Q2 2025 Expion360 Inc Earnings Call
Greetings, and welcome to the XP on 3602 Quarter 2025 Financial Results Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded and will be available on the company's investor relations website at investors.com.
Current belief and expectations, they are subject to risks and uncertainties that could cause actual results to differ materially. The company has explained, some of these risks and uncertainties in its SEC filings, including the risk factor section of its annual report on form 10K. You are cautioned not to place undue Reliance on these forward-looking statements which reflect our expectations, as of the date. Of this presentation except is required by law or the NASDAQ listing standards the company expressly disclaims, any intent or obligation to publicly update, or revise, any forward-looking statements your host today, Brian, Schaffner chief, executive officer, and interim, Chief Financial Officer will present the company's results of operations as of, and for the second quarter and the June 30th 2025, a press release detailing. These results cross the wire this afternoon at 405 p.m. eastern time and is available at investors.gov. At this time, I will turn the call over to Brian.
Uh, thank you, Ariel, and good afternoon, everyone.
I am pleased to welcome you to today's second quarter, 2025 Financial results conference call.
I'd like to start by giving a brief overview of who we are, and what we do.
Exbon 360 is focused on creating energy storage solutions, for our customers utilizing our core values of safety, through third-party testing and UL certification quality offering an industry-leading 12-year warranty and service. Providing customer support for the entire energy storage system. Purchased from us, not just the X Beyond 360 built components.
Xion. 360 designs assembles and sells lithium iron phosphate or lifepo4 batteries and supporting accessories for RV, Marine light, electric vehicle, and home energy storage applications.
We believe that our product offerings include some of the most energy dense and minimal footprint batteries available, and we are deploying multiple intellectual property, strategies, Advanced research and development capabilities, and Innovative products to sustain and scale our business.
Our customers include dealers, wholesalers.
Private label customers and original equipment manufacturers or oems who are driving revenue and brand awareness nationally and we complement our wholesale Channel with direct to Consumer sales.
Our management team and board members are experienced across engineering technology and finance, we believe the combination of these factors positions us to execute our long-term growth strategies.
The second quarter included two of our most successful months of sales in company history.
Marking our sixth consecutive quarter of sequential revenue growth and sustained momentum.
Your RV retailers and Distributors including Camping World.
KZ recreational vehicles, a subsidiary of Thor Industries and Meyer, Distributing Inc.
We continue to work towards additional OEM Market penetration with new major Partners. Including
Scout Campers and Alaskan Campers. We believe we have a strong reputation in the lithium battery space, and we can plan to continue leveraging that to broaden our distribution channels.
To highlight some of our operational accomplishments and milestones in the second quarter, we have advanced our Home Energy Storage Solutions (HESS) vertical, with shipments beginning in January 2025.
We believe the health product line will benefit from a fast growing battery, energy, storage market and consumer update, can rapidly scale with the introduction of products like hes to improve price, flexibility and integration.
We are exploring opportunities to expand Hess into the AI data center storage and backup market.
We are actively pursuing a tariff exclusion request in working with our resources in Washington DC to minimize potential impacts on our business and growth.
We implemented both short- and long-term mitigation strategies, including building 6 to 12 months of inventory ahead of the tariff changes.
Reducing our costs in the current battery line, and divers, diversifying our supply sources.
Longer term, our goal is to onshore manufacturing of key components such as BMS cells, communications, and cases. This would reduce tariff exposure and allow us to pursue opportunities in the government and defense space.
Our reputation for quality in the recreational and LEV markets is the driving force behind our development of Home Energy Solutions, which we expect will be the foundation for our future growth.
As mentioned, we pride ourselves on servicing the entire system sold to a customer, not just the battery. We are also a master Victron distributor.
We believe we have strategically positioned our battery portfolio across the five markets we serve, each of which I will touch on.
The RV market is recovering with healthy momentum driven by interest in outdoor activities and demand for vehicles that depend on batteries to power their systems.
