Q1 2025 Pioneer Power Solutions Inc Earnings Call
Operator: Greetings and welcome to the Pioneer Pwr first quarter 2025 earnings map. At this time, all participants are in a listen-only mode.
Greetings and welcome to the pioneer power first quarter 2025 earnings conference call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Operator: A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone.
If anyone should require operator assistance. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
Brett Maas: As a reminder, this conference and now my pleasure to introduce your host, Brett Maas of Hayden Investor Relations. Thank you. You may.
Speaker Change: It's now my pleasure to introduce your host Brett Maas of Hayden Investor Relations. Thank you you may begin.
Speaker Change: Thank you operator, the call today will be hosted by Nathan Mazurek, Chairman and Chief Executive Officer, Walter Mechanic, Chief Financial Officer, and Geo American President of pioneer in E. Mobility. Following this discussion there will be a Q&A session open to participants on the call. We appreciate the opportunity to review the first quarter financial results and recent business highlights before we get started let me remind you that.
Brett Maas: The call today will be hosted by Nathan Mazurek, Chairman and Chief Executive Officer, Walter Michalec, Chief Financial Officer, and Geo Murickan, President of Pioneer eMobility.
Brett Maas: Following this discussion, there'll be a Q&A session open to participants on the call. We appreciate the opportunity to review the first quarter financial results and recent business highlights.
Brett Maas: Before we get started, let me remind you this call is being recorded and webcast. During this call, management may make forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release issued last Thursday, May 15th, which applies to the content of the call.
Speaker Change: Call's being recorded and webcast. During this call management may make forward looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward looking statements contained in the earnings release issued last Thursday may 15th which applies to the content of the call.
Nathan Mazurek: I'd like to now turn the call over to Nathan Mazurek, Chairman and CEO. Nathan, please go ahead. Thank you, Brett. Good afternoon and thank you all for joining us today. We are off to a strong start in 2025 with first quarter revenue more than doubling to $6.7 million. This growth is a clear reflection of the accelerating demand for our on-site power solutions and continued penetration of vertical markets for these solutions. Q1 revenue indeed validates the significant investments we have made to develop and expand the scope of our e-boost solutions. The primary contributor to first quarter revenue was the initial completion of 10 e-boost units to one of the largest public school districts in the United States.
Speaker Change: Like to now turn the call over to Nathan Mazurek, Chairman and CEO Nathan. Please go ahead.
Nathan Mazurek: Thank you Brad good afternoon, and thank you all for joining US today, we are off to a strong start in 2025 with first quarter revenue more than doubling to $6 $7 million. This growth is a clear reflection of the accelerating demand for our onsite power solutions and continued penetration.
Nathan Mazurek: Tracing of vertical markets for these solutions Q1 revenue indeed validates the significant investments we have made to develop and expand the scope of our IPU solutions. The primary contributor to first quarter revenue was the initial completion.
Nathan Mazurek: <unk> E booths units to one of the largest public school districts in the United States. This order, which was announced in June of 'twenty 'twenty. Four is for a total of 25 E boost mobile power units in to charge. The school districts first 200 Electric school buses specifically this.
Nathan Mazurek: This order, which was announced in June of 2024, is for a total of 25 eBoost mobile power units to charge the school district's first 200 electric school buses. Specifically, this order was a landmark order for Pioneer and represents the largest RFP ever administered and awarded for a mobile EV charging system. The balance of the 25 units are scheduled to be completed and delivered in the current quarter. The project was awarded after a short and intense competitive bidding process. At the time, we made the strategic decision to compete for the project at a highly competitive price in order to secure a marquee customer and prove the value of our technology at scale.
Nathan Mazurek: Order was a landmark order for pioneer and represents the largest RFP ever administered and awarded for a mobile E B charging system the.
Nathan Mazurek: The balance of the 25 units are scheduled to be completed and deliberate in the current quarter the.
Nathan Mazurek: The project was awarded after short in an intense competitive bidding process at the time, we made the strategic decision to compete for the project at a highly competitive price in order to secure a marquee customer and prove the value of our technology.
Nathan Mazurek: Scale.
Nathan Mazurek: As a result, our gross margins in Q1 reflected the early cost dynamic. of such a large and complicated project. The first units that we developed and produced carried higher costs as we refined our processes and optimized production workflows. As we continue to execute on this order, we see improved efficiencies and benefits. We remain confident that the succeeding units will result in a better gross margin contribution for Pioneer in Q2. At the end of the first quarter, our total backlog was $23.2 million, an increase of 18% compared to the prior quarter. In addition to these current orders, our sales pipeline of potential new opportunities continues to expand.
