Q2 2025 Anaergia Inc Earnings Call

After the prepared remarks, we will host a question and answer session. If you would like to ask a question. Please raise your hand, if you have dialed into todays call. Please press star nine to raise your hand and star six ton mute. Your line I will now hand, the conference over to Darlene Web Investor Relations. Please go ahead.

Thank you very much operator, and good morning, everyone.

On today's call, we'll be discussing energy as earnings for the second quarter of 2025, which ended June 32025.

If you're following along with our slide deck, which is available here on our live streaming webcast or you can also access it directly from the investors section of our website.

My comments relate specifically to slides 123.

On slide two you'll see that on today's call I'm joined by Mr. S off on energy as Chief Executive Officer.

Mr. Greg well energy is chief financial Officer.

And Dr. <unk> Shearson energy as Chief operating officer.

Before beginning our formal remarks, we would like to refer you to slide three of the presentation.

Which contains a caution on forward looking information and a note on the use of non <unk> measures.

Listeners are reminded as always that today's discussion may contain forward looking statements that reflect current views with respect to future events.

Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in these forward looking statements.

Energy does not undertake to update any forward looking statements, except as may be required by applicable laws.

<unk> are urged to review the full discussion of risk factors in the company's prospectus as filed with Canadian Securities regulators.

And with that I'll turn the call over to Lasalle.

Thank you Darla and good morning, everyone.

Thank you for joining us here today.

Speaking to slide four.

We are now deep into our transformation other than just to point out and the results are starting to speak for themselves.

Over quarter year over year, we're seeing clear improvements momentum is building and the strategy we put in place is delivering.

<unk> talked about our five theaters operational efficiency capital sales geographic expansion strategic partnerships and a stronger balance sheet. This quarter, we made progress on each of these.

We are now on slide five.

Our project teams are delivering.

<unk> is being converted into revenue execution is picking up pace and our closing backlog is up 22% over Q1, and a significant 137% since year end.

Strong sign with customer demand and market confidence of both ROI.

And that confidence is weather in Europe, we extended our agreement with Ecmo has signed a multi product deal with complex in North America, we secured a significant change order on the East Coast reported these are well established partners coming to us for more business.

Must say something.

Inside of the business, we are sharper leaner and more disciplined.

Energy cost.

Any project controls and we are stay laser focused on profitable growth.

Moving to slide six.

As a result.

Longer company, a company that the starting of the quarter and build a real momentum.

Dewey markets to keep exactly what we offer.

So what do we offer.

And to end solutions global reach and proven results, we convert waste to fuel clean water and fertilizer and we do it at a commercial scale in complex environments for customers, who need us to deliver.

That includes customers with large projects small projects or portfolio.

And both.

Because our moldable scalable up or down across geographies and tailored to a real world conditions. This combination is rare in history.

Creating real opportunities for energy.

And just to point out is working where SKT smarter.

They are the right kind of work and we are building a platform to create lasting value for our customers.

Our partners and our shareholders.

I will now pass the call over to Greg who will walk you through the numbers and show you exactly how any geo strategy with Sterne <unk> good performance.

Rick.

Thank you Scott and good morning, everyone I'm now referring to slide seven and eight so let me take you through how our strategy is starting to translate into performance.

Revenue for the second quarter was $32 3 million, an increase of 36, 8% or $8 6 million compared to the same period in 2024.

And an increase of $7 4 million or 30% compared to the first quarter 2025.

This revenue growth was primarily driven by increased capital sale project execution in North America, and Italy, as well as higher service revenues and North America.

These gains were partially offset by lower group revenues at some facilities continue to ramp towards full production capacity.

Regionally revenue increased in North America, Italy, and the broader European region revenue in the Asia Pacific region declined slightly primarily due to decreased activity in the integrated waste management facility capital sale project in Singapore.

Yes.

Gross profit for the quarter was $10 5 million more than double last year's figure up 152, 9%.

This strong performance was driven by improved margins in all three segments of our business.

Capital sales.

And O&M services.

Capital sales is leading the way with newer projects now under construction in Italy and in North America.

Gross margins for the second quarter was significantly higher at 32, 5% up from 17, 6% in Q2 2024.

The overall increase in gross margin reflects better cost management and stronger project delivery across the business.

SG&A expenses for Q2, 2025 were $14 3 million a slight decrease of three 7% or approximately 600000 compared to $14 9 million in Q2 2024.

This reflects continued cost control with savings in audit and professional fees offset with some increases in net labor cost.

Okay.

Net loss for the quarter was $9 5 million, an improvement of 29% or $3 9 million compared to a net loss of $13 4 million in Q2 2020 for.

The improvement in net loss was mainly due to increased revenues and higher gross margin as well as decreases in SG&A.

Adjusted EBITDA for the quarter was a loss of $2 2 million, reflecting a large improvement of 72, 1% or $5 $8 million improvement compared to a loss of $8 million in Q2 2024 as I have noted the improvement was the result of higher revenues and gross margins coupled with a <unk>.

Might decrease in SG&A in Q2, 2025 compared to Q2 2024.