Our lithium batteries support RV systems and appliances while replacing noisy generators for off-grid power. They can be charged by the engine or by solar.
Our Edge battery, which is now commercially available, features a custom form factor incorporating our patent-pending innovations and recently developed IP, including VHC heating technology, Smart Talk Bluetooth, and Canvas Communications. We began shipping the Edge to customers in the third quarter of 2024.
Our Solutions are also employed in the Marine Market to support, trolling, motors and operating cabin Electronics.
The third established market we serve is the light electric vehicle market (LEV), such as golf carts, which are undergoing the transition from lead acid to lithium and require the power generation and reliability that our batteries can provide.
The fourth and newest market we serve is the home energy storage market, including both home and commercial solar power storage solutions. I'll expand on our opportunity in home energy shortly.
Finally, we see the industrial applications market as a future growth vertical for us, driven by demand for additional capabilities for electric forklifts and industrial material handling.
We are building a robust IP portfolio across all five of these markets, and we currently have 11 patents pending.
Now, I'll focus on our Market expansion within the e360, home energy storage solutions or hes.
With the introduction of our 2, lipo 4 battery solutions, to support home energy storage.
We are targeting home and small commercial solar, and users and installers. Who are interested? In a high-performance modular system with straightforward installation.
Despite increasing our market share during that period, we recognize that home energy represents a critical growth opportunity for our future.
Of our 2 existing home energy product options. 1 has received UL, 9540 certification. And the other is in final stages of UL approval. A requirement in states, such as require as California that require UL 9540 certification of the battery and inverter to qualify for tax credits.
Battery storage systems offer a way to capture Roi for a consumer outside of a traditional solar system utilizing the draw of power into the system during off peak hours and a discharge during peak hours.
Our Solutions provide scalability and versatility across Market channels, including solar installers electrical contractors residential and Commercial Builders and Energy service providers.
The view of our home Energy Solutions can be found on our website.
We think the home energy Market provides complimentary economics to our business model with an opportunity to generate recurring revenue streams. While enabling margin expansion in a market that is expected to suppress 123 billion globally by 2029. According to
Market data forecasts.
Supported by incentives such as California's Self-Generation Incentive Program and federal tax credits available through the Inflation Reduction Act.
We are using proceeds from our public offerings to provide necessary funding to further develop our new e360 home energy storage solutions, including finishing our UL testing and certification process, in addition to other requirements for various authorities having jurisdiction.
I will now discuss our second quarter, 2025 Financial results.
Revenue in the second quarter totaled, 3 million.
An increase of 134% from 1.3 million in the prior year period.
The increase in net sales is primarily attributable to sales growth in the RV market, along with accessory sales growth through integrator partners.
Gross profit totaled $0.6 million, or 21% of revenue, as compared to $0.3 million, or 25% of revenue in the prior year period. The decrease in gross margin percentage was primarily attributable to the product mix sold in the different periods.
Gross margin was affected by ongoing tariff uncertainty and a higher mix of lower-margin pass-through product sales. We mitigated some of this impact through early inventory builds, cost reductions in our battery line, and supply chain diversification to free trade countries such as South Korea.
Long-term our strategy includes onshoring manufacturing of key components.
Our selling and administrative expenses, were 2 million, which was flat compared to the prior year period. And a decrease, as a percentage of sales of 91 percentage points from 157% of sales, in the second quarter of 2024, to just 66% of sales in the second quarter of 2025,
The decrease was primarily due to the reduced costs of rent related expenses and offset by smaller increases in travel, expense research and development and other expenses.
Net loss in the second quarter told her 1.4 million a 38% improvement over a net loss of 2.2 million in the prior year period.
The decrease in net loss was primarily a result of a higher net sales for the period ending June 30th 2025 combined with our decreases in selling administrative and, and general expenses.
Turning to the first half 2025 results.
For the six months ended June 30, 2025, net sales totaled $5 million, a 124% increase from $2.2 million in the prior year period.