Nathan Mazurek: As a result, our gross margins in Q1 reflected the early cost dynamic.
Nathan Mazurek: That's such a large and complicated projects. The first units that we developed and produced carried higher cost as we refined our processes and optimize production workflows as we continued to execute on this order, we see improved efficiencies and benefits we remain confident that the succeeding units.
Nathan Mazurek: This will result in a better gross margin and better gross margin contribution from pioneer in Q2.
Nathan Mazurek: At the end of the first quarter, our total backlog was $23 $2 million, an increase of 18% compared to the prior quarter. In addition to these current orders or sales pipeline of potential new opportunities continues to expand we are in active discussions with dozens.
Nathan Mazurek: We are in active discussions with dozens of municipalities, transit authorities, shipping ports, and with several major national package delivery providers whom have already committed to a multi-year electrical vehicle phasing in with the ultimate objective of 100% fleet electrification. In most instances, these delivery operators have already made the decision to transition to an all-electric fleet, but lack the requisite charging infrastructure. eBoost offers an off-grid, immediately deployable mobile solution that does not rely on extensive permitting, grid upgrades, or long lead times.
Nathan Mazurek: Municipalities Transit authority shipping ports and with several major national package delivery providers, who have already committed to a multiyear electrical vehicle phasing in with the ultimate objective of 100% fleet electrification.
Nathan Mazurek: In most instances these delivery operators have already made the decision to transition to an all electric fleet, but lack the requisite charging infrastructure.
Nathan Mazurek: <unk> offers an off grid immediately deployable mobile solution that does not rely on extensive permitting grid upgrades for long lead times.
Nathan Mazurek: Beyond our core eBoost charging platform, we have developed a residential slash light commercial power system announced in March of 2024, tentatively named HomeBoost. This new platform is a game-changing power solution that will revolutionize the way homeowners and small facility owners address energy resilience and fast charging. This cutting-edge product integrates a prime-rated natural gas engine with optional DC fast charging, providing the facility owner with the ability to generate, at their option, 100% of their energy and charging needs, 24 hours a day. With its exceptional efficiency, compact and futuristic design, HomeBoost is perfectly positioned to meet the evolving and ever-increasing power demand from the residential and light commercial energy markets.
Nathan Mazurek: Beyond our core E boost charging platform, we have developed a residential.
Nathan Mazurek: Slash light commercial power system announced in March of 'twenty, 'twenty, four tentatively named home boost.
Nathan Mazurek: This new platform is a game changing power solution that will revolutionize the way homeowners and small facility owners address energy resilience and fast charging.
Nathan Mazurek: This cutting edge product integrates a prime rated natural gas engine with optional D. C fast charging providing the facility owner with the ability to generate at their option, 100% of their energy and charging needs 24.
Nathan Mazurek: Our hours a day.
Nathan Mazurek: With its exceptional efficiency compact and futuristic design home boost is perfectly positioned to meet the evolving an ever increasing power demand from the residential and light commercial energy market.
Nathan Mazurek: We are essentially providing the large home and the facility owner with a private power plant to operate independent of their grid connection or in tandem with such connection. Our confidence is burnished by the enthusiastic reception we've already seen from potential customers and channel partners. And additionally, in the residential sector and additionally the light commercial market from medical-related businesses like MRI, dialysis, cataract-type centers to commercial bakeries and cement producers, where power needs and fast EV charging are critical.
Nathan Mazurek: We are essentially providing the large home and the facility owner with a private power plant to operate independent of their grid connection or in tandem with such connection.
Nathan Mazurek: Our confidence is burnished by the enthusiastic reception, we've already seen from potential customers.
And channel partners and Additionally are in.
Nathan Mazurek: In the residential sector and additionally, the light commercial market from medical related businesses like MRI dialysis cataract type centers to commercial bakeries in cement producers, where power needs and fast E. B charging are critical and increased and reliable grid power availability.
Nathan Mazurek: An increased and reliable grid power availability is somewhat restricted. As we prepare for a dynamic launch in the second half of this year, we're confident that Homeboost will be a major driver of growth and innovation for our company in 2026 and beyond.
Nathan Mazurek: He is somewhat restricted as we prepare for a dynamic launch in the second half of this year, we're confident that home boost will be a major driver of growth and innovation for our company in 2026 and beyond.
Walter Michalec: With that, I will turn the call over to Walter. Thank you, Nathan, and good afternoon, everyone. Please be advised that we have included a non-GAAP financial measure of operating loss from continuing operation. which includes corporate overhead expenses, research and development costs, and non-recurring professional We refer to our press release issued on Thursday, May 15th, for further information, including a reconciliation between GAAP and non-GAAP financial measures. Press release can be found on our website at www.pioneerpowersolution.com slash investors slash news. Such non-GAAP measures should not be used as a substitute or alternative to any measure of financial performance calculated and presented in accordance with U.S.