Now moving to slide nine.

As of June 32025, our total revenue backlog was $243 9 million, an increase of $140 9 million or 137% growth compared to a $103 1 million backlog at December 31, 2024.

Year to date June 32025, we have capital sale backlog of $191 million in O&M services backlog of $52 9 million.

As a reminder, our definition of backlog is only sign capital sales agreements and three years of modeled revenue from long term O&M contracts, even though many of our O&M contracts have longer terms are 10 plus years.

In addition, since June 32025, we have announced another $43 $8 million in new capital sales signing contracts.

The growth is mainly driven by new contract signings, particularly in Italy, and North America and reflects growing demand for energy is solutions across multiple markets.

In summary <unk>.

Q2 marked another large step forward in our transformation, we delivered strong year over year improvements in revenue gross profit and adjusted EBITDA, which is the result of disciplined execution and focused delivery across our business margins improved and backlog more than doubled since year end 2020 for providing it.

Clear line of sight of future revenue.

We're building a stronger more resilient business, one that is grounded in execution discipline.

Approach and cost management, and a growing pipeline of high quality projects.

With that I'll turn it over to you need for an update on our operations and the progress we are making on the project pipeline.

Thank you, Greg and good morning, everyone I'm addressing slide 10 now.

In the second quarter, we advanced key projects across our build own operate and capital sales segment, we are.

Also grew at closing backlog by 22% over Q1, reflecting continued commercial traction and momentum across our global platform.

Each on the projects and I will touch on today plays an important role in <unk> long term strategy.

They demonstrate how we're deploying our technology to generate an increasing backlog strengthening our operational track record and building market credibility.

Let's start with our asset owned portfolio.

So cabo methane the facility continues operating profitably serving the organic waste recycling needs of dozens of customers, including Blue chip companies, such as Amazon and Costco, while supplying RMG to southwest gas natural pipeline recently southwest gas submitted an advice letter to the California Public Utilities Commission seeking approval of a long term R&D.

Supply contract under Senate Bill 14, 40.

The asset demonstrates a repeatable model of retrofitting existing digest and infrastructure at municipal wastewater treatment plants with energy technology and operations Knowhow.

In new England, the Rhode Island Bioenergy facility continues ramping up converting food waste from across new England into R&D that is supplied to Irving oil on a long term supply contract. The asset continues to have its carbon intensity score under review by each of policy as part of credit generation in the Canadian clean fuel regulation or CFR program.

Turning to capital sales on slide 11.

In Singapore, the execution of the <unk> integrated waste management facility continues recognizing $1 2 million in revenue. This quarter. This is a landmark contract for the region valued at over $35 million Singaporean.

With a globally recognized clients Singapore's national environment Agency once completed the facility will process 400 tons per day of organic waste.

We announced important new developments this quarter that further strengthen both our global footprint and our global backlog in Italy, we expanded the scope of our existing contract with tech bound to supply anaerobic digestion equipment for Biomethane production.

Initially covering five sites in southern Italy. The agreement now includes seven facilities with total expected revenue of over $36 million.

These plants will be connected to Italy's gas pipeline grid and are scheduled to be completed by mid 2026.

In parallel we signed a binding letter of intent with cap one to supply nine advanced biomethane facilities across Portugal, Spain, and Italy <unk>.

These sizable process agro industrial waste on or expect to generate more than $60 million in revenue.

<unk> contract for a facility in central Italy, known as <unk> is valued at approximately $7 $3 million is now underway and these projects demonstrate repeatable biogas solutions with tier one clients.

And in California, our work with the East County Advanced water purification project expanded engineering and equipment supply of approximately $8 6 million in revenue to our previously announced contract. The project continues to move towards firming up supply of an integrated food waste and renewable power package.

Altogether these projects reflect meaningful progress across our five strategic pillars.

Substantially increased our backlog with top tier customers endorsing energy with multi project and expanding scope contracts as.

As we scale globally, our focus remains on profitable growth with disciplined execution.

Back to you is off.

Thank you Rajeev.

Now on slide 12.

This quarter results.

Make one being tier energy, our tupelo is delivery.

We are really the right project building lasting partnerships and covert backlog into profitable growth.

Our technology, our people and our disciplined approach are driving measurable improvements that we are just getting started.

For the market.

The marketing working are growing around the world customers are looking for proven solution to turned waste into fuel clear water and fertilizer.

Few companies can deliver that with our scale.

And where we operate with a track record we have built.

Demand is strong and the reason that our pipeline continues to grow we have the right strategy.

Have the right team.

Executing with focus and discipline to create long term value for our customers our partners and our shareholders.

Thank you for your time today and for your continued confidence in energy and I look forward to updating you on our progress next quarter Darlene.

Thank you.

And thank you everyone.

As always for additional information question do you have any questions. Please contact the IR team at IR at <unk> Dot com.

Our visit us online at <unk> Dot com.

Thank you all again for your time today.

Operator.

You may now end the call.

This concludes today's call. Thank you for attending you may now disconnect.