The increase in net sales was primarily attributable to sales growth in the RV market, along with accessory sales growth through our integrator partners.
% as a percentage of sales in the prior year period.
Again, the decrease in gross margin percentage was primarily attributable to the product mix sold in the different periods.
Selling General and administrative expenses for 6 months. Ending June 30 2025 decreased by 14% to 3.6 million compared to 4.2 million in the prior year, period and decreased as a percentage of sales by 1004 percentage points from 186% of sales, in the first half of 2024, to just 72% of sales in the first half of 2025,
The decrease was primarily due to decrease in salaries benefits rent and related expenses and legal and professional fees were slightly offset by an increase in research and development expenses.
That loss for 6 months ending June 30th 2025 totaled, 2.5 million a 43% improvement from a net loss of 4.4 million in the prior year period.
The decrease in net loss was primarily a result of higher net sales for the period. End of June, 3025 combined with decreases in selling administrative and general expenses.
Cash and cash equivalents totaled $7 million as of June 30, 2025, compared to $0.5 million as of December 31, 2024.
Net cash used in operating activities totaled $1.6 million for the six months ending June 30, 2025, compared to $3.4 million in the prior year period.
Receiving inventory. That was prepaid during the prior period, accounted for the majority of the change for the 6 months. Ended June, 3rd 2025.
In closing, we remain confident and enthusiastic about 2025, and Beyond with substantial, purchase orders already in hand and interest from new customers across our product line, including our next Generation. Gc2 group, 27 and Edge batteries. We look forward to additional milestones in the months ahead.
Our focus is on safety quality and service continues to resonate.
With our more than 300 customers nationwide.
Operationally, we have undertaken several initiatives to increase margins and reduce costs within the current line of batteries. We continue to work towards additional OEM Market penetration by continuing to add features including enhanced energy density and developing OEM Centric form factors to further our Market reach.
I thank you all for attending and now, I would like to hand the call over, to the operator, to open the line for questions.
Thank you.
To ask a question, you may press star then 1 on your touchtone phone, if you are using a speaker-phone please pick up your handset before pressing any keys. If at any time your question has been addressed and you would like to withdraw your question, please press star. Then to at this time we will pause momentarily to assemble our roster.
As there are currently no questions from the phone, I would like to turn the question and answer session over to Larry to take questions from the webcast.
Our first webcast question, asks,
current tariffs environment and lobbying efforts in Washington DC. It has anything developed
Yeah, that's a, that's a good question. Um obviously the
Tariff, finish line, for lack of a better term continues to be moved on a monthly basis. Um, we do feel confident with our lobbying efforts in in DC and we believe that we have our case for an exclusion, or an exception in front of the right people. But right now,
Now, we are, you know, continuing to benefit from the decisions that we made in September and October and November, when we, uh, you know, pre-loaded our inventory, for the next year.
Our next webcast question asks how much pre-built inventory is left for subsequent quarters?
Um,
That represents a majority of the what is left on? The inventory that we purchased in September and October and November. And so we are looking to, you know, actively replace that. Um, so that we can head into 2026
And our last webcast question asks: Does the China tariff cause health issues, or will you pass price increases to customers, or sell at lower margins?
Uh, I think that for us for the next quarter, what matters is our sales mix? Um as I alluded to before we had some accessory sales that uh went out at a little lower margin than uh we normally have on our our batteries and I would tend to think that our battery sales which is driving uh you know our Top Line, our battery sales is going to help us with a strong margin in the third quarter.
This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Schoenherr for any closing remarks.
Uh, thank you to everyone for attending today's call. We are excited about where we're headed and look forward to continuing to engage with our investors throughout the remainder of 2025. Just a note: if you are unable to answer, or if we were unable to answer any of your questions, please reach out to our IR firm, MZ Group; they would be more than happy to assist you. This concludes our call.
this concludes
Call, you may disconnect your lines. Thank you for participating, and have a pleasant day.