Walter Mechanic: With that I will turn the call over to Walter.
Walter Mechanic: Thank you Nathan and good afternoon, everyone.
Please be advised that we have included a non-GAAP financial measure of operating loss from continuing operations, which is which excludes corporate overhead expenses research and development costs and nonrecurring professional fees.
Walter Mechanic: Please refer to our press release issued on Thursday may 15th for further information, including a reconciliation between GAAP and non-GAAP financial measures.
Walter Mechanic: The press release can be found on our website at www Dot pioneer power solutions Dot com slash investors Slash news.
Speaker Change: Such non-GAAP measures should be used should or should not be used as a substitute or alternative to any measure of financial performance calculated and presented in accordance with U S. GAAP.
Walter Michalec: GAAP. Instead, we believe this non-GAAP measure should be used to supplement our financial measures derived in accordance with U.S. GAAP in order to provide a more complete understanding of the trends affecting the business. First quarter revenue was $6.7 million compared to $3.3 million in the year ago quarter. An increase of 103%. The increase was primarily due to a significant increase in sales and rentals of our suite of mobile EV charging solutions. First quarter gross profit was $148,000, or a gross margin of approximately 2%, compared to gross profit of $535,000, or a 16% gross margin in the first quarter of last year.
Speaker Change: Instead, we believe that non-GAAP measures should be used to supplement our financial measures derived in accordance with U S. GAAP in order to provide a more complete understanding of the trends affecting the business.
Speaker Change: First quarter revenue was $6 7 million.
Speaker Change: Paired to $3 3 million in a year ago quarter and.
Speaker Change: An increase of 103% the.
Speaker Change: The increase was primarily due to a significant increase in sales and rentals of our suite of mobile EV charging solutions egos.
Speaker Change: First quarter gross profit was 148 out or a gross margin of approximately 2% compared to gross profit of 535000 or 16% gross margin in the first quarter of last year.
Walter Michalec: The decrease is primarily due to what Nathan alluded to earlier regarding the completion of the initial 10 units from the large 25 unit order we received in June of 2024. The first unit that we deployed and produced carried higher costs as we refined our processes and optimized production work. As we continue to execute on this order, we will see improved production efficiency. We remain confident that the remaining units will result in more positive gross margin contributions for Pioneer. During the first quarter of 2025, Pioneer incurred an operating loss from continuing operations of $2.3 million. compared to an operating loss in continuing operations of $1.7 million in the first quarter of last year.
Speaker Change: The decrease is primarily due to what Nathan eluded too earlier regarding the completion of the initial 10 units from the large 25 unit order we received in June of 2024.
The first units that we deployed them produced carried higher costs.
Speaker Change: We refined our processes and optimize.
Speaker Change: Production workflows.
Speaker Change: As we continue to execute on this order, we will see improved production efficiencies.
Speaker Change: We remain confident that the remaining units will result in more positive gross margin contributions for pioneer.
Speaker Change: During the first quarter of 2025 pioneer incurred an operating loss from continuing operations of $2 3 million.
Speaker Change: Compared to an operating loss from continuing operations of $1 7 million in the first quarter of last year.
Walter Michalec: The variance was primarily due to the decrease in our gross profit and an increase in selling general and administrative. During the first quarter of 2025, Pioneer generated a non-gap operating loss from continuing operations of $989,000. which again excludes corporate overhead expenses, R&D expense, and non-recurring professional costs. as compared to a non-GAP operating loss from continuing operations of $319,000 for the same quarter in 2008. Net loss from continuing operations for the first quarter of 2025 was $2.1 million compared to a net loss from continuing operations of $1.7 million during the first quarter of 2024. taking a look at our balance As of March 31, 2025, we had cash on hand of $25.8 million.
Speaker Change: The variance was primarily due to the decrease in our gross profit and an increase in selling general and administrative expense.
Speaker Change: During the first quarter of 2025 pioneer generated a non-GAAP operating loss from continuing operations of 989000.
Speaker Change: Which again excludes corporate overhead expenses R&D expense and nonrecurring professional fees as compared to a non-GAAP operating loss from continuing operations of 319000 for the same quarter in 2024.
Speaker Change: Net loss from continuing operations for the first quarter of 2025 was $2 1 million compared to a net loss from continuing operations of $1 7 million during the first quarter of 2024.
Taking a look at our balance sheet.
