales versus the same period last year.

David: During the full year 2024, total revenues were $5 3 million, which compares to $8 3 million for the prior year period, a year over year decrease in revenues is also primarily driven by the reduction in charter hardware sales to the tightening of EPA funding awards this year.

David: Last year as well as the sales school buses in the prior year period.

David: Margins on products services and grant revenues were 15, 8% for the fourth quarter of 2024.

David: Paired with 29% for the year ago period.

David: Our gross margin percentage in the fourth quarter of 2024 was impacted by competitive pricing pressures on the sale of DC Chargers to a single large customer.

David: Year to date margins through December 31, 2024, or 33, 1% compared with 16, 2% for the year ago period. The increase in the gross margin percentage was primarily due to overall higher pricing hardware sales nonrecurring E.

David: POS sales and a higher mix of service and grant revenues compared with last year.

David: Food and grant revenues margins on product and services were 11, 4% for the fourth quarter of 2024 compared to 24% in the year ago period on a full year basis, not including grant revenues the margins on product and service revenues was <unk>.

David: Seven 5% in 2024, compared with 12, 8% in the prior year.

As a reminder, margins can be lumpy from quarter to quarter, depending on the mix.

David: E charge gross margin stated standard pricing generally.

David: <unk> percent to 25%, while AC charter gross margins of approximately 50%, but in dollar terms for a small fraction of the revenue of the D. C. Charger grid service revenue margins are generally 30%, while software and engineering services margins are as high as 100%.

David: Operating costs, excluding cost of sales was $5 9 million for the fourth quarter of 2024, compared with $2 8 million for the third quarter of 2024, and $7 9 million for the fourth quarter 2023.

We've continued to drive efficiencies throughout 2024, resulting in lower overhead costs, we expect a lower.

David: Operating costs, we realized this quarter to continue into future quarters.

David: On a full year basis operating expenses decreased from $33 5 billion in 2023.

David: $222 2 million in 2024.

David: Mainly driven by lower payroll legal and public company expenses and consulting expenses.

David: Cash operating expenses, excluding cost of sales stock compensation, and depreciation and amortization expense increased to $5 1 million in the fourth quarter of 2024 versus $2. Two late in the third quarter of 2024 and.

David: <unk> decreased by $1 8 million.

David: $6 9 million in the fourth quarter of 2023.

David: Other income was $515000 in the fourth quarter of 2024 up from 130000 in the year ago quarter.

David: The current period benefited from noncash gains that.

David: The change in fair value of convertible debt and warrants offset by higher interest expense related to short term loans.

David: Net loss attributable to movie product stockholders decreased in the fourth quarter of 2024 to $5 1 million from a net loss of $7 5 billion in Q4 of 2023 <unk>.

David: The improvement was primarily a result of lower operating expenses.

David: Now turning to our balance sheet, we had approximately <unk> 4 million in cash as of December 31, 2024.

Excluding $3 million in restricted cash, which represents a decrease of $1 2 million from December 2023. The decrease was primarily the result of $15 7 million used in operating activities offset by net capital raise of $8 5 million.

David: Cash receipts from short term loans and promissory notes of $8 5 million.

David: Let's wait for the year ended December 31, 2024 during the first three months of 2025.

David: Additional $2 6 million in gross proceeds.

David: Combination of equity and debt offerings.

David: During the quarter inventories decreased by $1 1 billion to $4 6 million at December 31, 2024, as we continue to reduce inventory levels.

David: <unk> payable at the end of the four.

David: Fourth quarter of 2024 was $1 9 million a decrease of <unk> 3 million compared to the third quarter of $2 2 million.

David: Accrued expenses at the end of the fourth quarter of 2024 was $3 4 million, an increase of $1 1 million compared to the third quarter.

David: $3 3 million.

David: Now turning to our megawatts under management.

David: And estimated future grid service Rep.

David: As a reminder megawatts under management is a metric we use to quantify the aggregate amount of electrical capacity and the deployment of our <unk> and BTG charges, which are primarily deployed in the electric school bus market in the U S and in light duty fleet deployments in Europe and <unk>.

David: Stationary batteries.

David: Currently in East Chargers and batteries are located throughout the United States Europe and Japan.

David: Megawatts under management in the fourth quarter increased five 2% over the third quarter of 2024 to 37 megawatts from 29, two megawatts or 22, 2% increase compared to the fourth quarter of 2023 and.

David: In terms of its proposition seven one megawatts from stationary batteries and $23 six megawatts from EV Chargers.

David: We continue to expect further growth in our megawatts under management as we continue to commission our existing backlog of customer orders. We have heard in addition to new business, we anticipate winning which we have visibility to our pipeline.

David: <unk> and stationery patterns.

David: Now turning to backlog on December 31st our artwork service backlog increased to $18 3 million an increase of <unk> 8 million from $17 5 million reported at September 32024. This increase was related to contracts with customers that are expected to convert into sale.

David: In 2025 year to date backlog has increased by $14 4 million from $3 9 million at December 31, 2023.

David: Which was primarily related to a large hub project in Fresno, California, which we began recognizing revenue in Q3 and continue to recognize revenue through Q4 as well.

David: Look out to the next several quarters, we expect to see more activity on the Fresno up opportunity.

David: 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 margin dollars compared with last year that concludes my portion of the prepared remarks Gregory back to you to conclude.

Gregory: Thanks, David.

Gregory: Were very challenging from a revenue perspective, 'twenty 'twenty four is allowed us to work on our expense reduction and we are keeping on further reducing our cash expense without impacting your operations in impulse surety.

Gregory: Finally concerning a tragic path, we expect to hear soon from us, but I want to thank you and open the floor to questions.

Gregory: Thank you.

Speaker Change: I'd like to ask a question. Please press Star then one on your telephone keypad.

Gregory: My question has already been adjusting to remove yourself from queue. Please press Star then two.

Gregory: Pause for just a moment to assemble our roster.

Gregory: This concludes our question and answer session I'll turn the conference back over to Gregory for long for closing remarks.

Gregory: Thank you everybody.

Gregory: Thank you. This concludes today's conference call. We thank you all for attending today's presentation.

Gregory: You may now disconnect your lines and have a wonderful day.

Gregory: Yeah.

Gregory: [music].