Speaker Change: As of March 31, 2025, we had cash on hand of $25 8 million.
Walter Michalec: Zero bank debt and working capital of $26.2 million. compared to $41.6 million of cash on hand, zero bank debt, and working capital of $26.7 million as of December 31, 2024. The cash on hand as of March 31st, 2025 represents cash per share of approximately $2.32.
Speaker Change: Zero bank debt and working capital of $26 2 million.
Speaker Change: Compared to $41 6 million of cash on hand zero bank debt and working capital of $26 7 million as of December 31st 2024.
Speaker Change: The cash on hand as of March 31, 2025 represents cash per share of approximately $2 32 sets.
Walter Michalec: The decrease in our cash on hand during the first quarter is primarily due to the payment of a one-time Special Cash Dividend of an aggregate of $16.7 million on January 7, 2012.
Speaker Change: The decrease in our cash on hand during the first quarter. This is primarily due to the payment of a one time special cash dividend of an aggregate of $16 7 million January seven 2020.
Walter Michalec: Today, we are reaffirming our guidance for revenue of $27 million to $29 million for the full year of 2025.
Speaker Change: Today, we are reaffirming our guidance for revenue of 27 million to $29 million for the full year of 2025.
Walter Michalec: This concludes my remarks.
Speaker Change: This concludes my remarks, I will now turn the call back over to Nathan for any questions.
Walter Michalec: I will now turn the call back over to Nathan for any questions.
Operator: Operator, you can open the lines for questions, if you would. Great, thank you.
Speaker Change: Operator, you can open the open the lines for questions.
Speaker Change: If you will.
Speaker Change: Great. Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your why isn't the question Kim let.
Operator: We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question and answer session. You may press star 2 to remove yourself.
Speaker Change: You May press Star two if you remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the One moment please, we have a poll for questions.
Speaker Change: One moment, please pool for questions.
Rob Brown: First question is from Rob Brown from Lake Street Capital Markets. Please go ahead. Good afternoon. Good afternoon, Rob. On the margin in the quarter, I understand the startup kind of margin issue, how do you see margins recovering? Yeah, so I mean, you know, the last quarter was more indicative of where, you know, that's what we shoot for. And that's what we get, you know, the on the especially the eBoost product, it's a super high value integrated, special product on this particular job. When you start and it's on it's on me at the end, you know, when you start with a lower with a lower sales price, you know, that's it's it's yet you know, only perfect execution will give you any kind of good contribution, you know, less than perfect execution, you know, starts to hurt worse.
Rob Brown: First question is from Rob Brown from Lake Street Capital markets. Please go ahead.
Speaker Change: Okay.
Speaker Change: Good afternoon.
Speaker Change: Yeah, good afternoon, Rob.
Speaker Change: On the margin in the quarter I understand the startup kind of margin issue. How do you see margins recovering and is this sort of goes forward, where do you where do you think you can get the margins to for this product line.
Speaker Change: Yeah. So I mean, you know that the last quarter was more indicative of where you know that's what we shoot for and that's what we get.
Speaker Change: On the especially on the boost product that's a super high value integrated special product on this particular job when you start and it's on it's on me at the end you know when you start with a lower with a lower sales price that's it it.
Speaker Change: The only perfect execution will give you any kind of good contribution you know less than perfect execution, you know starts to hurt worse. So I think that the second half of the year with the where we're not so overwhelmed by all these units you know 25 units. There's a lot I don't know if any are there are.
Nathan Mazurek: So, I think that the second half of the year, where we're not so overwhelmed by all these units, you know, 25 units is a lot. I don't know of any other RFP, I don't know of any other award that size for this type of a system. They've recovered already, you know, for the second quarter, they're not going to be the outsized or outstanding margins that we produced in the fourth quarter, but at least they'll be making better contributions. And as the other products in the third quarter, and the other projects, really.
Speaker Change: Yeah, I don't know of any other award that size for this type of the system. They've recovered already you know for the second quarter theyre not going to be the outsized or outstanding margins that we produced in the fourth quarter, but at least they'll be making a better contributions and as the other products in the third quarter and for the other.
Speaker Change: <unk> really.
Nathan Mazurek: Same product, but the other the other jobs that we're doing come through in the third and fourth quarter So the margin should recover to something similar to the fourth of last year Okay, great Great explanation. Thank you. And then on the, I guess, eBoost pipeline in particular, I think you said dozens of quotes and activity, but how do you, how do you kind of characterize that? And is that really building for 2026? Yeah, probably by the end of June, you know, that's it's a little bit arbitrary, but something like that, you know, then we're really just talking about 26 afterwards, you know, of course, there are exceptions, you know, we happen to have everything in stock, then it's, it's on the smaller size, and so forth, less, less customization, and so forth, and so on.
Speaker Change: Same product, but the other the other jobs that we're doing come through in the third and fourth quarter. So the margins should recover to something similar to the fourth of last year.
Speaker Change: Okay great.
Speaker Change: Great explanation. Thank you and then on the I.
Speaker Change: I guess he booth pipeline in particular, I think you said dozens of kind of quotes and activity, but how do you. How do you kind of characterize that as these come in that really building for 2026 revenue.
Speaker Change: And when do you sort of need to close those two to get into 26, okay.
Speaker Change: Yeah, probably by the end of June you know, that's it's a little bit arbitrary, but something like that you know then we're really just talking about twenty-six afterwards of course there are exceptions. You know we we happened to have everything in stock then it's it's on the smaller size and so forth less less customization.
Speaker Change: And then and so forth and so on but those also don't produce the same revenue that the larger units.
Nathan Mazurek: But those also don't produce the same revenue that the larger units do. So the end of June is kind of a reasonable cutoff. After that, everything is 26 or 8. And then Homeboost, I think you talked about a fair amount of progress on the channel and the product interest, but how's the pipeline shaping up there and are you... are still launching in the back half. Yeah, it's still launching the back half, you know, we just and it's all on me too. We, you know, redesigned its look, its mechanical fit and form, its colors, even internally did a lot to eliminate the excessive cost that we think we could do without, you know, at the same time, it's a premium product.
Speaker Change: So the end of June is kind of.
Speaker Change: A reasonable cut off there after that everything is twenty-six oriented.
Speaker Change: Okay. Good.
Speaker Change: Home boost.
Speaker Change: I think you talked about a fair amount of progress on the channel and the product interests, but how.
Speaker Change: How's the pipeline shaping up there and in our U.
Speaker Change: Are you able.
Speaker Change: Are you able to risk corridor centers that products still are still watching in the back half and that's when you'll start to see the order yeah. It's still launching the back half you know we we just then it's all on me two we route you know redesigned its look its mechanical fit form.
Speaker Change: Its colors, even internally did a lot to eliminate our excessive cost there that we think we could do without you know at the same time, it's a it's a premium product. So we wanted to to really be that premium product and that just didn't look but in funk.
Nathan Mazurek: So we wanted to, to really be that premium product, not just in look, but in function for the user. So I think we're, we're essentially complete. And we're, we're pushing internally, everybody is gearing up for a very, very strong and dynamic launch second half of the year.
Speaker Change: <unk>.
Speaker Change: For the user so I think where we're essentially complete.
Speaker Change: And where we're pushing internally everybody is gearing up for a very very strong and dynamic launch second half of the year as we've said.
Nathan Mazurek: As we've said, on other calls, but it bears repeating, we're not a home boost doesn't factor into any of the guidance that we gave for 25. We're hoping to be successful from an order rate in the second half of 25 only with delivery into 26. So none of the guidance is impacted by its rollout for 25.
Speaker Change: On other calls, but it bears repeating weird none are home boost doesn't factor into any of the guidance that we gave for 25.
Speaker Change: We're hoping to be successful from an order rate.
Speaker Change: In the second half of 'twenty, five only with delivery into 26, so none of the guidance is impacted.
Speaker Change: By its rollout for 25.
Rob Brown: Great.
Rob Brown: Okay, great. Congratulations on all the progress I'll turn it over thank you Rob.
Rob Brown: Congratulations on all the progress. Thank you, Rob.
Operator: As a reminder, if you'd like to ask a question, it is star one.
Speaker Change: As a reminder, if you'd like to ask a question. It is star one.
Resto Vakosky: Next question here is from Resto Vakosky, a private investor, please go ahead. Good afternoon and thanks for taking my question. My questions were, of course, about the margins, and you answered those, and thanks for that. About Homeboost, would you... Would that be suitable for people with solar panels, for them to be able to completely disconnect from the grid? If they chose to do that, whether they have solar panels or not, they would be able to go on island mode, you know, they'd be able to disconnect if that's what they wanted to do. It has the logic and the control to move loads back and forth between this unit and the utility feed that the person might be getting, but if they wanted to go on to island mode, yes, they can go off the grid completely, as long as they have a natural gas connection.
Speaker Change: Next question here is from a restaurant like housekeeping a private investor. Please go ahead.
Speaker Change: Good afternoon, and thanks for taking my question.
Speaker Change: But my question is of course about the modules you off for dogs and cats, but.
Speaker Change: Above home Chromebooks are with you.
Speaker Change: Well that would be suitable for people with.
Speaker Change: With total puzzle for them to be able to completely disconnect from the grid.
Speaker Change: If they chose to do that whether they have solar panels or not.
Speaker Change: Be able to go on an island mode, you know they'd be able to disconnect. If that's what they wanted to do.
Speaker Change: It has it has logic has it has the logic and the control to move.
Speaker Change: Move loads back and forth between this unit and N. The utility feed that the person might be getting but if they wanted to go onto the island mode. Yes. They can they can go off the grid completely as long as they have in natural gas our connection.
Nathan Mazurek: But would it be able to kind of do the, I guess, the variable production that's required for solar panels, you know, the fact that solar panels will kind of drop off in the evenings and so on. Would it be able to intermittently start and stop? It can't intermittently start and stop yet.
Speaker Change: Uh-huh, but would you be able to kind of do the.
Speaker Change: I guess the variable Oh, the valuable production that's required for Corso. Upon those you know the fact that so upon those little kind of drop off in the evenings and so on.
Uh huh.
Speaker Change: Will it be able to intermittently start and stop.
Speaker Change: It can't intermittently start and stop yes.
Resto Vakosky: All right. and uh...
Speaker Change: Alright.
Speaker Change: And.
Speaker Change: Oh I wanted to ask you and this is a lot of humans have been Kevin by investors about your company.
Nathan Mazurek: I wanted to ask you on this... One may say that e-boost is kind of like a temporary solution for people that cannot yet connect to the grid and that nobody moves to electric just so they can generate electricity through a propane engine. How do you view this? How long will this market last? I mean, I know you're doing great right now. Do you have legs? Yeah, so that's a good that is the you know, the ultimate question. So You know, there's two parts to it. One is that this grid gap or this this period of time, which people three years ago thought wouldn't be more than three years is is going into, you know, I can't see it stopping for the next five years, it just keeps growing.
Speaker Change: Bit of a Devil's advocate.
Speaker Change: And does that.
Speaker Change: Uh huh.
Speaker Change: One may say that you oh that equals who's kind of like a temporary solution for people to get to know what you have to connect to the grid.
Speaker Change: But nobody moves toward like today, just so that can generate electricity through a propane engine.
Speaker Change:
Speaker Change: How do you view this like how long would this market last I mean, I know you're doing right now does it have legs yeah.
Speaker Change: So that's a that's a good that is the you know the ultimate question. So.
Speaker Change:
Speaker Change: You know there's two parts to it one is that this grid gap or this this period of time, which people three years ago. So it wouldn't be more than three years as is going into you know I I can't see it stopping for the next five years it just keeps growing.
Speaker Change: Because of the difficulty Ah that businesses are having and getting in and getting these kinds of connections are they've also seen the value as more as we put more units out there more school districts more municipalities. They see the value in and the Optionality of am.
Nathan Mazurek: Because of the difficulty that businesses are having and getting and getting these kinds of connections. They've also seen the value as more as we put more units out there. More school districts, more municipalities, they see the the value to and the optionality of mobility. And they look at it is that, you know, why am I spending all this money on fixed infrastructure when I can have a mobile solution for essentially the same price, and then have the optionality of moving it, not moving it, if I lease the facility, I can still take it with me, and things like that.
Speaker Change: Mobility.
Speaker Change: And they look at it is that you know why am I spending all this money in fixed infrastructure, we're not gonna have a mobile solution for essentially the same price and then have the optionality of moving or not moving it if I at least the facility I can still take it with me and things like that in addition is even if somebody.
Speaker Change: Can get a connection and that's what the school district that we're delivering right now their issue and they are a major city and you would think that the utility is.
Speaker Change: Is kowtowing to a to a major one of our country's largest cities is that they can't get enough power, even if they had a connection they don't want to just trickled charged their buses then theyre, having buses sit for 40 hours to recharge themselves that's not a tenable that's not a.
Speaker Change: <unk> for them their utilization rate plummets, so for them to fast charge as many buses as they wanted as quickly as they can in the case of this particular system Theyre doing eight buses at a time, we had eight chargers hanging off hanging off the trailer with R. R.
Resto Vakosky: So for them to fast charge as many buses as they want as quickly as they can, in the case of this particular system, they're doing eight buses at a time, we have eight chargers hanging off, hanging off the trailer, with our really large unit producing power on a mobile off-grid way, so they're not beholden to the utility at all. Okay, yeah, that does answer it, and just to be clear, I think I know the answer to that, but I want you on the record, I mean, even if they do, you know, have your solution that does...
Speaker Change: Really large unit producing power on a mobile off grid way, so they're not beholden to.
Speaker Change: Two the utility at all I don't know if that answers it for you, but that's that's the reality that we're finding.
Speaker Change: Okay. Yeah, that's that does answer it and just to be clear I think adult you also Tibet.
Speaker Change: You want to answer that because.
Speaker Change: I mean, even even if they do have your solution that does it.
Nathan Mazurek: have an internal combustion engine, there's still significant savings compared to diesel, right? I mean, natural gas is just cheaper in terms of energy per dollar. I want to say never, rarely. We never get it compared to diesel, really. It's compared to if we had a connection to the grid, what would it be, and this is still much cheaper. Gas is producing your own power on-site, there's no transmission charges, there's no delivery charge of the power. It is, for sure, cheaper. Those that are coming up with this solution, diesel defeats any kind of purpose, meaning if I spent the money to have an electric bus or a van to reduce emissions, it's kind of optically and realistically a little hypocritical to use diesel to charge it.
Speaker Change: We have an internal combustion engine, there's still significant savings compared to diesel right I mean natural Godfrey just cheap funding.
Speaker Change: In terms of energy.
Speaker Change: Cause all of them.
Speaker Change: I you know its we never say never because it rarely would never get it compared to diesel really the you know it's compared to what if we had it in there if we had a connection to the grid what would it be and this is still much cheaper gasses is producing your own power on site I mean, there's no transmission Cha.
Speaker Change: There's no delivery charge you know of the power is for shorts cheaper those that are that are coming up with this solution. You know diesel defeats any kind of purpose I E. Meaning if I spent the money to have an electric bus or a van to reduce emissions. It's kind of you know optically and realistic.
Speaker Change: We are a little hypocritical to use diesel to charge it well what I meant is that it's cheaper than diesel.
Nathan Mazurek: What I meant is that it's cheaper than having diesel trucks and putting diesel in the trucks. It's cheaper than having diesel trucks, that's correct, by far. Diesel and diesel buses and so on. Correct. You are 100% correct. Yes.
Speaker Change: Diesel trucks and put them in the cheaper than having diesel trucks, that's correct by far.
Speaker Change: Diesel and diesel buses and so correct. Yeah correct you are 100% correct, yes. Thank you for Mike.
Resto Vakosky: Thank you for clarifying.
Speaker Change: You've you've also told my questions and good luck.
Resto Vakosky: You've answered all my questions, and good luck. Thank you.
Speaker Change: Thank you.
Howard Root: Next question is from Howard Root, a private investor. Please go ahead. Good afternoon, and congrats on the excellent progress. I have two questions. One is on the distribution network. I mean, to me, it's impressive on these large orders you've gotten so quickly out of the box with a new product. It means that you've got credibility established. And your distribution, it seems like it's multilayered with distributors and other people outside the company working with it.
Howard Root: Next question is from Howard root a private investor. Please go ahead.
Howard Root: Good afternoon, and congrats on the excellent progress.
Howard Root: And if you have two two.
Howard Root: Two questions.
Howard Root: One is on the distribution network.
Howard Root: To me it's impressive on these large orders you've gotten so quickly out of the box with a new product.
Howard Root: It means that you've got credibility established in <unk>.
Your distribution if it seems like its multi layered with distributors and and other people outside the company working with it can you talk a little bit about how you see that growing and how you see that changing when you get that home E boost or the home boost out there as well.
Nathan Mazurek: Can you talk a little bit about how you see that growing and how you see that changing when you get the home eBoost or the home boost out there as well? On the home thing, that's a little bit of a work in progress. You know, I have some ideas. Our team has some ideas of how best. We've sort of already tested the product from a marketing point of view with these. different types of, I don't want to reveal too much, distributors and dealers within that industry. But I think like the original Home Boost product, the market is going to move us and shift us in ways that I can't anticipate right now from a distribution point.
Howard Root: Yeah. So thank you Howard that's that that's true I mean, we we evolved as well I mean, it's and I don't want to say, it's impossible, but it's close to impossible for us to cover everything with our sales force. So you know we would never see the city of X on our own. We just don't have enough personnel out there. So we use a lot of channel partners slash.
Howard Root: Tributaries that act as the feet on the street, we do a lot of things directly as well when it comes specifically to municipalities and states and things like that we use a variety of distributor is sometimes it's the bus dealers the truck dealers themselves with corporate.
Howard Root: It's approval and confidence and what and the solutions that they're offering it helps them move more electric trucks and buses.
Howard Root: In the case of the Investor owned businesses that so far to date, a more direct approach.
Howard Root: Yeah, we need probably we have some intermediaries, we need more intermediaries and channel partners who are doing.
Howard Root: I don't even know if there's a real name for what Theyre doing energy development, there or things like that charging development integrators, one stop solutions turnkey people and so forth, we need more of them because it's impossible I mean, unless we hire 100.
Howard Root: People you know to work all day, all night, we can't see everything.
Howard Root: On the whole thing that's that's a little bit of a work in progress you know I have some ideas. Our team has some ideas of how best.
Howard Root: We've sort of already tested the product from a marketing point of view with these <unk>.
Howard Root: Different types of I don't want to reveal too much distributors and dealers within that industry, but I think like the original home boost product the market is going to move us in shift us in in ways that I can't anticipate right now from a distribution point of view.
Nathan Mazurek: Okay, thanks. That's helpful.
Speaker Change: Okay. Thanks, that's helpful and then my.
Howard Root: Then my second question is kind of looking into 2026, and I know it's early, and you guys got a lot of stuff on your plate, but as you look, you've got this, you know, rapidly growing eBoost product line out there, and then you're adding something that I would say has even more potential with HomeBoost, and you've got pinch points all along the process from manufacturing, management time, marketing sales, all of that. How do you see, you know, your focus in 2026? How big do you see HomeBoost being as a percentage of your attention or percentage of your kind of your push in next year's efforts?
Speaker Change: Second question is kind of looking into 2026 and I know, it's early and you guys got a lot of stuff on your plate.
Speaker Change: As you look you've got this <unk>.
Speaker Change: Rapid Lee growing E boost product line out there and then you're adding something that I would say has even more potential with home boost and you've got pinch points all along the process from manufacturing management time marketing sales all of that how do you see.
Speaker Change: Your focus in 2020 states, how how big do you see home boosting as a.
Speaker Change: Percentage of your attention or percentage of your kind of your.
Speaker Change: Your your push in next year's efforts yeah. So that that's a great question, we were struggling with that all the time, so just to take some of it off the table, we've already because home boost will only be in call. It in our minds you know I think again, it's arbitrary four versions of it.
Nathan Mazurek: Yeah, so that's a great question. We're struggling with that all the time. So just to take some of it off the table, we've already, because Home Boost will only be in, call it, in our minds, you know, and again, it's arbitrary, four versions of it. So it's a much more standard product than we're used to on the traditional eBoost side. So we've already contracted sort of with another manufacturer close to us to make these for us initially at size and scale without duplicating, because otherwise then we're just adding, you know, capital expenditures and so forth and so on.
Speaker Change: So it's a much more standard product than we're used to on the on the traditional eboue side. So we've already contracted sort of width with another manufacturer close to us to make these for us initially at size and scale without duplicating.
Speaker Change: Cause otherwise them, we're just adding on capital expenditures and so forth and so on so that's kind of a little bit off the table, which is helpful to us at price points that we think are favorable for everybody.
Nathan Mazurek: So that's kind of a little bit off the table, which is helpful to us at price points that we think are favorable for everybody to be able to bring this product out to market so we can really concentrate on the design engineering and the marketing and selling of this particular product. As far as management time, I would say that, you know, really starting now, it's occupying for me, for Walter, for Geo Murickan, it's occupying probably 50% of our mind space, because we believe the same thing that you just highlighted. We believe it could be a far larger, even more profitable product for us.
Speaker Change: To be able to bring this product out to market. So we can really concentrate on the under design engineering and the and the marketing and selling of this particular product as far as management time I would say that are you know really starting now it's occupying for me for Walter for Jill Merrick in.
Speaker Change: It's occupying probably 50% of our mind space because we believe the same thing that you just highlighted we believe it could be a far larger even more profitable product for us. So we're we're very excited but you know the proof is always in the pudding. So we got to do the work.
Howard Root: So we're very excited. But, you know, the proof is always in the pudding. So we've got to do the work. Great, thank you and I appreciate you taking my question. Thanks. Of course.
Speaker Change: Great. Thank you and I appreciate you taking my question. Thanks of course.
Operator: This concludes the question and answer session.
Speaker Change: This concludes the question and answer session I'd like to turn the floor back to management for any closing comments.
Brett Maas: I'd like to turn the floor back to management for any closing Thank you all for joining. Thank you all for your support, and we look forward to updating you all on our next earnings call. Thank you.
Speaker Change: Thank you all for joining thank you all for your support and we look forward to updating you all on our next earnings call. Thank you.
Speaker Change: Yeah.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.
Speaker Change: Yeah.
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Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Mhm.
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Speaker Change: Yeah.
Speaker Change: Hello.